YANGON -- Koyo Radiator will set up a factory in what is to be Myanmar's first modern industrial park, committing to occupancy before any other company.
The Japanese autoparts maker has reached a basic agreement to lease some 3 hectares from Myanmar Japan Thilawa Development, the developer of the industrial park. The two sides are expected to sign a memorandum of understanding as early as this week.
Koyo will invest 500 million yen ($4.82 million) to build a plant, breaking ground this autumn or later to bring the planned facility into service next summer. The factory is expected to churn out 120,000 automotive radiators a year, which will then be exported to other parts of Asia and elsewhere.
Besides Japan, Koyo has factories in China and Indonesia. But wages continue to rise in these countries, so the Nagoya-based manufacturer has decided to go to Myanmar, where labor costs are still low and talented personnel can be hired quickly. The new factory will open with a workforce of around 100, and the company will consider expanding it to several hundred going forward.
The 400-hectare industrial park southeast of Yangon is slated to go onstream in stages starting in the spring of 2015, providing sufficient infrastructure including electricity and industrial water. Myanmar Japan Thilawa Development is the effort of major Myanmar businesses and a consortium of three Japanese trading houses -- Sumitomo, Marubeni and Mitsubishi -- along with the Japan International Cooperation Agency.