SEOUL, KOREA - Daedong Industrial Co., better known as its trade name "Kioti," has won a multi-year contract worth 100 billion won a year to supply tractors and cultivators to Myanmar, overtaking larger rivals from China and Japan. Despite a generous offer by the Chinese government to provide a US$300-million concessional loan and an aid package worth $100 million to give away farm machines by the Japanese government, the government of Myanmar picked the Korean company.

 

In late October, Myanmar's parliament approved a proposal by the Ministry of Cooperatives to purchase agricultural machines worth $100 million. It was in effect a ratification on the agreement signed in August between the ministry and Daedong Industrial. The amount is equivalent to about one sixth of the company's sales revenue last year.

 

Under the terms of the agreement, Daedong will supply 4,700 tractors, 1,500 cultivators, and 500 combine harvesters. The Myanmar government will provide these machines to farmers at low cost. The government plans to supply the machines for the next ten years in partnership with Daedong.

 

Despite the uphill battle against rival bidders from Japan and China, the company finally won probably because the Myanmar government wanted to learn Korea's agricultural development experience in the 1960s and 1970s. China is the No. 1 country that invested most in Myanmar at $4.3 billion as of 2012. Japan is ranked No. 1 in official development assistance volume ($92.8 million).

 

Article provided by The Korea Economic Daily