The South Korean Withus Lao Company signed a concession and investment agreement with the Lao government to construct a road with 29 bridges and a tree plantation in Vientiane province.
The contract is for the implementation of an earlier contract signed in Jan 4, 2006, between the government and the company.
It allows a 30-year concession for 15,000 hectares of land to be cleared and made into eucalyptus plantations. The company will invest US$150 million to build 154.6 km of two-way roads linking Hinheup and Xanakham districts.
This will also include constructing a new ferry port in Vang village and establishing a timber processing factory, which will be consigned to the Lao government after the company has maintained it for 25 years.
The new road from Hinheup to Xanakham will provide the shortest distance land link from Thailand to China, connecting to other highways in northern Laos.
It will be engineered by Koreans to a high standard of durability to allow the transportation of raw materials and heavy goods.
The Vang village ferry port has the prospect of drawing many tourists or trading with Thailand, and can be developed in the future as a border town.
“This eucalyptus plantation business will also involve local people," said the chairman.
He said the company was not only developing the plantations, but would also consider selling some of the eucalyptus saplings to local people to then purchase the mature trees later to help generate more income.
He said the project would stimulate the local economy. The company arrived in Laos in 2002, and after conducting feasibility studies, have committed to a large investment.
According to a press release, they began constructing the road from Hinheup to Xanakham in April. The Korean company stated that they had already done all the survey work and had moved on to the design work.
They will start setting up the plantations next year, employing local people and providing job-training skills for them. This will be a good opportunity for locals to develop advanced skills in this area.
Mr Lee said that after planting eucalyptus saplings, the trees would take seven years to grow, and could then be harvested for export. The company hopes to export over 90 percent of its total harvest of timber to other countries.
This kind of timber can supply pulp to the paper industry, and is presently used to make charcoal.
