The investment is mainly in power, mining, transport, services and agriculture-forestry-fishery sectors.According to the Association of Vietnamese Investors in Laos, over the past five years, Vietnam’s registered investment capital in Laos has climbed by 55 per cent, and the number of Vietnamese projects in its western neighbor has also increased by 40 per cent.
Vietnamese enterprises have reaped successes in Laos thanks to sound business opportunities, market scale and operation quality in the neighboring country.
The Unitel network of Star Telecom, a joint venture between Viettel Global and Lao Asia Telecom, significantly contributed to the results by holding 50 percent of the Lao telecommunication market share.
Viettel Global’s Unitel network holds 50 percent of the Lao telecom market share
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Also, Hoang Anh Gia Lai Group has invested in rubber tree and oil palm plantation in Laos. It also put Attapeu airport into operation in 2015 and has splashed out US$80 million on the construction of Nong Khang Airport in Houaphanh province.
Other large-scale projects developed by Vietnamese businesses are Xekaman 1 and 3 hydropower plant projects, power transmission lines from Xekaman to Vietnam’s Pleiku province and a US$522 million potassium chloride salt project.
Vietnam’s biggest investment project in Laos, a $522.46 million project exploiting and processing potassium salt, began construction last year. Invested by Vinachem, the project will use potassium salt as material to produce potassium fertilizer.
The projects have played an important role in the development of both countries. The investments are expected to bring US$350-US$400 million to the Lao budget and create 40,000 jobs.
“Many projects have produced profits, and positively contribute to the two countries’ development, generate employment, and do a very good job in contributing to ensuring the social security of Laos,” said Vietnam’s Party Central Committee’s Commission for External Relations in a document on Vietnam-Laos co-operation.
Previously, agriculture, hydropower plant and telecommunications are typical Vietnamese investments in Laos. However, this is changing as Laos has welcomed an increasing capital amount from Vietnamese companies in hospitality. BIM Group is one example. It opened the first five-star hotel in Laos, the Crowne Plaza Vientiane, in April 2017. The 20,000 square meter hotel has 200 rooms and is located inside the Royal Square building.
Authorities of the two countries are also making efforts to remove obstacles facing inbound Vietnamese investment into Laos to further boost the investment. The Vietnam-Laos 2017 co-operation plan agreement was signed by the two governments recently, which stipulates that the countries will assign ministries to work to remove obstacles facing Vietnamese projects in Laos.
Nguyen Dinh Ba, Minister-Counselor from the Vietnamese Embassy to Laos, said that the Vietnamese and Lao governments are working to analyze obstructions for Vietnam’s investment flows into Laos.
“Vietnam’s investment into Laos is slowing down, after a strong increase in the 2005-2010 period,” Ba said. “One of the key reasons is that many big projects in Laos have already been implemented by Vietnamese firms. Currently there are not many big projects that Vietnamese firms can do in Laos.”
Two-way trade turnover between Vietnam and Laos has been also positive with over US$900 million last year, up 10 percent against 2016. The trade value is expected to hit US$4 billion in 2020.
