Cal-Comp Electronics & Communications Thailand, founded in 1989 as a subsidiary of Taiwan’s New Kinpo Group, produces mainly computer and information peripheral products such as external hard drives, television set-top boxes, printers, and multifunctional business machines. Listed on the Thai stock market, it is also the largest exporter of manufactured electronics in that country. It has two major factory complexes, eight factory buildings, and 8000 employees, with annual export production value reaching US$2 billion.

With plants already in mainland China, Brazil, the United States, and Mexico, Cal-Comp Thailand has recently set its sights on Myanmar.

Cal-Comp Thailand managing director Tony Chou explains that they do OEM manufacturing, and the main consideration in setting up production facilities has always been to get geographically closer to clients and markets, which means that the low cost of labor in Myanmar is by no means the only consideration.

It was only very recently that Cal-Comp Thailand, encouraged repeatedly by clients, set up a factory in Brazil, a place which is distant and unfamiliar to most Taiwanese. They estimate that both they and their clients will reap 40% tax savings on that investment. Now that many major global corporations with which Cal-Comp Thailand has had had long-term cooperative relations—including Toshiba, Hewlett-Packard, Western Digital, and Nikon—are also interested in moving into Myanmar, naturally Cal-Comp Thailand, as their main OEM manufacturer, has had to make preliminary investigations into the investment climate there.

Chou visited Myanmar in May of this year. After discovering that both water and power supplies are unreliable, that road and port facilities are inadequate, and that infrastructure is backward, he realized that now is not the time for an electronics factory in this country. But since there is a high possibility that ultimately Cal-Comp Thailand will move into Myanmar to accommodate their clients, they must begin even now to consider strategies to cope with these various problems.

After several evaluations, Chou has reached the conclusion that the best places to set up a factory at the present moment would be cities in Thailand that are right on the border with Myanmar, cities like Sai York and Ban Kao. The governments of Thailand and Myanmar are thinking about setting up “border-trade special zones” similar to those along the US–Mexico border, where Thai firms that set up factories can enjoy exemption from customs duties for cross-border trade and also will be able to employ cheap labor from across the boundary. When roads connecting these areas to the outside world are completed in the future, it will be possible to transport products rapidly to the special economic zone at the deepwater port of Dawei, a city in southern Myanmar close to Thailand. (The port is currently being constructed by the Thai government.)

However, as Chou emphasizes, they are still in the evaluation stage, and Cal-Comp Thailand will only make a final decision after observing how the situation develops in Myanmar and after taking into account market conditions.

aiwan Hon Chuan Enterprise, led by Keith H.C. Dai, is known as “the shadow giant” of the beverage industry.

What kinds of products are most popular among citizens in countries with undeveloped economies? Instant noodles, which have a low unit price and come in a variety of flavors, would certainly make the list. The Master Kong company, which built a huge instant noodle empire in mainland China in the 1990s, is living proof.

Today, some Taiwanese businesspeople are planning to transplant this “instant noodle experience” to Myanmar. They are Kevin Wu, who has been laying groundwork in Myanmar for many years, and Namchow Thailand (owned by Taiwan’s Namchow Group), the largest rice cracker and instant noodle manufacturer in Southeast Asia.

Wu first came to Myanmar 18 years ago, working for Chin Su Myanmar, which has made deeper operational inroads into Myanmar than any other corporation owned by Taiwanese capital (the group’s operations include a plywood factory, a real estate company, and a chicken farm). Later, Wu struck out on his own, creating the Hai Wang Group and founding a livestock breeding farm, a chitin processing plant, and other businesses. Three years ago, seeing that things were taking a turn for the better in Myanmar, he revived the instant-noodle plan that had been collecting dust for many years. The new factory will begin mass production as early as February of 2013.

The most important thing about instant noodles is flavor. Wu, who had no previous experience in this line, only dared to plunge into this unfamiliar territory because he had an extremely resilient and powerful partner in Namchow Thailand, who sell their food products (including rice crackers and instant noodles) in 40 to 50 countries worldwide.

Wu explains that the tastes of consumers in Myanmar are similar to those in Thailand. When it comes to choosing instant noodles, sour and hot flavors are preferred. In fact, the brand that currently holds the number-one spot in the instant noodle market in Myanmar is a Thai firm, MaMa.

