Danish clothing manufacturer expands into Laos
Danish clothing manufacturer expands into Laos
The biggest heavy garments company in Denmark, Mascot International, is expanding its production operations into Laos after studying the country's positive business climate.
One of the largest manufacturers of its kind in Europe, Mascot produces heavy duty uniforms and safety boots that are usually used by construction workers and airport employees, Managing Director for Vietnam and Laos, Mr Thomas Bo Pedersen, said in an interview last week.
The company has been operating three factories in northern Vietnam since 2007 and is currently constructing its fourth in Laos, which, according to Mr Pedersen, is “a suitable place” for the company's expansion.
“The time has come for us to grow even further and we have been keeping an eye on Laos for a very long time, wondering when it would be right for us to pursue manufacturing here,” he said.
“I have been following the development of the business climate in Laos for the past six or seven years. We have seen very positive signs from a business point of view.”
He said working with Lao authorities has been “so easy” compared to that of other Asian countries, commending the fast business processing and approval of land leases.
He added that he saw positive attention paid to Mascot by the government and felt very welcome especially because of “favourable conditions such as tax incentives.”
Mr Pedersen said that logistically the country “fits nicely” into Mascot's business set up.
Raw materials from Vietnam will be transported to Laos and the same vehicles will pick up the finished products for delivery back to Vietnam where they will be shipped to Europe and the US.
Mascot's raw materials are imported from different parts of the world, including China, Pakistan, the Middle East and Europe.
The company will employ 800 people and 95 percent of them should ideally be Lao citizens. They plan to produce 1.2 million units of clothing per year and will be at full production capacity in 2014.
Mr Pedersen said the factory, which is located on a 9,000 square metre site at a specific economic zone 20 kilometres from Vientiane city centre, is “a completely modern factory”, in line with international standards.
“Everything will be air-conditioned. We will have a health clinic for the workers, free food, and good wages. In many ways, it will be just like what we have done in Vietnam.”
The company's financial outlay for the land and building was US$5 million, while the first phase of operations should entail a cost of US$8-9 million.
Mascot, which supplies 98 percent of its clothing to Europe, will be producing three million units per year through its four factories.
It is eyeing up the colder regions of China and Korea as future markets for its heavy garments and footwear.
“In general, we are very much a growing company. Before, the market in Europe was a bit slow but we've had an average growth rate of 20 percent per year. And we believe that in the future we will continue to grow. That's why we are expanding production,” he explained.
vientiane times
