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Kubota to build farm machinery assembly plant in Myanmar

YANGON -- Kubota will construct an agricultural machinery assembly plant near Yangon, capitalizing on surging demand as Myanmar modernizes a core industry.

     The plant will be the Japanese company's first major production center in Myanmar. It will be located in an industrial park set up in the Thilawa special economic zone by a Myanmar-Japan partnership with public- and private-sector involvement. Kubota has already secured a roughly 10,000-sq.-foot lot for the facility. It will be used to assemble such mainstay products as tractors, using engines, tires and other components imported from overseas, though the planned production capacity has not been disclosed.

     Kubota will break ground on the plant as early as autumn, aiming to bring it online next spring or later. It will likely cost about 1 billion yen ($8.21 million).

     While Myanmar bans sales of imports by foreign companies in principle, the government decided in May to permit some wholesaling by businesses that have invested a given amount of money in special economic zones. Kubota recently became the first foreign company to acquire a wholesale license for imported goods under that exception. It likely plans to offer imported farm machinery as well, using the new plant as a foothold.

     Some 60% of Myanmar's population engages in agriculture. The industry has been slow to modernize after stagnating under the former military junta, creating significant latent demand for farm equipment.

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