Vientiane Times, March 19, 2012
Laos will take serious action to reduce the export of unprocessed natural resources as a measure to boost the domestic processing industry. In line with the processing industry and commerce development strategy for 2011-2020, Laos will have to reduce the export of unprocessed natural resources, including unprocessed minerals and timber, so that sufficient raw material is available for the domestic processing industry.
The reduced export volume of natural resources will force foreign investors to move their production bases into Laos, which will help the government to not only create jobs for its people but also add more value to natural resources before they are exported. The establishment of a processing industry in Laos will also stimulate the influx of new technology from abroad, particularly to assist with mining and timber processing, policymakers say.
A number of furniture makers and representatives of the wood processing industry have welcomed the government’s policy to reduce the export of unprocessed natural resources, which they considered a main obstacle to progress. Lao Wooden Products Association President Mr Thongsavanh Souliyamath said the domestic wood processing industry is facing a shortage of timber, and called on the government to stop the export of unprocessed timber and reroute them to domestic firms. He affirmed that the Lao processing industry has the capacity to process timber for large markets, particularly China.
According to the Ministry of Industry and Commerce, there are about 1,000 small and large wood processing plants nationwide, employing more than 20,000 workers. About 100 of these units are members of the Lao Wooden Products Association, which operates under the umbrella of the Lao National Chamber of Commerce and Industry. The chamber has encouraged Lao enterprises, including furniture makers, to attend international exhibitions, particularly in China, in order to find larger markets.
Lao Wooden Furniture Association Vice President Mr Yothin Vetsaphong expressed his satisfaction with the government’s policy, saying the supply of unprocessed timber to domestic firms will boost growth of the Lao furniture making industry. He said a number of foreign companies had wanted to sign purchase agreements with Lao furniture makers, but the local firms were reluctant to do so due to fears over the uncertain supply of wood.
“There is overseas demand for our furniture but we cannot sign purchasing agreements because we don’t know if we will have sufficient raw materials with which to maintain production,” Mr Yothin told Vientiane Times recently, adding that furniture makers face financial penalties under contractual agreements if they don’t deliver on time. According to Mr Yothin, some producers have resorted to obtaining wood from illegal sources. However, they have still been unable to enter into contractual agreements as this supply source is also uncertain.