HONG KONG, May 11, 2015 (GLOBE NEWSWIRE) -- Highway Holdings Limited (Nasdaq:HIHO) today announced it has purchased an additional 50 percent ownership interest in a Myanmar entity that operates a 15,000 sq. ft. manufacturing and assembly factory that the company has utilized for more than two years under a subcontracting arrangement. The company previously held a 25 percent ownership interest in this Myanmar entity. Terms were not disclosed.
Recent commerce law changes in Myanmar now allow non-Myanmar companies such as Highway Holdings to acquire interest in businesses that are domiciled and operating in Myanmar. These businesses are designated as "foreign companies" and provide foreign investors with a tax holiday if certain import/export conditions and government regulations are satisfied.
"The acquisition enables us to realize meaningful cost-savings and a competitive advantage, while maintaining the highest quality standards for our customers. The utilization of the facility in Myanmar complements our component manufacturing operation in China, while partially offsetting escalating costs there. We are gratified by the support of the Myanmar government agencies, our local partner, managers and employees, and look forward to long-term success in this emerging country," said Roland Kohl, chairman, president and chief executive officer of Highway Holdings.
As previously announced, one of Highway Holdings' leading European Fortune 500 customers approved the utilization of assembly manufacturing for a series of electric synchronous motors at the facility in Myanmar, initially under a pilot test program. Production for this product has since ramped up and approximately 500,000 units have already been shipped directly to the customer's factory in Germany from Myanmar. The production of air turbines for another customer has been ramping up simultaneously, with several millions pieces to date assembled at the Myanmar facility. "Our high-quality production standards have been successfully applied and transferred one-by-one to Myanmar, supported by ongoing training and monitoring by our staff in China. The setup of a socially responsible, modern, high-quality and world-class operation in Myanmar has been accomplished in a relatively short time frame, and we are extremely pleased with the outcome.
"We anticipate further growth opportunities based on demonstrated quality and service, with expectations for additional business from these customers and also other multi-national organizations moving forward," Kohl said.
About Highway Holdings
Highway Holdings produces a wide variety of high-quality products for blue chip original equipment manufacturers -- from simple parts and components to sub-assemblies and finished products. Highway Holdings' administrative offices are located in Hong Kong, with manufacturing facilities located in Shenzhen in the People's Republic of China and assembly services in Myanmar.
Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements which involve risks and uncertainties, including but not limited to the ownership and operation of the Myanmar facility, additional growth potential at this facility, economic, competitive, governmental, political and technological factors affecting the company's revenues, operations, markets, products and prices, and other factors discussed in the company's various filings with the Securities and Exchange Commission, including without limitation, the company's annual reports on Form 20-F.