Opportunity does not knock, it presents itself when you beat down the door, goes a popular quote.
Kanbawza Project, a cement production plant owned by KBZ Industries Ltd, is located 32 kilometres southeast of Taunggyi, the capital of Shan state.
True enough, that was exactly what LV Technology Plc (LVT) did to secure work with two of Myanmar's leading conglomerates with the aim of increasing its share in the country's booming cement industry.
This year, LVT announced it would provide engineering consultancy and equipment for cement plants owned by Max Manufacturing Co Ltd, controlled by the tycoon Zaw Zaw, and KBZ Industries Ltd, a unit of the KBZ group of companies.
The company began operating in Myanmar in 2004. Securing projects with local partners was not easy, said Wisoot Anupunthumetha, an adviser to the president of LVT. Although LVT is a well-established engineering concern, competition from Chinese firms was fierce.
The undertakings with Max Manufacturing and KBZ Industries are set to bring in revenue of US$22 million and $18 million for the company.
Revenue will be realised in accordance with the progress of construction work, said Mr Wisoot, adding that KBZ's plant will be completed in the first half of 2013, while Max Cement will begin operating by the end of next year.
With a total investment of $60 million, KBZ's Kanbawza cement plant is near Taunggyi, the capital city of Shan state. Situated on 1,900 rai, the factory will have a daily production capacity of 1,250 tonnes.
One of the advantages of the facility is that primary raw materials can be sourced within the compound, Mr Wisoot said. The plant has access to 80 million tonnes of limestone reserves within a one-kilometre radius, an amount that should last up to a century.
Limestone is the main raw material in cement production. A KBZ representative who asked not to be named said most of the output will be sold in Shan state at a cost of $80 a tonne, similar to the cost of imports.
This will generate a high profit margin since production of one tonne of cement in Myanmar costs just $40.
Construction of the 7,000-megawatt Tasan hydropower dam in Shan state is expected to use tremendous amounts of cement, said the source, adding that the company has considered building another plant in the same area.
The factory is located in a valley full of lush green vegetation. Villagers in the area grow rice, garlic, soybeans and bananas for a living.
Regarding environmental impact, Mr Wisoot said the plant will be able to operate with zero waste.
Systems that capture cement dust will be installed, preventing dust particles from escaping to contaminate the air, and whatever is trapped will be fed back into the production process.
Villagers living around the site will not be affected when the plant begins the operation, said Mr Wisoot.
In Thailand, limestone quarry mining in the past brought about environmental problems such as the disappearance of hills and wildlife along with noise pollution.
Mr Wisoot said a new technology enables vertical extraction, meaning limestone is extracted from the middle sections of the quarry, leaving the outer parts intact. The upshot is the shape of the quarry or limestone hill is left unchanged from the outside, preserving trees and vegetation.
Energy from heating the raw materials in the production process will also be harnessed to make electricity for the plant, something that was impossible with older technology.
The biggest state in Myanmar, Shan occupies nearly a fourth of the country and has a population of 5.5 million. It borders China, Thailand and Laos.
With Max Manufacturing, LVT will be involved in converting the less-efficient wet production process to dry production. This will triple daily capacity at the plant to 1,500 tonnes.
The factory is located on 460 hectares of land in Aungsilar, 48 kilometres from Nay Pyi Taw. It has limestone reserves of 25-30 million tonnes.
Apart from supply engineering advice and equipment, LVT earlier announced plans to issue new shares to raise funds for investing in a cement business through a unit of Max Myanmar.
Shares of LVT closed on the Market for Alternative Investment at 1.28 baht on Friday, down two satang, in trade worth 12.05 million baht. Over the past 52 weeks, they traded in a range from 1.19 to 2.26 baht.
About the author
- Writer: Soonya Vanichkorn