SINGAPORE - AGV Group has entered into a new memorandum of understanding (MOU) to develop a regional hot dip galvanising business while scrapping a previous agreement for a similar business in Myanmar.
AGV, a specialist in the galvanising process used to protect iron and steel products, announced late on Wednesday (May 2) that it has entered into an MOU with Hyday (South Pacific) Investment to develop the hot dip galvanising market in South-east Asia and China.
The agreement includes jointly establishing a hot dip galvanising facility in Myanmar. AGV has also agreed to provide "best prices" for galvanising services to the collaboration, while Hyday will give preferential priority to AGV for galvanising services in South-east Asia and China.
The MOU is legally binding and will last for three years from April 2018. Either party may terminate the deal after giving two months' notice.
Alongside the new MOU, AGV is terminating a previous MOU that it had entered into with Myat Mi Ba Co to create a joint venture in Myanmar to provide hot dip galvanising services in the South-east Asian country.
AGV inked the first version of this deal in January 2018 with the intention of holding an initial 80 per cent of the joint venture, and with Myat Mi Ba having the option to acquire a quarter of AGV's stake after two years. But no joint venture agreement had been signed by the initial deadline of March 31. In April, both parties extended the deadline for signing the joint venture deal to April 30.