Thai firm ChianGM Expoai Frozen Foods will build a 60,000-square-metre plant in Nay Pyi Taw, the company announced yesterday.
The Thai firm saw an opportunity in Myanmar’s “less competitive” vegetable processing industry, where the government has only recently started promoting foreign investment, ChianGM Expoai Frozen Foods said.
Nay Pyi Taw will be a priority area for infrastructure development, and is close to areas of agricultural production, the firm added.
The outgoing government has been criticised for funnelling its agriculture budget into farmland around the capital city, while the rest of the countryremains underdeveloped.
An overhaul of the agricultural sector is one of the five “pillars” of the incoming National League for Democracy’s economic strategy. Linkages between farmers, traders and exporters are not well established, the NLD has said.
ChianGM Expoai Frozen Foods will own between 60 and 90 percent of a Myanmar subsidiary – yet to be named and incorporated – which it will use to export frozen vegetables.
The firm is leasing 47.7 acres of land for its plant from local company Sein Taung Yar. The lease will last for 50 years with options for two 10-year extensions. Sein Taung Yar must “coordinate with the authorities to arrange usage of land” within nine months of April 1.
The Thai firm has budgeted 80 million baht (K2.7 billion or US$2.2 million) for the initial land acquisition, and expects total investment to run to 700 million baht. Of this, 50 million would be spent on the land lease and the other 650 million on building the plant and buying equipment.ChianGM Expoai Frozen Foods is preparing to pay a deposit equal to 50pc of the total lease fee. The Thai firm said it has the right to cancel the project if there are changes in Myanmar laws that cause “significant change” in return, but would have to forfeit a deposit equivalent to 30pc of the total lease value.