BEIJING, March 10 - Henan Tianguan Group Co. Ltd, China's second largest fuel ethanol producer, plans to build plants in Southeast Asia to produce the renewable fuel and send it to China, company president Zhang Xiaoyang said on Wednesday.

Based in China's central province of Henan, the company has been growing cassava in Laos on 50,000 hectares of farmland, large enough to support annual fuel ethanol production of 300,000 tonnes, Zhang told Reuters.

"We're only sending cassava back to China during the transition period. Next step, we will build a factory in Laos," Zhang said in an interview on the sidelines of the annual parliament meeting in Beijing.

"We are still cultivating the new land... When the area is big enough, we will start building production facilities there," said Zhang.

"The tendency (for Chinese companies) is to build factories in resource-rich countries and it is also the most economical way for industrial development."

Construction could start in two to three years, by which time he expects the Chinese government will be ready to scrap import tax on fuel ethanol, which has been reduced sharply to 5 percent this year from 30 percent last year.

Government subsidies for ethanol production have also fallen by one third, Zhang said, without giving any details.