Danish beer brewer Carlsberg has announced the formation of a joint venture with the Myanmar Golden Star (MGS) group to establish a beer production facility in the Bago Industrial Zone, located about an hour’s drive from Yangon, Myanmar-based consultancy Thurs Swiss has reported.
Carlsberg will hold a majority 51 per cent stake in the venture and will provide seed capital in the range of $35 million to $50 million, with construction slated to commence in February.
The foreign investment project comes just when the Ministry of National Planning and Development has cemented the final set of rules and regulations for the developmentally critical Foreign Investment Law, originally the recipient of heavy criticism due to its use of vague terminology that left investors open to the arbitrary whims of local officials.
The new rules, published on January 31, 2013, stipulate that foreign investors seeking opportunities in Myanmar are not to be restricted by minimum start-up capital requirements in any sector, except for mining, nor are they to be forbidden to have majority ownership in joint ventures with local partners.
Additionally, even in sectors with restrictive barriers, such as agriculture and manufacturing, majority foreign ownership will be allowed up to 80 per cent.
However, certain manufacturing and service segments have been reserved for nationals.
Carlsberg is the world’s fourth largest beer producer and plans to use its new plant in Bago to distribute domestically and abroad, with an earmark of exporting at least 1 million cans per month. Carlsberg has an focus on expanding in emerging Asian markets. Among others, the Danish beer giant owns a 50 per cent stake in Lao Brewery Company, is a major shareholder in Lhasa Brewery in the Tibet Autonomous Region and owns several breweries in the Chinese provinces of Yunnan, Chongqing and Guangdong.
The MGS group is a Yangon-based food and beverage distributor that owns agricultural land for the production of rice, beans, oil crops and other foodstuffs.