Daibochi expects Myanmar unit to contribute to Group’s performance

KUALA LUMPUR: Daibochi Plastic and Packaging Industry Bhd, which recently commenced operations of its consumer packaging plant in Yangon, Myanmar, expects it to contribute positively to the group’s financial performance from the third quarter of 2017 and onwards.

In a statement yesterday, Daibochi Plastic said, the plant, operated by its 60 per centowned unit, Daibochi Packaging (Myanmar) Co Ltd (DPM), was the group’s first expansion outside of Malaysia.

Managing Director, Thomas Lim, said with DPM contributing to the group, the company was confident of recording high growth in financial performance from hereon, leveraging on low-cost base in Myanmar and potential new revenues soon.

“In order for DPM to expand further, the group has actively pursued new contracts from Myanmar’s burgeoning food & beverage (F&B) and fast-moving consumer goods (FMCG) sectors.

“With its technical capabilities and product quality, backed by Daibochi’s track record in serving leading multinational brands, the group has set a target of 20 per cent contribution from DPM by end-2018,“he said.

He said Daibochi was expected to commence packaging supply to two multinational customers for their F&B and FMCG brands in Indonesia in the fourth quarter of 2017, which would add on positively to the company’s prospects.

Daibochi had earlier invested US$6.8 million (US$1 = RM4.28) in DPM for a 60 per cent controlling stake, while Myanmar Smart Pack Industrial Co Ltd (MSP) holds the remaining 40 per cent stake and had transferred its existing business, production assets and workforce to DPM.

DPM currently supplies consumer flexible packaging to Myanmar’s FMCG industry, and had committed capital expenditure of US $5.5 million via internallygenerated funds over three years to enhance its production capacity, quality and efficiency.

“With our first mover advantage in Myanmar, we would strive to support the growth aspirations of domestic companies as well as international brands that are entering the country.

“Ultimately, we intend to elevate DPM’s status into a leading consumer packaging player in South-East Asian,” Lim said.

Meanwhile, Daibochi’s revenue for the second quarter ended June 30, 2017, fell 10.5 per cent year-onyear to RM86.8 million on slower exports to a key customer in the short term, which has since resumed. — Bernama