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A growing number of foreign companies are negotiating with Lao authorities about investing in Savan Park, Savannakhet province's first free trade zone, senior officials said yesterday.
Savan Park is being developed to facilitate foreign investment in Laos.

According to the governor of the Savan-Seno Special Economic Zone authority, Mr Bouakham Sisoulath, several companies come to negotiate on investments in the zone every week.

“Last Saturday, five companies from Japan came to discuss their investments with us,” he said.

“They wanted to set up a bank and build a biodiesel factory. Another wanted to set up a car assembly plant. We explain our policies to them and the benefits they will gain if they invest in the zone.”

According to the authority, the total number of licensed investors in Savan Park is now 16, and seven other companies have expressed a strong interest in investing in the park.

For instance, an investor from Indonesia wants to set up an instant noodle factory. One from Switzerland wants to build a jewellery and watch factory, and another from Holland wants to set up a plant to manufacture Boeing aeroplane parts.

The park, which is being developed by the Malaysian Pacifica Streams Development Company, is now 40 percent complete.

Many hectares of land have been cleared, small roads have built and electricity has been installed.

According to Mr Bouakham, a water supply system should be ready in October which should encourage more foreign business people to invest in the park.

Savannakhet's special economic zone, located along the East-West Economic Corridor, comprises four zones – A, B, C and D – with a total area of almost 700 hectares.

The Lao government gave zone A to a Thai company to develop, but so far this zone has seen no progress as the Thai company has been facing financial difficulties.

The government granted the Pacifica Streams Development Company of Malaysia the green light to develop zone C in an agreement signed in 2008.

Under the agreement, the company will develop infrastructure in the zone, including roads, electricity, water supply, telecommunications, water treatment and liquid management of factory discharge.

The Lao government holds a 30 percent stake in the project while the Malaysian company holds 70 percent.

Director of the Investment Promotion and Legal Affairs Division under the Special Economic Zone authority, Mr Phanomkone Dararassamy said the global financial and economic crisis was affecting investment in the zone.

“If there had been no financial crisis, I think that at least 40 companies would have come to invest in our zone,” he said.

He explained that in 2008, an American company wanted to invest in vehicle recycling in the zone but was unable to follow through with its plans as it was affected by the economic recession.

Most agreed that if the prime ministerial decrees concerning the Savan-Seno Special Economic Zone issued in 2009 were fully enforced, more investors would come to invest in Savan Park.

Mr Bouakham said the decrees stipulate a one-stop service for investment in the park and put the import-export process for companies operating in the zone under the jurisdiction of the Savan-Seno Special Economic Zone authority.

 

 

By Times Reporters
(Latest Update July 20, 2010)