Lao manufacturing and handicrafts sector sees 10 percent growth
Lao manufacturing and handicrafts sector sees 10 percent growth
The overall output of the processing industry and handicraft sector saw a remarkable increase over the first six months of this fiscal year, as a number of new factories commenced production.
According to a report from the Ministry of Industry and Commerce, the output value of the processing industry from October, 2012 to March, 2013 was 2,374 billion kip (about US$312 million), a 10.77 percent increase compared to the same period last year.
The increasing industrial output was due largely to the fact that several major factories commenced operations last year.
At present, the country has many processing factories including rubber processing plants, sugar refineries, dried fruit factories and coffee roasting factories. There are also numerous cement kilns, steel mills and food processing factories.
Despite the remarkable growth of the processing industry, the government was not satisfied with the achievements as growth was only 47 percent of the annual plan. Meanwhile industrial growth in the first half of this year should be 50 percent of the annual plan.
Officials from the Ministry of Industry and Commerce said that Laos has become one of the more attractive investment destinations in Asean after the country was accepted as a member of WTO earlier this year, and that the improvement of the business climate is encouraging both local and foreign businesses to invest in the processing industry.
Savan-Xeno special economic zone is one of the industrial parks, which is attracting foreign investment in the industrial sector. At present, the zone accommodates a number of processing plants including a tin smelting factory and battery assembly plant.
A Japanese car component manufacturer has also decided to move its production base to the special economic zone after learning about the development potential of the land locked country.
T o boost investment in the industrial sector, the government has established more than 10 special economic zones in the country, aiming to entice investors to move their production bases to Laos, as the cost of labour in other parts of the region continues to increase.
The commerce officials said that political stability and the stable growth of the Lao economy is contributing to the country's attractiveness to foreign investors, adding that the supply of raw materials in particular agricultural fields is also helping to encourage foreign investment in Laos.
The Lao government is currently revising the industrial processing law, aiming to boost the long term sustainability of the industry in Laos. The revised law, which is still in the draft stage, aims to ensure that the processing industry causes no harm to the environmen t.
The revised law also aims to further promote investment in the sectors in which Laos has potential such as the agricultural processing industry, with the country well positioned to produce goods for both domestic consumption and export. At present, Laos imports most of its consumer goods from neigbouring countries, mainly Thailand.
Economists have urged the government to pay greater attention to promoting the processing industry as domestic consumption continues to increase. They said that a sufficient supply of goods will enable the country to curb inflation pressures.
vientiane times