With an overlap in flavors with Thailand of 90% and Myanmar being a new market that Namchow Thailand is extremely anxious to develop, the two parties quickly agreed to cooperate. It was decided that Wu would take responsibility for production, packaging, and marketing. Meanwhile, Namchow Thailand, with enormous research and development capabilities, would provide technical guidance for the flavorings.

Webber Wey, finance and administration director of Namchow Thailand, says that given the high costs of land and poor infrastructure in Myanmar, they would have considered investment on their own to be too risky. But given the opportunity to cooperate with someone like Kevin Wu, who has long been familiar with the local market there, they feel that they can’t lose.

For Wu, having the support of Namchow Thailand is like taking a giant Xanax: all his worries have magically disappeared. His voice filled with confidence, he reveals that he plans to hire a popular star to become spokesperson for the product, and will hold a national concert tour. Given that people in Myanmar idolize their pop stars, and that the entertainment industry as it exists now is not very developed, he expects the tour to generate “instant” enthusiasm!

The photo shows packets of Namchow instant noodles.

Hon Chuan Enterprise Company, known as the “bottle cap king of Asia,” already has plans in place to invest, via their subsidiary in Thailand, in construction of a factory in Myanmar before the end of this year.

You merely have to walk into any convenience store and open the soft drinks refrigerator to feel Hon Chuan’s omnipresent influence. An incredible 80% of the caps and 60% of the bottles for beverages in Taiwan are produced by Hon Chuan, known as the “shadow giant” behind the beverage industry.

Founded in 1969, Hon Chuan started as a small family factory, producing cap cushions and straws. Later their business expanded to include aluminum caps, plastic caps, and eventually PET bottles, and they later added beverage-bottling and OEM services to create an all-in-one integrated production line. International giants like Coca-Cola, Pepsi, and Taiwan’s own President Enterprises, as well as mainland China’s biggest beverage producer Wahaha, are all Hon Chuan clients.

“Local production” is the underlying strategy for Hon Chuan’s global deployments. Because transport is very expensive for beverages, logistics costs are best minimized by making the product as close as possible to the consumer. This is why Hon Chuan was, back in 1996, among the first firms to invest in mainland China, and today has 16 production facilities there. Since 2005 the company has been moving into the emerging markets of Southeast Asia, and Myanmar, just starting to open up, is the logical next step.

Hon Chuan chairman Keith H.C. Dai says that Hon Chuan began providing products to Myanmar’s largest drinks maker, Pinya, back in 2007. Pinya wanted to switch from glass to plastic—lighter and more resilient—for bottles for their carbonated beverages, but lacked the technical support to do so. It was only after they contacted Hon Chuan that Pinya was able to get their plan off the drawing board.

“We didn’t just sell them bottle caps and bottle pre-forms [a.k.a. bottle embryos], we sent technical personnel to teach them how to inflate the bottles and inject the beverages into them, steadily building up a cooperative relationship,” explains Dai.

Taking into account the stability in Myanmar’s economic and political conditions in the last few years, Hon Chuan finally decided to set up a factory there. At the end of 2011, a time when land prices had not yet begun to rise sharply in Yangon, they got the jump on their competition by purchasing 30,000 square meters in the Mingaladon Industrial Park. They are now only waiting to get their company operating license to break ground, and they expect to begin mass production at the US$10 million facility in the third quarter of 2013.

Dai says that when the factory is up and running, the company will cut transport costs by 15–20%. He says optimistically that Myanmar’s market for beverages is on the verge of taking off. Coca-Cola has already announced it will begin cooperating with Pinya, and other drinks manufacturers are also revving their engines. The early bird will get the worm.

Tony Chou, managing director of Cal-Comp Thailand, is currently evaluating various models for possibly investing in Myanmar.

Literally starting from the ground up, Kevin Wu and his wife are planning to construct an instant-noodle factory in Myanmar, and they will work with Namchow Thailand, a well-known firm owned by Taiwan’s Namchow Group, to develop the Myanmar market.

Hon Chuan produces bottle pre-forms and caps in their very up-to-date Thai factory.