The first factory, which is estimated to involve investments of $15 million -$20 million, will manufacture doors and windows for the local market. Construction will commence next year. At $80 million-$100 million, the second factory will produce construction materials to replace imported materials from Europe and Asia.

Eurowindow CEO, Mr. Nguyen Canh Hong, has met with the Minister of Industry for recommendations on suitable locations for the factories but no decision has been made so far.

Eurowindow is expected to employ up between 500 and 1,000 workers initially at its first factory. When both factories are up and running though, the company estimates there could be jobs for a maximum of 4,000.

The company signed its first contract in Myanmar on its opening date with HTE Integrated (Myanmar) to supply wooden, aluminium doors and glass walls for the Super Hotel project in Thilawa Special Economic Zone.

Eurowindow is also targeting local home owners and real estate developers as potential customers. It plans to manufacture and distribute its products in Myanmar at prices which are 20 percent cheaper compared to Vietnam to draw more business, Mr Hong said.

The company, which drew revenues amounting to $142 million in 2017, currently runs five factories in Hanoi, Da Nang and Binh Duong, Vietnam.

Two-way trade

Eurowindow has chosen to expand in Myanmar at a time when the construction sector is expected to grow at a rate of 30 percent per year, according to data provided by the company. “We also see similarities here compared to Vietnam 10 years ago in that demand for good quality construction products will rise in the Myanmar market. As such, we see the opportunity to expand our services here like we did in Vietnam,” Mr Hong said.

He added that Eurowindow isn’t too worried about the challenges many businesses face when expanding in Myanmar, such as gaining access to financing and proper legal advice. “This is because BIDV (Bank for Investment and Development of Vietnam), one of the biggest banks in Vietnam, has already invested here and they know all of the regulations. So, they can help us.”

Mr Hong said Myanmar’s efforts to attract investments from Vietnam also played a part in Eurowindow’s decision to come to Yangon.

Myanmar and Vietnam have pledged “to strengthen economic ties and give priority to special sectors such as transport, infrastructure, tourism, agriculture, forestry, telecommunications and banking” with the aim of reaching two-way trade valued at $1 billion, said Ms Vo Thi Ngoc Diep, Vietnam Trade Counselor in Myanmar.

In fact, two-way trade between both countries reached $825 million last year, which is up by more than 50pc compared to 2016.

Vietnam was also among the seven largest investors in Myanmar over the same period, with total registered investments amounting to $2.1 billion in 2017. It is currently the second biggest ASEAN investor in Myanmar.

Last year, Vietnamese developer Hoang Anh Gia Lai (HAGL) signed an agreement with City Mart Holdings to set up an Ocean Centre hypermarket in the second phase of its Myanmar Centre project.

HAGL started building the second phase of Myanmar Centre in 2016. When complete this year, it will include two office towers and five residential towers including serviced apartments and units for sale.

The first phase of the $440 million project included the Myanmar Plaza shopping centre and a hotel operated by Spanish chain Melia.

Source: https://www.mmtimes.com/news/vietnams-eurowindow-expands-myanmar-more-investments-expected.html