Suzuki Motor Corp. said Tuesday it has halted production at its two auto plants in Myanmar to ensure the safety of its employees following a military coup the previous day, as other Japanese companies from retail giant Aeon Co. to auto-parts maker Denso Corp. were scrambling to assess the situation.
Suzuki said it stopped output on Monday afternoon at its factories in Yangon where 400 employees work.
Suzuki has a 60% share of new car sales in Myanmar, having sold 13,200 units in 2019. The company said it has yet to decide on when to resume production.
The Myanmar military on Monday seized power from the democratically elected government of Aung San Suu Kyi, who was detained along with other leaders of her party in early morning raids.
Major Japanese firms including Kirin Holdings have pushed into Myanmar since Suu Kyi's party won a landslide election in 2015 and established the first civilian government in half a century.
Although some investors have grown wary over the persecution of the Rohingya Muslim minority, hundreds of Japanese companies have remained in Myanmar, drawn by an emerging market of more than 50 million people.
There are around 400 Japanese firms doing business in Myanmar, according to the government-backed Japan External Trade Organization.
Toyota Motor Corp., which had planned to commence operations of its first production plant in the country this month, said it is currently "assessing" the situation.
Denso said it was struggling to reach staff after phone and internet connections were disrupted.
"We haven't been able to establish contact with them, so we don't know what the situation is like," a spokeswoman said.
A spokesman for Aeon, which has been planning to open a shopping mall in Myanmar in 2023, said it finally got through to local staff via the internet.
"We have not made any decisions," he said. "For now, we are just closely monitoring the situation."
Aeon said that it has confirmed the safety of Japanese staff posted in the country, and will keep its supermarkets open while prioritizing the safety of local workers.
The coup heaps more pressure on beer-maker Kirin, which has been reassessing its Myanmar venture after the United Nations identified owners of Myanmar Economic Holdings Public Company (MEHL), Kirin's local partner, as members of the Myanmar military.
The military has been accused of genocide and other war crimes against the Rohingya. Myanmar denies genocide, saying its military was carrying out legitimate operations against Rohingya insurgents who attacked police posts.
A Kirin spokesman said it was monitoring the situation, and still planned to take until the end of April to make a decision about its activities in Myanmar. It recently said a third-party probe into MEHL's military connections had yielded "inconclusive" results.
Kirin remains on U.K.-based pressure group Burma Campaign's "Dirty List" of international companies doing business with the military.
Myanmar accounts for less than 5% of Kirin's global beer sales, but is one of only a handful of its growing markets.
Veteran public relations consultant Bob Pickard said companies now faced a growing public relations risk.
"Japanese companies invested in Myanmar and especially those with military connections now need to be agile in articulating what these events mean for them," said Pickard, who worked in Japan for many years.
"'Business as usual' poses an acute risk — a public relations disaster for any Japanese companies that are slow to condemn what has happened today."
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