Indonesian delegation seeks logistics link opportunities via Laos; big plans in trade for both countries

VIENTIANE, June 24 (Vientiane Times/ANN): Indonesian lecturers and scholars are seeking transport and logistics link opportunities through Laos, which is increasingly becoming a logistics connector for countries in the region.

The Indonesian delegation included senior lecturers and representatives of the Indonesian Resilient Institute of the Republic of Indonesia, the Indonesian National Defence Institute, armed forces and Financial Service Authorities, as well as diplomats at the Indonesian Embassy to Laos.

The group visited the Thanaleng Dry Port and the associated Vientiane Logistics Park in Vientiane on Wednesday to learn about the opportunities offered by these facilities.

Thanks to the Laos-China and Laos-Thailand railways and the dry port where the railways converge, Laos has become an important trade gateway linking China and Southeast Asia, especially in the Mekong sub-region.

From the Lao capital Vientiane, cargo can reach Laem Chabang, Thailand’s main deep seaport about 150km south of Bangkok.

From Bangkok, the trade route connects to the Malaysian capital Kuala Lumpur and onwards to Singapore, Mrs Manila Sanasith, Head of the Investment Promotion Department of Vientiane Logistics Park Co., Ltd., told the Indonesian guests.

To broaden connectivity and opportunities, the developer of the multimodal transport node dry port intends to reach Indonesia in the near future.

Through Laos, countries in Southeast Asia can now access the Chinese market through cost-effective rail services.

From China’s megacity of Chongqing, the rail link, more than 11,000 kilometres long, crosses the border at Alashankou in the Xinjiang Uygur autonomous region, and then passes through Kazakhstan, Russia, Belarus and Poland before reaching Duisburg in Germany.

“From Chongqing to Duisburg, it takes only 14-16 days,” Manila said, adding that the rail option significantly cuts transport time compared to the sea route, which takes about 45 days.

In another direction, the trade route via Laos connects to the Vung Ang seaport in Vietnam’s Ha Tinh province by road.

With the aim of providing more cost-effective transport, a railway is planned to link the dry port to Vung Ang under the packaged Lao Logistics Link (LLL) project, which includes the Vung Ang seaport, the planned railway, and the dry port in Vientiane.

To tap the trade and investment potential brought about by improved connectivity, Vientiane Logistics Park Co., Ltd. is also building a logistics complex where investors can set up operations.

The complex comprises seven zones, including a tank farm, export processing centre, logistics park, free trade zone, technology and halal hub, and administrative and office zone.

Significant investment incentives are being offered, including a corporate tax holiday of 8-16 years and value-added tax reduction, among others. Cheap electricity is another attractive option, Manila said.

Companies that manufacture or assemble goods in Laos enjoy privileged access to major markets in countries whose governments have waived or reduced import tariffs on made-in-Laos products.

More than 30 countries including Australia, Canada, members of the European Union (EU 28), Japan, New Zealand, Norway, Russia, Switzerland and Turkiye have extended such privileges to Laos.

Welcoming the guests, Mr Alounkeo Kittikhoun, President of the Executive Board of Strategy and Planning at PTL Holding Company Limited (PTLH) - the parent company of Vientiane Logistics Park Co., Ltd. - said all foreign ambassadors accredited to Laos have been invited to visit the dry port to learn about opportunities and encourage investment.

Earlier, the Indonesian officials, who are taking part in a Regular Course Programme at the Indonesian National Defence Institute, visited the Ministry of Planning and Investment to learn about Lao investment incentives including tax breaks.

It comes as Laos and Indonesia, which are members of the Association of South-East Asian Nations (Asean), are pushing for economic integration in the region and beyond.

While growing connectivity adds fuel to the government’s efforts to transform landlocked Laos into a land-link country, it bolsters Indonesia’s potential to become an important manufacturing base.

More investors are looking at South-East Asia as an attractive alternative to relocate their manufacturing plants from old locations or set up new ones in Indonesia, Vice President of the Vientiane Logistics Park Co., Ltd., Tee Chee Seng, told an Indonesian business delegation recently. - Vientiane Times/ANN