MJL Bangladesh has become the first local company to explore the untapped Myanmar market by setting up a joint venture company in the once isolated country.
The company got the chance after the central bank recently allowed capital investment outside Bangladesh, a long-awaited demand of the Bangladeshi businesspeople.
The joint venture company — MJL & AKT Petroleum Ltd — formally started marketing Mobil brand lubricants on July 2 in Yangon with an initial investment of $1 million.
MJL Bangladesh owns a 51 percent share and Aung Kyun Thar (AKT) Co of Myanmar the rest in the new company.
Bangladesh Bank has allowed MJL to take $510,000 (equivalent to around Tk 4 crore as on yesterday’s exchange rate) as its equity investment in the company. The remaining $490,000 has been invested by the Myanmar’s AKT.
“Initially, we will import Mobil brand lubricants and distribute those in the Myanmar market,” Azam J Chowdhury, chairman of MJL & AKT Petroleum Ltd, told The Daily Star.
MJL & AKT Petroleum will also import some lubricants produced by MJL Bangladesh, he said.
Chowdhury said he has a plan of building a plant by the end of the next year to manufacture lubricants in Myanmar, subject to the approval of the authorities concerned.
Many Bangladeshi businesspeople visited Myanmar since the country has opened up its economy after remaining isolated for long from the rest of the world.
Businesses from China, India, the US and Europe are considering the country as their next potential investment destination.
Also, the Myanmar parliament last year passed a foreign investment law, clearing the way for overseas companies to invest in the country.
“We have allowed MJL Bangladesh to invest in Myanmar for market exploration,” said Ahsan Ullah, executive director of Bangladesh Bank.
Initially, businesses can get the opportunity from their export retention quota with the central bank, he said.
Yet, not everyone will be allowed to invest in foreign countries, he added.
“We will decide on a case-to-case basis,” the BB official said, adding that the sectors, which have export potential such as pharmaceuticals, will get preference.
MJL Bangladesh Ltd, formerly known as Mobil Jamuna Lubricant Ltd, is the first and only joint venture company established by ExxonMobil in the downstream petroleum sector of Bangladesh.
EC Securities Ltd, an investment wing of East Coast Group, owned by Chowdhury and his family, holds the majority stake after ExxonMobil’s divestment in 2003.
Later, MJL Bangladesh commissioned a lube oil blending plant, the first of its kind in the country, in May 2003.