Tan Chong gets 50-yr permit to make motor vehicles in Myanmar

Tan Chong gets 50-yr permit to make motor vehicles in Myanmar
Business & Markets 2013
Written by Cynthia Blemin of theedgemalaysia.com
Friday, 20 September 2013 19:49

KUALA LUMPUR (Sept 20): TAN CHONG MOTOR HOLDINGS BHD [] (TCMH), through its Labuan-based subsidiary ETCM (MM) Pte Ltd, has received the green light to manufacture and market motor vehicles in Myanmar for the next 50 years.

TCM Myanmar, the fourth company established by TCMH Group in Myanmar, after E-Garage Auto Services and Spare Parts (Myanmar) Company Ltd, TC Express Auto Services & Spare Parts (Myanmar) Company Ltd and ETCM (Myanmar) Company Ltd, is part of TCMH’s expansion initiatives to set a firm foothold in Myanmar.

In a filing on Bursa today, Tan Chong said the Myanmar Investment Commission (MIC) issued a permit to the company recently in respect of the approval for an investment proposal by ETCM in the manufacturing and marketing of motor vehicles at the industrial area of Bago Region in Myanmar.

TCM Myanmar will have an authorised capital of USD100 million (RM316.5 million).

“The MIC permit is for a period of 50 years, commencing from the date of the signing of a land lease agreement between TCM Myanmar and the Bago Region government, and extendable for further periods of two terms of 10 years each.

“The permit allows for certain tax exemptions and reliefs applicable upon implementation of the project as provided for under the Myanmar Foreign Investment Law,” said the company.

These include income tax exemptions, exemption and reliefs from customs taxes and internal taxes for machineries and equipment for the CONSTRUCTION [] of the assembly plant and production as well as commercial tax exemption for goods produced for exports, it added.

TCMH said the assembly plant in Bago, sited on a 50 acre leased land, is planned for the assembly of Nissan vehicles for distribution by the TCMH group.

Construction of the plant will commence within one year from the date of the permit and expected to be completed in three years, it added.

It is projected to have an initial production capacity of 9,100 units per annum based on one shift for the first five years, it said.

Total capital outlay for activities to be carried out by TCM Myanmar, including the construction of the assembly plant and showroom, purchase of machineries and equipment for the initial first three years is estimated to cost USD50 million (RM158.2 million), which will be funded internally and from external borrowings, it added.

TCMH however said the project has no material effect on the earnings, gearing and net assets of the TCMH group for the financial year ending December 31, 2013.