Lao, Indian furniture makers carve out cooperation niche
Lao, Indian furniture makers carve out cooperation niche
A major local furniture exporter, Furniture-Wood Product Manufacture, will sign a contract on business cooperation with an Indian wood processor in Vientiane within the next two weeks.
“We hope to build a wood processing factory to produce timber veneers for furniture production and export to the Indian market,” Furniture-Wood Product Manufacture owner Mr Khamphay Somsana said last week.
“We have drawn up a draft agreement,” he said.
“This will be a joint venture investment of about 16 billion kip (US$2 million). Furniture-Wood Product Manufacture will hold a share of 51 percent, while the Indians will hold 49 percent.”
The factory will be located in Xaythany district, and will produce both soft and hard wood veneers.
“Our factory will employ about 300 to 400 local people,” Mr Khamphay said. “We will focus on the sustainable use of wood, using all available timber to extract the largest value for our products.”
Business cooperation between the local producer and the Indian group began after the Lao Furniture Association signed a memorandum of understanding (MOU) with an Indian businesses group in April.
The MOU was designed to facilitate better communications between association members and Indian businesspeople who wish to invest, and Furniture-Wood Product Manufacture are one of the association members to benefit.
The association's Deputy President, Mr Phoungphachanh Sengmixay, said recently the Indian buyer group will require about 600 cubic metres of wood per month initially. The products purchased will include plywood sheets as well as door and window frames.
Another association member, Phoungphachanh's PKK Lao Furniture Factory Ltd, is also preparing to make furniture according to Indian requirements and criteria, while other association members are currently upgrading the production capacity of their plants.
The association had already signed a business cooperation agreement with a Chinese furniture importers group last October, before concluding the MOU with the Indian business group.
The agreement with the Chinese group will see the production of furniture worth up to 2.6 trillion kip (US$333 million) per year for supply to the Chinese market over the next 20 years.
Under the agreement, Lao furniture makers need to upgrade their factories to meet international standards and increase the number of workers they employ, while the Chinese side can offer a guaranteed market.
The association now has 52 member factories in both Vientiane and the provinces, up from 47 last year.
It will continue encouraging other furniture makers to register as members. They will need to do so to ensure they have sufficient timber for production, because the association will supply timber only to its members.
vientiane times
