BANGKOK — Thailand's DPAC International Corp. plans to set up a plastics bag manufacturing facility in Yangon, Myanmar. Some 50 percent of the plant’s out put will be exported — mostly to Japan.
“The Myanmar market potential is also huge,” Methee Athichiskul, DPAC's deputy managing director, told Plastics News.
DPAC's strategy to set up production facility in Yangon is to take advantage of the hardworking labor, albeit its competitive wages compared to those in Thailand, he conceded.
DPAC's sales in Myanmar has grown to 50 million baht (US$1.7 million) per month from the nominal 600 baht per month ($20.5) when the company began marketing its bags there three years ago.
The Yangon factory, set to be a joint venture with Yangon-based business group, is expected to cost $5 million for initial phase development with output of 350 metric tons per month. It will be operational within a few years.
Raw material for the plant would be imported from the Middle East and Thailand.
“We expect first year sales of 300 tonnes per month in Myanmar,” he added. Second year sales are expected to reach 450 tonnes per month.
DPAC is currently a major exporter of plastics bags to Myanmar.
Within five years, output from the Yangon plant will reach 1,000 tonnes per month, he said.
“We will also upgrade our Thai production facilities, relocate some of the existing machines to the Yangon plant,” he said.
“Our longer-term plans include a plastics bag manufacturing facility in Laos and a marketing office in Cambodia,” Methee said.
Though Laos facility was still in the early stages of planning, Methee said it would export 90 percent of the production to the market in northeastern Thailand.
DPAC, a subsidiary of King Pac Group, is seeking listing on the Stock Exchange of Thailand.
Both DPAC and King Pac were expecting a combined sales of 1.45 billion baht ($49.5 million) this year, up on 1.06 billion baht ($36.16 million) estimated in 2012.