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Laotian organic fertiliser companies look towards AEC

Oct 10. 2014
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By Vientiane Times
Asia News Net

A Laotian organic-fertiliser company, Maliny Agriculture, plans to cooperate with two companies from Malaysia and Thailand on production capacity and marketing improvement ahead of the Asean Economic Community (AEC) at the end of next year.
“We expect to start cooperation on the improvements by next year,” Maliny Group president Phoutsadou Inthavong said recently. “We discussed the cooperation recently. Our cooperation will take about five years. The project will cost about 16 billion kip [Bt64.4 million] and I will be the main shareholder.”
The cooperation is aiming to increase the production capacity and market-management development of the organic-fertiliser firm, hoping to expand its supply coverage further in Laos.
“The development will also help us on supply to a neighbouring country,” he said.
At present the factory’s production capacity is only about 50,000-60,000 tonnes per year, so the cooperation will help upgrade production to larger quantities next year “because the market demand is larger than current capacity”, he said.
Maliny Group invested more than 8.5 billion kip to build the fertiliser factory in Phonhong district of Vientiane and hopes to open further factories in other provinces if demand for its products continues to grow.
Meanwhile, another Laotian organic-fertiliser company, Chanthanom Agricultural Promotion & Import-Export Co, plans to cooperate with a major Thai fertiliser company on production-capacity improvement ahead of the AEC. Chanthanom expects to start capacity improvement by the end of this year, and the two companies will hold shares of about 50 percent each in the joint venture.
Chanthanom has operated an organic-fertiliser factory for 10 years, based in Naxaythong district, Vientiane.
It signed a business cooperation agreement with Thai fertiliser company Pakphoom in June last year after seeing that its production was not meeting quality standards and sales were slumping. It wanted to cooperate with an experienced operator that had more modern production machinery, and it hopes Pakphoom will add more equipment at the existing plant to expand production and ensure higher quality.
If the venture is successful, Chanthanom expects to be able to supply Thailand, and possibly even export to big countries such as China later.
Laos is the first country that Pakphoom, which has a production capacity of 1,500 tonnes per day, has expanded into ahead of the AEC.
The AEC will transform Asean into a region with a free flow of goods, services, investment, skilled labour and capital.
In the AEC Blueprint, the Asean member states have agreed to reduce tariffs, improve frameworks for trade, better enforce compliance with standards and progressively open up national service sectors to cross-border supply and foreign investment.

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