Oji Paper to Build JV Corrugated Box Plant in Vietnam
Oji Paper Co Ltd of Japan has entered into a joint-venture agreement with Texchem Resources Bhd (Kuala Lampur) to set up a corrugated carton box manufacturing factory in Vietnam to be situated at the Bien Hoa Industrial Zone in Dong Nai Province.
Texchem will take up a 30% equity interest, while Oji Paper holds the remaining stake in the joint-venture company, to be known as Ojitex Holdings Bhd, which would have a wholly-owned subsidiary called Ojitex Vietnam Ltd.
Ojitex Vietnam will have a paid-up capital of $10 million, which will be paid progressively as the project is undertaken. Under the joint-venture agreement, Oji Paper will provide technical and technological support, while Texchem provides management backup. The business venture is for a period of 10 years and is renewable yearly after that.
Texchem said the factory will produce high-quality packaging materials aimed entirely at the Vietnamese market, but will meet the requirements of both domestic and export product manufacturers. It also said that packaging materials initially produced would include corrugated carton boxes and sheets, expanded polystyrene molded foam products, vacuum formed products, and inner boxes.
In Vietnam, these packaging materials are used in various industries including food and foodstuff processing, garment making, and the production of consumer goods such as electronics and household appliances.
Explaining the rationale for the project, Texchem said it was synergistic and will further strengthen the group's objective of firmly establishing a total packaging business. It added that Vietnam has a large domestic market in need of quality packaging, thus offering great potential business opportunities for the joint-venture project.
Texchem said it had a representative office in Vietnam through its subsidiary Texchem Singapore Ltd. By setting up the manufacturing facility in the total packaging business, its presence in the Vietnamese market is expected to be further strengthened. The company explained that approval from the central bank, Bank Negara Malaysia, was obtained in early December for the Ojitex Holdings investment in Vietnam and that the investment license for Ojitex Vietnam was obtained in late December from Vietnamese authorities.