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Garment maker boosts output for Japanese market
A major garment exporter, Santei-Lao Co Ltd, is preparing to build a third garment factory in Vientiane once it has accumulated a workforce of at least 600 people later this year.
“We are currently training staff at our own training centre to work at the third factory,” said the company Managing Director, Mr Phetsanti Boutsivongsak, at the second plant's opening ceremony yesterday in Vientiane.
The company has trainers from Japan and Lao staff who have been trained in China.
The third factory will be in Thongpong village, Sikhottabong district, and will be much larger than the first two.
The second plant was opened after six months trial production with an investment of about 18.5 billion kip (US$2.3 million) in Phonsavadneua village.
The ceremony was attended by officials from the ministries of industry and commerce, planning and investment, Japanese Embassy to Laos and private sector.
Mr Phetsanti said it was a joint investment between a Japanese company group holding a 55 percent share and a local garment company holding 45 percent.
The second plant employs 280 local people while the first, in Chanthabouly district, has about 200 employees and represents an investment of about 8.6 billion kip (US$1 million).
The company soon expects to increase production at its first plant by taking on a further 70 employees.
“We have plans to produce women's clothing and then men's clothing for export to Japan,” Mr Phetsanti said.
He said the company has expanded production because of increased demand for its products and also plans to expand production to the provinces soon.
“The company expects to have a total of 20 factories in the future and each plant will employ at least 300 people,” he said.
According to a Lao Garment Industry Association report, Laos currently has 104 garment factories of which 53 are producing for export.
Last year's exports were about 1.6 trillion kip (US$195.4 million), which is a large increase on 2009.
Association President Mr Onesy Boutsivongsakd said in December that Lao garment exports were worth US$189 million in 2007 and US$159 million in 2008.
Mr Onesy expressed strong confidence that exports would grow by 10 percent in 2011 as orders from European nations, the US, Japan and the Republic of Korea have all increased.
The number of Lao garment manufacturers has also increased due in part to rising labour costs in China, which have made the higher prices of Chinese garments uncompetitive and led to importers placing orders with manufactures in countries that offer lower prices.
More foreign garment investors hope to invest in Laos due to its low labour costs. However one of the main challenges facing the Lao garment industry is a shortage of labour, as many workers prefer to seek employment outside the country where higher wages are on offer.
“We need a further 8,000 workers to boost output so we can meet demand,” Mr Onesy said.
vientiane times
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