Hong Kong-based Highway Holdings Limited announced that it has purchased an additional 50 percent ownership interest in a Myanmar entity that operates a manufacturing and assembly factory.
Previously, the company utilised the 15,000-square-feet factory for more than two years under a subcontracting arrangement.
Highway Holdings held a 25 percent ownership interest in this Myanmar entity prior to the new move. Terms of the deal were not disclosed by the firm.
Recent commerce law changes in Myanmar now allow non-Myanmar companies such as Highway Holdings to acquire interest in businesses that are domiciled and operating in Myanmar. These businesses are designated as “foreign companies” and provide foreign investors with a tax holiday if certain import/export conditions and government regulations are satisfied.
“The acquisition enables us to realise meaningful cost-savings and a competitive advantage, while maintaining the highest quality standards for our customers. The utilisation of the facility in Myanmar complements our component manufacturing operation in China, while partially offsetting escalating costs there,” said Roland Kohl, chairman, president and chief executive officer of Highway Holdings.
In November 2013, Highway Holdings received approval from one of its European customers for assembly manufacturing of one series of electric synchronous motors at the facility in Myanmar.
The firm said production for this product has since ramped up and approximately 500,000 units have already been shipped directly to the customer’s factory in Germany from Myanmar.
Production of air turbines for another customer has been ramping up simultaneously, with several millions pieces to date assembled at the facility, it added.
“Our production standards have been successfully applied and transferred one-by-one to Myanmar, supported by ongoing training and monitoring by our staff in China.
“We anticipate further growth opportunities … with expectations for additional business from these customers and also other multi-national organisations moving forward,” Kohl said.