Local coffee trader Dao-Heuang Group will no longer have to ship coffee beans overseas to produce its instant coffee, after investing US $50 million in its own processing plant.
The company currently ships Lao coffee beans to be processed in Indonesia, creating an expensive middleman in the operation.
But the group began construction of its own instant coffee processing plant last Friday in Bachiengchaleunsouk district, Champassak province, in the south of Laos.
Group President Mrs Leuang Litdang told the Vientiane Times yesterday the company decided to make the investment because it saw a stronger demand for Lao instant coffee products in both domestic and overseas markets.
Mrs Leuang said the capacity of the factory is 3,000 tonnes of instant coffee per year. Most of that will be exported to other countries in Asia including Thailand, Vietnam, Japan, Malaysia and Singapore.
Buyers in Europe have also reportedly contacted the company and are interested in purchasing the product, with only 5 to 10 percent of the factory's total output expected to remain in Laos for local sale.
Production will begin once the plant is completed in November next year. It is expected the factory will provide employment for local labourers and generate steady revenue for farmers and the government.
The company will use modern technologies from Germany and Denmark for production.
The government approved the construction of the plant in October last year.
Champassak province authorities approved a land concession of 250 hectares for the company to grow coffee on Phouphieng Bolaven plateau, in Pakxong district. Each year the Dao-Heuang Group produces 3,500 to 4000 tonnes of raw coffee beans.
Speaking at a ceremony to launch the construction project, Champassak province Governor Mr Sonexay Siphandone said the processing plant would boost the province's economy and add value to the Lao coffee product.
He expressed his appreciation to the Dao-Heuang Group, which remains a leading business model in Laos.
A ceremony to launch the construction project in Champassak province was attended by former Lao President Mr Khamtay Siphandone and Standing Deputy Prime Minister Somsavat Lengsavad. High ranking officials from the province and company staff also attended the ceremony.
