VRG wants to continue expanding its rubber plantation area in Laos

On the morning of February 22, the leaders of the Vietnam Rubber Group (VRG) had a meeting with Mr. Sonexay Siphandone, the Prime Minister of the Lao People's Democratic Republic, during his official visit to Ho Chi Minh City.

During the meeting, Mr. Tran Cong Kha, Chairman of the Board of Directors of VRG, stated that the Group’s investment in rubber cultivation in Laos has yielded many positive results. The Group has set up 6 companies in Laos, spread across five provinces: Champasak, Savanaket, Salavan, Bolykhamxay and Oudomxay.

The total registered foreign investment for VRG's projects in Laos amounts to 254 million USD. As of now, the Group has invested a total of 164 million USD in these projects. The total rubber plantation area in Laos managed by VRG currently spans 26.645 hectares, with 23.239 hectares of that area already being utilized for rubber tapping. Additionally, VRG has invested in three rubber processing plants in Laos, with a total processing capacity of 34.000 tons per year. The total rubber output since the start of the project has reached 344.150 tons.

Since the project commenced, the total revenue generated by VRG from its operations in Laos has reached 555 million USD, while the pre-tax profit accumulated from the project is 75 million USD. The total export value of rubber from these projects has amounted to 547 million USD. Furthermore, the total contributions to the government’s budget, as a result of the project, have totaled 29 million USD, with 5.23 million USD contributed in 2024 alone.

The total workforce employed by VRG in its projects is over 5.500 individuals, with nearly 4.800 of them being Lao nationals. The average income for these workers is around 350 USD per person per month. Many Lao workers have been promoted to hold significant positions within the subsidiaries of the Group.

Throughout its operational period, the companies under VRG have actively contributed to the development of local infrastructure and social welfare in the areas where they operate. These contributions include building roads, constructing schools, setting up health stations, repairing roofs, establishing power lines, drilling wells, and offering assistance to communities affected by natural disasters, with a total amount of 9 million USD dedicated to these initiatives.

These efforts have not only helped improve the living standards of the local population but also played a role in the broader economic and social development of Laos. More importantly, VRG's initiatives have helped shift the local population away from a nomadic lifestyle, encouraging them to settle and embrace a more sustainable way of living, focused on large-scale agricultural production and industrialization.

Additionally, Mr. Tran Cong Kha mentioned that VRG has conducted surveys in several other regions of Laos and identified additional areas with suitable conditions for rubber cultivation. Rubber trees are not only an industrial crop but also an agricultural one, and their cultivation helps in greening barren and deforested lands, contributing to environmental conservation. Looking ahead, VRG also plans to secure carbon certification from its rubber plantations.

As a result, Mr. Tran Cong Kha made a formal request to Prime Minister Sonexay Siphandone, asking for his support for VRG's initiative to continue expanding its rubber plantation area in Laos. This expansion, however, faces challenges due to Prime Minister’s Directive No. 13, issued in 2012.

In response to VRG’s request, Prime Minister Sonexay Siphandone acknowledged the importance of the investment but highlighted that any expansion of rubber cultivation should align with the interests of the Lao people. He suggested that VRG consider implementing collaborative models that would involve the local population, such as land-linking schemes.

Furthermore, Prime Minister Sonexay Siphandone expressed his strong support for VRG’s potential investment in the production of rubber-based industrial products, such as tires. This, he explained, would add significant value through deep processing and also create numerous job opportunities for the Lao people. The Prime Minister also encouraged VRG to explore investments in other sectors, such as industrial parks and energy, in the near future. These initiatives would not only increase the value of VRG as a company but would also contribute to the overall economic development of Laos, particularly by creating more employment opportunities for the local workforce.

In conclusion, Prime Minister Sonexay Siphandone assured VRG that their proposal for expanding the rubber plantation area in Laos, as well as concerns regarding Prime Minister’s Directive No. 13, would be thoroughly reviewed by the relevant ministries and departments. For any additional requests or proposals, the Prime Minister advised VRG to formally submit a letter to the Prime Minister’s Office, so that he could provide further instructions and ensure that the appropriate ministries and departments address and resolve these matters.