Lao manufacturing sector tipped for growth
Lao manufacturing sector tipped for growth
The manufacturing sector in Laos is one of three sectors to have received the largest funding inject ion this year, giving new hope that productivity will see rapid growth in the coming years.
According to a report from the Ministry of Planning and Investment, the government mobilised US$2.8 billion in local and forei gn investment this year, with construction, agriculture and forestry and manufacturing at the top of the list of the sectors receiving the most attention from investors.
The upswing in investment in man ufacturing is lar gely due to the opening of several special economic and specific zones in Laos. These zones registered 86 investment projects with investment funding of US$151 million, says the report on the implementation of the 2014-15 socio-economic development plan, which was released recently.
One of the largest investment projects in the manufacturing sector this year is the US$280 million cement factory in Khammuan province. The factory is expected to be complete in 2018 and will help boost the production of cement to meet the surging demand for construction materials in Laos.
The manufa cture of other construction materials such as bricks, tiles and steel is also booming in response to market demand. The production of consumer goods such as dried fruit, baked goods, soft drinks and beer has also seen rapid growth in recent years due to larger demand in the domestic market.
The handicrafts sector, notably silk textiles and wooden furniture, has also expanded thanks to the government's policy to add more value to these products prior to export. The garment sector has also undergone a growth spurt as many foreign investors have moved their production bases from China to Laos.
The Ministry of Industry and Commerce reported recently that the value of the manufacturing and handicraft sectors was estimated to reach 5,548 billion kip (US$693 million) in 2015.
The increase in production is a positive sign for Laos as the country prepares to join the Asean Economic Community at the end of this year.
Officials say one of Laos' advantages in manufacturing is its ready access to natural resources and cheap labour. Laos has plenty of minerals such as copper, potassium and bauxite, which are the raw materials for processing plants.
Laos also has the potential to develop its agribusiness thanks to a large area of fertile land. The plentiful supply of agricultural produce is said to play a significant role in driving the development of the food processing industry.
The government has a clear policy to boost the development of food manufacturing as part of efforts to industralise and modernise the nation.
