Laos: Sea of potential in the ‘sealess land’

Full of advantages for Vietnam to search for opportunities in Laos

Bài liên quan

Laos: A breakthrough in traffic

In December 2021, after 5 years of construction, the 1,035 km-long Laos-China high-speed railway system from Vientiane the capital of Laos to Kunming - the capital of Yunnan province (China) was officially put into operation with 414 km in the territory of Laos. From being a landlocked country located deep in the continent, the transportation of goods is difficult due to expensive costs, now Laos has become an important link connecting transportation, shortening the time and cost of goods transportation. It can be said that Laos has been in the process of a breakthrough in traffic.

The geographical location of Laos is one of the convenient points to bring goods to China. The population of Laos is sparse, but on the contrary, Laos has a huge resource of native agro-products. Laos’ domestic consumption rate is low.

This comes as an opportunity for Vietnam to buy products in Laos and sell them to other countries. The advantage lies in the geographical position between the two countries. The length of the contiguous border is vast, thus means a very good opportunity as Vietnamese businesses can buy Lao goods from the border provinces and bring them back to Vietnam for processing and export.

In the past, Vietnamese agro-products did not go through Laos to China because the road through the Lao border was full of difficulties. It was the same for Thai goods to China as they rarely went through Laos. But it’s different now. It only takes about 7 hours for freight if taking the high-speed railway from Vientiane to Kunming, Yunnan province. Going up to the Boten border gate would only take about 4 hours for the passenger train. This is extremely efficient in terms of saving time and costs.

Time to grasp the moment

According to Nguyen Thi Thanh Thuc, Chairwoman of the Board of Directors of AutoAgri Software Technology JSC, the railway only exploits about 30% of its transport capacity at the moment. And in many areas such as the center of the railway stations, the border gate or the center of the capital Vientiane, the Lao government itself has formed clear planning for cities, logistics, and the center of duty-free zones. AutoAgri is also researching and consulting for a number of logistics projects in Laos, which we see very potential.

“However, in the recent period, the first is due to the fact that China has not yet opened due to Covid, and the second is world financial fluctuations, investors who planned to enter Laos two years ago are slowing down. I think this is a great opportunity for Vietnamese businesses because the component projects in the logistics chain and tourism projects in Laos are abundant and very specific.

“But if we do not take advantage of this moment, if China reopens and the world's finances become more stable and overcome this crisis, it is likely that there will not be many opportunities for Vietnamese businesses. The reason is that although we are close and the friendship between our two countries has a long and important history, our finances may not be as strong as other countries. That's one thing we have to consider. Vietnamese businesses should soon pay attention if they want to find opportunities in Laos,” said Nguyen Thi Thanh Thuc.

When it comes to logistics, so far businesses have commonly thought of it in terms of transpoting goods, but the AutoAgri chairwoman think that logistics, ie transportation in the field of tourism, is also a huge opportunity. If Vietnam has centers in Laos to catch up with such tourism trends, Vietnamese businesses will be able to see a great chance in development and bond between the two countries. And especially, if the road or high-speed railway connects Vientiane with Central Vietnam, this would create a breakthrough.

At present, if the railway from Laos to China is as it is, enterprises from Vietnam may have an opportunity to participate in exploiting that transport system. They can participate in bidding with Lao enterprises, or become their first-class agent. It would also be a huge opportunity because if going by road, a freight car from Vientiane to the Chinese border gate can cost up to VND 150 million, but if going by rail, the cost is possibly equal to only 3% of that amount.