Agribusiness companies from the Philippines, Myanmar and Thailand have formed a consortium to develop a Southeast Asian rice supply chain using the proprietary hybrid and premium rice technology.
Henry Lim Bon Liong, chairman and chief executive of Filipino agricultural technology firm SL Agritech, said that the group had signed a memorandum of understanding with the IBTC group of Myanmar and Thailand’s Capital Rice to set up the three-country private-sector partnership, as reported by The Inquirer.
SL Agritech will contribute its rice technology and varieties to the venture while the Myanmar partner will provide the land for production. The Thai partner will handle global marketing.
"The Myanmar company had been watching what we had been doing in the Philippines, and saw the potential of following the same model in Myanmar," Donna Lim, SL Agritech's AVP of operations told FoodNavigator-Asia. "They invited us over to meet their minister to discuss how to achieve self-sufficiency in rice production."
Feasibility studies underway
The recently signed MOU provided for the conduct of feasibility studies to identify the land for production and finalise partnership details by end-December this year.
The production base of the consortium will be in Myanmar, where costs are low and the government is expected to provide tax incentives. A company to be owned by the consortium will also be incorporated in the country.
Partner IBTC group is Myanmar’s leading manufacturer, marketer and distributor of alcoholic beverages. Its agribusiness arm is ISMSA International Sun Moon Star Agricultural.
Tapping export strength
Capital Rice, which is part of the STC group, is one of Thailand’s top rice exporters. It is estimated the Thai partner’s exported 2.2 million tonnes in 2011 while the annual average was about 1.8 million tonnes.
Lim said she anticipated that the joint-venture would have a wide-ranging influence on the region's distribution chain. "There is very high potential for international trade in rice and seeds from our countries. A lot of other countries are also seeing the potential of the rice sector, not least because it seems to have been forgotten and dumped for some time."
Asked if she expected the joint-venture to grow in scope and welcome other members, she suggested that this would be likely in the long-run.
SL Agritech’s initial investment in the venture will be between $10 million to $20 million. The company will initially contribute its high-yielding SL-8H hybrid rice variety to the venture but this might also be a springboard for the premium Doña Maria rice variety.