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Robust export market restores sparkle to diamond industry
Diamond cutters in Laos aim to boost output by 30 percent over six months of this year after seeing the potential for a resurgence in orders from European Union markets.
Vientiane Diamond Cutting Limited expects to produce 11,000 diamonds a day over a six month period - a 30 percent rise compared to last year.
The boost in output comes on the back of a rebound in the company's main market, as the EU recovers from the recent economic recession.
The company's Personnel and Administration Manager Mr Bounthong Naovanath told Vientiane Times this week that to reach this target the company will hire up to 900 workers until June, up from 730 employees at present.
The company is hiring new employees starting this month, but is finding it hard to entice new recruits because a boom in factories around the country is giving job-seekers plenty of options.
Mr Bounthong said it was harder to find employees due to the expansion of the country's industrial sector, especially garment factories.
Other plants are also hiring and are competing for new hires by offering various incentives.
When the present six-month production plan ends, the company will make a further plan for the next six months after assessing trends in the domestic and overseas economies.
But Mr Bounthong was optimistic that the company's output, especially exports, would go to plan in 2011 because the economy of many countries had recovered from the crisis and purchasing power was expected to strengthen.
Although the global economic climate favours expansion, several factors in Laos such as high inflation and a strong kip demand mechanisms to manage the situation to minimise the impact on exports.
According to the Bank of the Lao PDR, the inflation rate rose significantly from the beginning of last year. In January inflation stood at 4.20 percent but had risen to 6.70 percent in November. This was attributed to factors such as rising oil prices, low domestic output, and rising food prices.
The stronger kip has also affected production costs in the export sector.
At the start of last year the kip was valued at 8,488 to the US dollar, but by yesterday it stood at 8,044 per dollar.
In 2010 Vientiane Diamond Cutting Limited recovered from the impact of the 2009 global financial crisis and began to receive more orders.
Mr Bounthong said the company was able to export 7,500-7,800 diamonds per day.
In 2009, the company's exports fell by 60-70 percent compared to 2008 because of the global economic recession. Weak orders cut output by 30 to 50 percent and working hours were reduced from a full day to a half day.
Vientiane Diamond Cutting Limited opened its factory in Xaysettha district in 1999, with Belgian investment.
vientiane times
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