DaChan to enter Burmese market with joint venture

DaChan Great Wall Group (大成集團), a Taiwanese agriculture and food conglomerate, yesterday said it will tap into the Burmese market through a US$30 million joint venture in a bid to further cement its position in Southeast Asia.

The group is to build feed mills and poultry plants in Myanmar by teaming up with the Myint Investment Group, DaChan Great Wall chairman Charles Han (韓家宇) told an anniversary celebration event in Taipei yesterday.

The Taiwanese firm would hold a 51 percent stake in the joint venture, while the Burmese company would hold the remaining 49 percent, DaChan Great Wall said.

The first poultry plant in Myanmar is expected to begin operations by the end of next year at the earliest, the group told the Taipei Times.

Han said that the group hopes to develop an integrated supply chain of poultry products by duplicating its success in other Southeast Asian nations.

The conglomerate — which started to expand its footprint in Southeast Asia in the 1990s — operates its Vietnamese business through its Hong Kong-listed subsidiary, DaChan Food Asia Ltd (大成食品亞洲), company data showed.

DaChan Great Wall said it is also seeking more business opportunities in overseas markets through deeper collaborations with Japan-based Showa Sangyo Co Ltd, one of its most important business partners in Asia.

Headquartered in Tokyo, the Japanese company offers a wide range of food processing products, including wheat flour, vegetable oils and commercial-use premixes.

DaChan Great Wall and Showa Sangyo have been operating together in the Chinese market for more than 15 years, with several plants producing premix powders in Shanghai and Tianjin.

Asked about the company’s plans with the Japanese firm, Han said that the two companies are still discussing the details of upcoming projects.

“We will let investors know when the contents [of the projects] are more clear,” he said, without elaborating.

The 60-year-old group’s net profit in the first half of the year shrank 13.8 percent year-on-year to NT$884 million (US$29.07 million) from NT$1.03 billion, with earnings per share decreasing from NT$1.5 to NT$1.29, primarily due to additional taxes on undistributed earnings.

Revenue in the first six months of this year rose 1.6 percent to NT$36.74 billion from NT$36.17 billion, with gross margin staying flat at 13.2 percent, according to a company filing with the Taiwan Stock Exchange.

The group has set a whole-year sales target of NT$80 billion, compared with last year’s NT$79.8 billion, it said.

Source:Taipei Times