Vietnamese Companies Invest Over 5 Billion USD in Laos
Vietnamese businesses have found much success in Laos primarily due to excellent commercial opportunities, market scale and operation quality in the landlocked nation. According to the Ministry of Planning and Investment, Laos has licensed 423 Vietnamese projects worth more than USD $5 billion, namely in hydropower, mining, transport, industrial tree plantations and services.
Viettel Global Investment JSC, a subsidiary of the military-run telecom Viettel Group, posted earnings of USD $571.9 million in the first nine months of 2017, a 19% increase from the same period last year. The Unitel telecom brand of Star Telecom, a joint venture between Viettel Global and Lao Asia Telecom, significantly contributed to the results by holding 50% of the telecom market share in Laos. Unitel has 2.8 million subscribers and is aiming for a 10% growth in revenue to USD $175 million by the end of 2017.
Another notable company is Hoang Anh Gia Lai (HAGL). HAGL has invested in rubber tree and oil palm plantations in Laos. It also helped launch Attapeu airport (now defunct) in 2015 and has invested USD $80 million on the construction of Nong Khang Airport in Houaphanh.
Other large-scale projects developed by Vietnamese businesses are Xekaman 1 and Xekaman 3 hydropower projects, power transmission lines from Xekaman to Vietnam’s Pleiku province and a USD$ 522 million potassium chloride salt project.
The projects have played an important role in the development of both countries. The investments are expected to bring USD $350-400 million to the Lao state budget and create approximately 40,000 jobs.
Agriculture, hydropower plant and telecommunications have been typical Vietnamese investments in Laos. However, this is changing. Laos has welcomed an increasing capital amount from Vietnamese companies in hospitality.
BIM Group is one example. It opened the Crowne Plaza Vientiane in April 2017. The 20,000 square metre hotel has 200 rooms.
The visit to Vietnam made by General Secretary of the Lao People’s Revolutionary Party and President of Laos Bounnhang Vorachith from December 19-21 gave even more momentum for Laos-Vietnam ties in both diplomatic and economic affairs, opening new opportunities for Vietnamese investment in the Lao market.