News

The Board of Directors of Tan Chong Motor Holdings Berhad (“TCMH” or “the Company”) is pleased to inform that the Myanmar Investment Commission (“MIC”) has issued a Permit dated 23 August 2013 to ETCM (MM) Pte Ltd (“ETCM (MM)”), a Labuan incorporated subsidiary of the TCMH Group in respect of the approval for an investment proposal by ETCM (MM) in the manufacturing and marketing of motor vehicles at the industrial area of Bago Region, Myanmar (“Project”).

To undertake the Project, ETCM (MM) has submitted an application to the Ministry of National Planning and Economic Development of Myanmar to establish a new subsidiary with the name of TAN CHONG MOTOR (MYANMAR) COMPANY LIMITED (“TCM Myanmar”) in the Republic of the Union of Myanmar under its Companies Act, 1913 and is in receipt of a temporary certificate of incorporation dated 21 June 2013. The issuance of the permanent Certificate of Incorporation is pending.

TCM Myanmar will have an authorized capital of USD100,000,000/- divided into 100,000,000 ordinary shares of USD1/- each. The minimum required capital, which is internally funded, is USD150,000/-, of which USD75,000/- has been paid-up.  The shareholders of TCM Myanmar are:

(Under the Myanmar Companies Act, 1913, a company is required to have at least two shareholders)

The MIC Permit is for a period of 50 years, commencing from the date of the signing of a Land Lease Agreement between TCM Myanmar and the Bago Region Government, and extendable for  further periods of two terms of 10 years each.  The Permit allows for certain tax exemptions and reliefs applicable upon implementation of the Project as provided for under the Myanmar Foreign Investment Law.  These include income tax exemptions, exemption and reliefs from customs taxes and internal taxes for machineries and equipment for the construction of the assembly plant and production as well as commercial tax exemption for goods produced for exports.

The assembly plant in Bago, sited on a 50 acre leased land, is planned for the assembly of Nissan vehicles for distribution by the TCMH Group. Construction of the plant will commence within one year from the date of the MIC Permit and completion is expected in three years. It is projected to have an initial production capacity of 9,100 units per annum based on one shift for the first five years.   

Total capital outlay of the TCMH Group for the  activities to be carried out by TCM Myanmar, including construction of assembly plant and showroom, purchase of machineries and equipment for the initial first three years is estimated at USD50 million and will be funded internally and from external borrowings.   

TCM Myanmar, the fourth company established by TCMH Group in Myanmar, after E-Garage Auto Services and Spare Parts (Myanmar) Company Ltd, TC Express Auto Services & Spare Parts (Myanmar) Company Ltd and ETCM (Myanmar) Company Ltd, is part of TCMH’s expansion initiatives to set a firm foothold in one of ASEAN’s last emerging markets in anticipation of the growth potential in Myanmar.

The Project has no material effect on the earnings, gearing and net assets of the TCMH Group for the financial year ending 31 December 2013.

This announcement is dated September 20, 2013