|
Thai cement maker views Laos as growing market
A Thai cement maker considers Laos to be one of the fastest growing markets in the region, according to the company's managing director.
Speaking at a press conference in Vientiane last week, SCG Trading Laos Co Ltd Managing Director Mr Anupong Tansakul said the company sold about 307 billion kip (1.2 billion Thai baht) worth of SCG products in Laos last year, representing a 10 percent increase compared to the previous year.
He said the 10 percent growth of the company's sales in Laos was the result of strong economic growth in the landlocked country, with rapid expansion in the construction sector in particular, causing demand for cement and other construction materials to increase.
“We have learnt that the Lao economy is one of the fastest growing in the region,” he said, which had inspired the company to expand its market into Laos.
Mr Anupong said his company expected about a 12 percent increase in its export value in the Lao market in 2012, thanks to robust economic growth.
The Lao government expects to see GDP growth of at least 8 percent growth this year. The main driving forces in the economy are mining and the construction industry. However, the World Bank has forecast that growth will fall from 8 percent last year to about 7.5 percent this year, due to the ripple effects of the European debt crisis.
Tourism and the garment industry are major foreign exchange earners for Laos and are expected to be the first Lao businesses to feel the negative effects of the European debt crisis. The construction sector, however, can expect to see continuing robust growth due to the ongoing construction of hydropower plants in Laos.
Mr Anupong said that a large proportion of SCG cement sold in Laos is supplied to projects in Lao-Thai border areas where Lao cement is not available.
There are six cement factories in Laos with total production capacity of about 1.5 million tonnes per year. Lao cement factories cannot supply all areas of Laos due to high transport costs, leaving room for Thai cement makers to supply cement to certain sections of the Lao market.
Thai cement factories gained temporary permission from the Lao government to sell cement here in competition with Lao products when the supply of Lao cement was disrupted in the major market of Vientiane and elsewhere.
According to Vientiane Industry and Trade Department officials, Lao cement makers must become more efficient in order to be competitive with foreign products once Laos joins the Asean Free Trade Area (AFTA) in 2015, as free market access is one of the requirements for being part of the Asean economic community.
The trade officials said Thai cement is currently cheaper than that made in Laos.
SCG hopes to become a leading cement maker in Asean once the region becomes a single market and production base in 2015.
phnom penh post
|
