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Japanese agricultural equipment firm Kubota is set to construct a machinery assembly plant in the Thilawa, according to Japanese financial journal Nikkei Asian Review.
The move continues the company’s expansion in the Special Economic Zone (SEZ) at Thilawa port, located some 25 kilometres southeast of Rangoon.
The heavy machinery manufacturer, which was recently awarded the first license in Burma to sell imported wholesale goods, stands to capitalise on the increasing demand for updated farming equipment as Burmese farmers move to modernise their industry, Nikkei said on Wednesday.
The Osaka-based company has reportedly secured a 10,000-square-foot lot for the new project, which will be used primarily for the assembly of large agricultural equipment such as tractors, engines, tires, and components imported from overseas.
While the upcoming plant will be Kubota’s first major production centre in Burma, its water treatment facility is scheduled to begin operation in October, also in Thilawa. Once the plant commences treatment, Kubota will coordinate all future water treatments sites in the SEZ, giving them an effective monopoly within the area, Nikkei reported in May. Water is notoriously hard to treat in Thilawa due to the high concentration of metallic substances in the industrial area, it added.
“Some 60 percent of Myanmar’s [Burma’s] population engages in agriculture,” the 16 September report said. “The industry has been slow to modernise after stagnating under the former military junta, creating significant latent demand for farm equipment. Although the government technically bans foreign companies from selling imports, some businesses are excepted if they have invested enough capital in the SEZs.”
Thilawa SEZ is home to several operations involving Japanese companies, including multinational giants Mitsubishi and Milcon Steel Plc, but has attracted criticism for displacing locals during its large-scale development.
Read more about the Thilawa SEZ here.