New Toyo

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It is a JV between Tien Wah (51%) and New Toyo (49%) that controls Anzpac.
It also serves as a conduit/trading post where New Toyo will cream off a certain % for commission. MEIL is located at Hong Kong.
New Toyo's effective stake in MEIL is 76.5%, comprising its 49% direct stake and indirect stake through Tien Wah. The set up of MEIL was an ingenious move as it allows New Toyo to cream off most of the group’s profit (approximately 70%). Had MEIL been 100% owned by Tien Wah, New Toyo share of group profit would have been only 54% since it owns 54% of Tien Wah.

In seeking sharholders' approval to acquire Anzpac and take on the seven-year supply contract from BAT, both New Toyo and Tien Wah explained that while Tien Wah operated the cigarette carton printing business within the New Toyo Group, a joint venture, combing the strengths of the two, stood a better chance of convincing BAT than Tien Wah were to act alone.
It is also necessary to note that Tien Wah was once a one-factory concern. It grew only after being acquired by New Toyo, who then injected its two low-cost printing factories in Vietnam into Tien Wah, making Tien Wah a bigger and more resilient outfit.
Investment in MEIL exposes New Toyo to risks. Frequent package refreshing required by BAT entailed equipment acquisition, revision of work flow and more product development and innovation. More recently, BAT has required production of low-defect cartons.
It is true that New Toyo, through its stake in MEIL, is now benefiting more, as Tien Wah has responded to BAT's requirements well. But at the outset there was no certainty that Tien Wah could fulfill BAT requirements; and had Tien Wah failed, New Toyo would bear a larger share of loss.
The higher share of Tien Wah profit may be viewed as fair reward for risk taking by New Toyo.
There have been laments that Tien Wah is being bullied by BAT. Another way of viewing this is that BAT's demands have provided Tien Wah the opportunities to rise to the challenges and set itself apart from the rest in the industry.