Canned food maker to upgrade production line
Canned food maker to upgrade production line
Canned fruit and vegetable producer Lao Agro Industry Company (LAICO) based in Vientiane province plans to invest millions of dollars to upgrade its production line and improve efficiency.
“Our development project will come at a cost of about 24 billion to 32 billion kip (US$3 million to US$4 million),” a senior company official, Mr Chanin Awakulpanich, said yesterday.
“The project has already been approved after we proposed it to the government recently. The proposal is to ensure that we can receive financial support from the government, especially seeking loans from the state bank,” Mr Chanin said.
The improvements will include adding more production lines and a larger boiler, which need to be completed next year. LAICO wants to improve the production line because it hopes to lower ongoing production costs as it prepares to face more competition in the years to come.
The company will have to spend large sums of money to upgrade the equipment and production line system, which will have to be imported and will be costly. “Just one boiler will cost about 1.6 billion kip (US$200,000),” Mr Chanin revealed.
Currently the company has a large number of foreign buyers in both EU and Asean countries, including the UK, France, Germany, Poland, Vietnam and Thailand, while it is focusing on finding more buyers in Asia.
So far it has not found any new customers in Asia because the company is still engaged in product price negotiations. Asian buyers want to buy at a cheaper price than is being offered by the company.
There is interest in Lao canned products from the Republic of Korea after the company displayed them at trade fairs in Seoul recently.
The company cans sweetcorn as well as producing pickled garlic and cabbage, rambutan in syrup, baby corn in brine, bamboo shoots, sweetcorn milk and palm seeds on its 5-hectare site in Thoulakhom district. It sources most of its raw materials from forests and local farms, although some vegetables are imported.
LAICO is now selling their canned products for US$14.50 per case to EU markets, but Korean buyers want the price a little lower, at about US$13.20. The company will also have to pay import taxes to get its produce into Korea.
Its exports to the EU markets do not attract taxes or duties through the use of ‘Form A'. EU markets have a policy to allow goods in free of import tax when they come from least developed or developing countries.
“Once we complete the production system upgrade, we will also have new products, including concentrated juice, which will be made of pineapple and passion fruit,” he said.
LAICO's factory employs 300 people when there is a large supply of corn, its workforce comprising both permanent and temporary staff.
The company can produce an average of 3,600 tonnes of canned or bottled fruit and vegetables each year, with about 5 percent sold on the domestic market, while the remaining 95 percent is exported.
It has three international accreditations which certify production and product quality, namely Good Manufacturing Practice (GMP), Hazard Analysis and Critical Control Point (HACCP) and British Retail Consortium (BRC).
vientiane times
