MVP Global Infrastructure Group has signed a cable manufacturing venture with China’s Tianjin Suli, the two companies said in a joint statement on Monday.
The two firms signed a memorandum of understanding last Wednesday during President Rodrigo Duterte’s trip to China. The undertaking calls for the setting up of a 70 percent-30 percent joint venture that will produce high-end cables in the Philippines.
The Suli Group will have a 70 percent stake in the firm, while the MVP Global will hold the remaining 30 percent.
The Chinese firm’s 70 percent holdings in the venture will not violate the country’s laws, the Securities and Exchange Commission said, noting that the deal is “not covered by foreign ownership restrictions because it is a manufacturing, not a public utility operation.”
Under the MOU, Suli will finance the venture, and run all aspects of its operations, while the local partner will facilitate market access, secure requirements to start the business, find the right location for the new manufacturing enterprise, among others.
Enrique Gonzalez of MVP Global’ said the joint venture is expected to produce $3-billion worth of products out of ultra-high voltage cable, aluminum alloy cable, power cable, military industrial cables, special cables five product structure. The technology will be provided by the Suli Group, globally known for its innovation and research and development in the high-end cable industry
“With this announcement, we will be bringing to the Philippines not only fresh investments for a new venture, but also our internationally recognized trademarks, premium cable products and industry experience we have built through the years,,” Suli Group Chairman Zhao Junyin said in the statement.
For his part, MVP Global’s Lim Chen Herng said: “With MVP growing its portfolio throughout the region and positively looking into infrastructure- related opportunities, we are very keen to take advantage of our extensive network throughout South East Asia. By strategically bringing both companies together, we hope to be able to replicate our partnership with added value proposition into various industries across multiple nations.”
MVP Global is a private investment group with investments in real estate, food and beverage, steel, technology, telecoms, and construction. The principals of MVP are looking to accelerate infrastructure development in Southeast Asia.
The Suli Group, meanwhile, is a state-owned high-technology company with their main concentration in manufacturing, research and development, logistics, finance and international trade. It is also one of the largest cable manufacturers and distributors in Asia, with over $6.5 billion in sales.
It is the first company to receive funding from the Chinese-led Asian Infrastructure Investment Bank.