Oji Holdings to establish new local subsidiary in Myanmar, construct new corrugated containers factory in Yangon

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Oji Holdings to establish new local subsidiary in Myanmar, construct new corrugated containers factory in Yangon

February 05, 2015 - 17:15

TOKYO, Feb. 6, 2015 (Press Release) -Oji Holdings Corporation would like to announce that we have decided to establish a local subsidiary company in Republic of the Union of Myanmar and to construct a new factory to operate a total packaging business including manufacturing of corrugated containers, in Thilawa Industrial Park, which is located in the suburbs of Yangon city.

1. Packaging Business in Myanmar

As part of our business portfolio restructuring, Oji Group has been aggressively expanding the packaging business in South East Asia and India. Following its transition to a democratic government in 2011, Myanmar, with its rich natural resources, has been attracting worldwide attention as an investment destination, and undergoing rapid economic growth. In particular, market entries into industries such as textile and garment, food and beverages, etc. have been continuing in Yangon, which is the economic center of Myanmar. Among these, an acceleration of further market entries mainly led by Japanese enterprises, are forecasted in Thilawa Industrial Park, which is developed by the Japan-Myanmar Consortium.

On the other hand, the improvement of infrastructure such as electricity, water and roads, and the development of supporting industries have become future issues. Moreover, in the packaging industry, the suppliers that are equipped with modernized converting facilities are limited and especially local companies which can meet packaging demands of high-quality products and export products are largely insufficient. Oji Holdings has been proceeding with the preparations for the operation of a corrugated container factory (Oji GS Packaging (Yangon) Co., Ltd.), which is scheduled to start in May this year, in Mingaladon Industrial Park in Yangon City. On top of this, we are going to establish a total packaging company as an one-stop center of packaging materials with international level in Thilawa Industrial Park by utilizing our technological capabilities, business know-how and human talents that have been honed through our abundant experiences in more developed countries. Through this investment, Oji Holdings believes that we will highly contribute to the economic development and improvement of standards of living in Myanmar by meeting all the needs of customers who are seeking higher packaging quality.

Currently, Oji Group's Packaging business in Southeast Asia, consists of 20 manufacturing sites. With the addition of 2 factories that are under construction in Vietnam and Mingaladon Industrial Park, there will be a total of 23 manufacturing sites after the completion of the factory in Thilawa Industrial Park.

2. Overview of the Local Company and the New Factory

Our 2 wholly-owned Malaysia subsidiaries, Oji Asia Packaging Sdn. Bhd. and Oji Asia Management Sdn. Bhd., will be investing 90% and 10% of the capital respectively for the establishment of a local subsidiary company in Myanmar. This local company will construct a factory in Thilawa Industrial Park of Thilawa Special Economic Zone and commence the total packaging business.

Overview of the Local Company

Company Name

Oji Myanmar Packaging Co., Ltd.

Business Line

  • Manufacturing and sales of corrugated containers
  • Import, converting/processing and sales of pulp, paper, film and other packaging materials

Establishment (planned)

February 2015

Capital (planned)

US$8.0 million (approximately ¥900 million)

Oji Group's Ownership

100% of the shares

Overview of the New Factory

Location

Thilawa Industrial Park in Republic of Union of Myanmar (approximately 20km south of the city center of Yangon)

Site Area

40,081 m2

Total Investment

Approximately US$8.0million (approximately ¥900 million)

Start of Operation

April 2016 (planned)

3. Impact on financial results

There will be no material impact on our financial results' forecast ending March 2015 due to this project.