UNIVERSITI TUN HUSSEIN ONN MALAYSIA

86400 Parit Raja, Batu Pahat, Johor.

JOINT VENTURE

Prepared by,
Marsita binti Omar
CP090101
 Joint venture is the participation of two or
more companies jointly in an enterprise in
which each party contributes assets, owns the
entity to some degree and share risk.
 All parties agree to share in the profits and
losses of the enterprise.
 Help both companies share what may be the
substantial cost of starting a new operation.
 Joint venture allows foreign companies to
penetrate the market and get experience in
other countries
 A joint venture may be a corporation, limited
liability company or other legal structure,
depending on a number of considerations
such as tax and tort liability.
- INTERNAL REASON

- COMPETITIVE GOALS

- STRATEGIC GOALS
INTERNAL REASON
 Build on company's strengths
 Spreading costs and risks
 Improving access to financial resources
 Economies of scale and advantages of size
 Access to new technologies and customers
 Access to innovative managerial practices
COMPETITIVE GOALS
 Influencing structural evolution of the industry
 Pre-empting competition
 Defensive response to blurring industry boundaries
 Creation of stronger competitive units
 Speed to market
 Improved agility
STRATEGIC GOALS
 Synergies
 Transfer of technology/skills
 Diversification
 Set Clear Goals

 Find a Partner

 Plan the Venture

 Manage the Relationship

 sharing of risk with a venture partner
 provide skill
 High profit
 provide companies with opportunity to gain new
capacity & expertise
 allow companies to enter related businesses or new
geographic market or gain new technology knowledge
 conflict may arise
 different culture and management style in poor integration
and co-operation
 imbalance in level of expertise, investment or asset
brought into the venture by the different partners
 problems are likely to arise if the objective of the venture
are not 100% clear and communicated to everyone involved
January 29, 2010 21:31 PM

Malayan Flour Mills In Joint Venture With Toyota Tsusho

KUALA LUMPUR, Jan 29 (Bernama) -- Malayan Flour Mills Bhd (MFM) has formed a joint venture with Toyota Tsusho
Corporation and Toyota Tsusho (Singapore) Pte Ltd to carry out trading of raw materials for animal feed.

The joint venture announced today allows the newly established company, Premier Grain Sdn Bhd, to leverage on
Toyota Tsusho's global supply network to get more feed grains, said MFM managing director Teh Wee Chye.

Toyota Tsusho, a member of the Toyota Motor Group, is the largest trading company in Japan with businesses
across the industry involving raw materials, agriculture and high technology. MFM will own 51 per cent of the joint
venture, with the remaining 49 per cent held by its Japanese partners.

"The joint venture will allow us to grow further in terms of economies of scale and with this, we can put more
grains in the pipeline via their global network already established," Teh said after signing ceremony here on Friday.

The feed grains will be used internally and be for sale in the Malaysian market, he said.
The signing was witnessed by Deputy International Trade and Industry Minister Datuk Jacob Dungau Sagan. Toyota
Tsusho is currently handling feed grains from Brazil, Argentina and Australia.

Teh said MFM was currently importing about 300,000 tonnes of feed grains such as corn and soy oil and hoped to
increase the amount to 500,000 tonnes via the tie-up. "The grain market in Malaysia is about three million tonnes
annually. So, there is more room for us to secure a bigger market share," he said.

MFM is engaged in the milling and selling of wheat flour with its allied products. Other activities include processing
and selling of poultry products, breeding and selling of day-old chicks and eggs, contract farming services,
manufacturing and selling of animal feed and related raw materials, provision of transport management services,
and investment holding.

"We see growth opportunities in the food business despite the economic meltdown and we are committed to invest
further in this sector. This joint venture will strengthen our commitment towards it," he said.-- BERNAMA
 Joint venture between Malayan Flour Mills and Toyota
Tsusho
 establish company Premier Grain Sdn Bhd to carry
out trading of raw materials for animal feed
 MFM will get 51% of the joint venture and 49% held
by Toyota Tsusho
 This joint venture will allow to grow further in
terms of economies
 can put more grains in the pipeline via
their global network already established
 With this joint venture, it will be increase
the trade volume
 It can support between 300,000 tonnes &
500,000 tonnes of feed gain a year
 With this joint venture, there is more
room to secure a bigger market share.
 Eachmode of entry have their advantage and
disadvantage
 The firm must decide which mode of
entry they can use suitable with their
firm.
 the firm need to analyze to locate a good
company that can give benefit to their
firm before they do the joint venture.