Lao garment industry posts five percent export growth
Lao garment industry posts five percent export growth
The export value of garment products produced in Laos increased by around five percent over the first six months of this year thanks to the expansion of industrial capacity, according to industry representatives.
The Lao Garment Industry Association's President, Mr Onesy Boutsivongsakd said last week that the export value of garment products in the first half of this year reached US$95 million, about a 5 percent increase compared to the same period last year.
He spoke to the media during a ceremony to unveil a new enterprise survey in Vientiane, which shows that the business climate in the country has seen improvements over the past few years.
Over 2014, the Lao garment industry association forecast that the export value of garment products would reach US$226 million thanks to an increasing number of garment firms and also increasing demand for the products on the world market.
Mr Onesy said many garment factories have applied new and modern technology to boost their production capacity after facing difficulties when it comes to recruiting new labourers.
He added that another two or three garment manufacturers had established garment firms over the past years, giving a major boost to industrial production capacity.
A number of garment firms have relocated their production bases from China and Japan into Laos thanks to the cheap labour force.
Political unrest in the neigbouring countries of Cambodia and Thailand also make Laos a more attractive investment destination for garment firms given its longstanding political stability by comparison.
“One of the main factors which makes Laos an attractive investment destinations is that there are no strikes in Laos as there are in neigbouring countries,” Mr Onesy said, adding that the strikes cause garment production disruption and delays to exports.
Despite Laos becoming more attractive due to its political stability and peaceful labour sector, the country needs to address shortages in the available labour pool.
“We need about 60,000 labourers to work in the industry,” he said, noting that at present, Lao garment industry employs around 30,000 people.
One of the main factors which make the garment industry unable to recruit new workers is the large inflow of domestic workers into neigbouring Thailand, where better wages are on offer.
Thailand offers a minimum wage of 9000 Thai baht (2,225,000 kip) a month while the minimum wage in Laos is about 620,000 kip per month, or less than a third of what is on offer in Thailand.
Mr Onesy confirmed that demand for garment products on the world market had recovered over the previous years, adding that the EU has posted a large amount of garment orders with Lao garment manufacturers but they cannot meet the supply demands.
“The demand for garment products is high so we cannot secure the supply of garments to the market due to the lack of labour available,” he said.
vientianes times
