Lao Economy

Labour Shortage Impedes Industry Development

The shortage of labour in Laos is still a major issue for foreign investors, which means industry development is struggling but some companies have taken the decision to expand their business here.

The Vientiane Industry and Trade Area (VITA) in Xaythany district is one of the major industrial parks in Vientiane requiring more workers for the factories in the area.

There are currently 11 foreign companies who have invested in the park, of which two factories are processing products for export, VITA Park President Mr Sibounheuang Vienheuangphay told Vientiane Times last week.

One of the electronic equipment factories and one of the garment factories, which need around 1,600 workers to keep production running optimally have only just over 600 Lao and 14 foreign labour ers working there, he said.

Most of the workers in the area come from the nearest ten villages around the park so an investor is building a dormitory where workers living too far away to commute or coming from other provinces can stay so that they c an get work in the industrial park, said Mr Sibounheuang.

Village population statistics show that there are around 4,000 potential labourers available from these ten nearby villages, but not all of them are suitable, he reported.

To get more people from these villages that are able to work in the park, the factories are cooperating closely with village authorities to encourage any villagers between 18 and 30 years old to come to work there.

However, most of the Lao workers who are available to the factories in the area have not yet adapted to the newer industrial processing models so the factory investors are having to spend extra time and money on training and skill development.

The garment factory of Mascot International Sold Co Ltd, a Danish investment in the industrial park, has not yet begun its processing operations to produce goods for export despite opening in January, because of the labour shortage, company Office Manager Ms Latdavanh Silaphet said during a visit from the Vientiane Times .

The factory needs around 800 labourers to operate at current capacity to meet demand but there are only 60 employees at the moment, she said.

Many people here lack an understanding of the needs an efficient, large output production line has because the only work they have ever done is basic crafts and other things in their home towns.

She gave as an example a comparison with the situation in Vietnam. When a factory in that country prepares to open its doors there is a long queue of people waiting to apply to work there as soon as applications can be accepted, while in Laos the companies have to work with village authorities to encourage people to come to wor k for them.

Workers in the factories in this industrial park receive a basic salary of about US$105 and are provided with free transport, lunch and health insurance.

The park has space for around 60 factories in an area of 110 hectares and is expected to provide employment for more than 12,000 workers.

Source: Vientiane Times