US Firms See Huge Opportunities For Business In Laos
Source: Vientiane Times
US Secretary of Commerce Wilbur Ross says Laos presents a significant opportunity for US companies in the energy and infrastructure sectors.
Mr Ross made the comment during an official one-day visit to Vientiane on Friday, believed to be the first visit ever to Laos by a US commerce secretary.
The visit is seen as a landmark event and should help to strengthen economic and commercial ties between the two nations. Mr Ross said American firms are now eager to do business in Laos.
“US businesses produce world-class products and services and they are eager to contribute to this country’s development and to its goal of becoming the battery of Southeast Asia,” he said.
Also on Friday, the US Secretary of Commerce and senior Lao government officials witnessed the signing of an agreement between Convalt Energy and General Electric (NYSE:GE) to develop solar power projects worth US$400 million in Borikhamxay and Attapeu provinces with a total capacity of 300MW.
If completed, the two solar plants (50MW in Borikhamxay and 250MW in Attapeu) would constitute the largest investment in Laos by American companies.
Chief Country Representative of GE Laos, Mr Sinnasone Boulom, told Vientiane Times on Friday “We are going to develop a solar project in the two provinces of Attapeu and Borikhamxay.”
“We are interested in these provinces because we have made some measurements of radiation from the sun. These are the provinces where the sun has the greatest radiation in Laos.”
Mr Sinnasone said his company is working with their partner (Convalt Energy) which specialises in solar plants. Convalt is an independent renewable power production company, wholly owned by the New York-based investment firm ACO Investment Group.
Mr Sinnasone said Convalt will manage the project and is bringing in partners and banks to finance the initiative.
Meanwhile GE will supply electrical equipment including inverters, switchgear and electrical equipment for power transmission and substations.
“We are doing solar plants all over the world. We are doing the same type of project in Myanmar. There is a lot of potential and opportunity in Laos particularly in sectors related to energy. We want to work with Lao companies to develop a coal powered plant and a gas powered plant. We want to be part of the strategic backbone for the national grid,” Mr Sinnasone said.
Economists say foreign companies are interested in investing in Laos because the country is centrally located in the region and is part of the Asean Economic Community which has a market of over 600 million people. This means they are keen to locate factories in Laos from where they can export to the rest of the region.
For instance, Coca-Cola, which set up in business in Laos some years ago, is not only producing beverages for local consumption but also for sale to Thailand and other countries.
The Asean bloc represents the US’s fourth largest partner in merchandise trade.
Total United States investment in Asean is more than the combined US investment in China and India, and in 2014 reached US$13 billion or 10 percent of Asean’s total foreign direct investment.