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Laos: New coffee factory to perk up market supply
Construction of Dao-Heuang Group's second coffee processing plant in Champassak province is expected to be complete by February.
“It is an investment of almost 800 billion kip (US$100 million),” Group President Ms Leuang Litdang said at a distribution agreement signing ceremony two weeks ago in Vientiane.
The plant has been under construction for over a year now. Once it starts commercial operation, it will process both raw and instant coffee for local and export markets.
Group General Manager Mr Sisouphonh Sihalath, said the plant will have a production capacity of 450 kg of instant coffee per hour.
Ms Leuang said it will be able to produce over 3,000 tonnes of instant coffee per year from 8,000 tonnes of raw coffee.
The group is currently supplied with about 20,000 tonnes of raw coffee per year, which exceeds production capacity. “So we are also exporting raw coffee to the Japanese market,” she said.
Miracle Lao Trading Co Ltd President Ms Chanthamaly Saysanith said “My company has signed a distribution agreement with the Dao-Heuang Group to maximize product distribution when the new plant comes on line.”
The two businesswomen expect to develop a successful venture to promote local products in the Lao market. Under the agreement, Dao-Heuang will continue to process coffee and Miracle will be the sole distributor in the domestic market.
The Dao-Heuang Group encourages local farmers to grow coffee and supply them with coffee beans for processing. Currently there are 40 village groups that grow coffee for the group, but this number is expected to reach 100 by next year, to increase supply.
Currently about 70 percent of the group's coffee is sold in the local market. Dao-Heuang has business partnerships in Asia and Europe, in Belgium, Cambodia, Japan, South Korea, Spain, France, Chinese Taiwan, Thailand, Vietnam, Poland, Germany and Italy.
At present 39 people are members of the Lao Coffee Association, including distributors, processors and exporters. There are still many people in Laos in the coffee business who are not members of the association, an association official said yesterday.
The Dao-Heuang Group was established in 1991 as a small import and export company and duty free shop. It is now one of the largest and most progressive companies in Laos. It employs 425 people and has three branches in Savannakhet, Champassak and Borikhamxay provinces.
The company has coffee plantations on more than 250 hectares in Chansavang village, Pakxong district, Champassak province.
It also plans to list on the Lao Securities Exchange in the near future as that will allow further expansion.
vientiane times
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