Mar 12, 2016

Mitsui-Behn Meyer venture to set up fertiliser plant in Myanmar ($10.5 million)

Mitsui & Co Ltd has entered into an agreement with the Behn Meyer, a major distributor of chemicals in Southeast Asia, for forming a joint venture company, BMM Venture (S) Pte Ltd (BMM-V), in Singapore. Mitsui, which has business relationship with Behn Meyer spans many years, will acquire a 49 percent equity stake in BMM-V through Mitsui & Co (Asia Pacific) Pte Ltd.

Meanwhile BMM-V has entered into an agreement with Myanmar Agribusiness Public Corporation (MAPCO) to establish Agri First Co Ltd (AFC) for manufacturing and distribution of imported fertilisers in Myanmar. Founded in 2012, MAPCO is a private sector company and it is seen as a key contributor to the development of agriculture in Myanmar.

With a land area about 1.8 times bigger than Japan's, Myanmar has around 2.8 times more farmland. Its climate and water resources are suitable for double-cropping. These factors are expected to drive rapid growth in the agricultural sector. Fertiliser demand in Myanmar is currently just over one million tonnes. This is equivalent to only one-fifth of the level in countries with similar farmland areas and crop types, such as Vietnam and Thailand, and demand is therefore expected to grow rapidly.

Agri First Co plans to invest approximately Yen 1.2 billion (about $ 10.50 million) in the construction of a fertiliser manufacturing plant (including a warehouse and other ancillary facilities) with an annual capacity of 100,000 tonnes in the Thilawa Special Economic Zone. It aims to commence production at the new plant in May 2017.

By combining Behn Meyer’s expertise and experience relating to the manufacture and distribution of specialty fertiliser, MAPCO’s networks with agricultural business operators in Myanmar, and Mitsui’s financing, logistics, procurement and marketing capabilities, AFC will contribute to agricultural development in Myanmar.

This initiative will strengthen Mitsui's presence in the food and agriculture key strategic domain by expanding the business base in the area of agricultural materials.

“Mitsui regards this joint establishment of the investment company with Behn Meyer as an opportunity to strengthen its business operations in the area of fertilizers and agricultural materials in Myanmar and other Southeast Asian countries, in addition to its business initiatives in Japan, Europe, and North and South America. The specific goals are to accelerate the spread of scientific methods developed by Mitsui and Behn Meyer independently, including guidance on fertiliser optimization based on soil and crop analyses, and to contribute to the development and growth of agriculture in Southeast Asia and the stable supply of food on a global scale,” said Mitsui in a press release.

Source: Business Standard