Working towards greater community control over land, forests and natural resources

New factory to put bounce in Luang Namtha rubber production

Vientiane Times, 20 May 2014

Sing district, Luang Namtha province will soon have its second rubber processing factory, after Chinese investor Zinli Company agreed to spend 24 billion kip building a facility with a three hectare land concession. A rubber tree in Luang Namtha province is tapped for latex.

An agreement was signed last week between Director of the provincial Planning and Investment Department Mr Xayphone Khounsiriheuang and the company’s Deputy Director Mr Wang Zinli. The ceremony was attended by the provincial Deputy Governor, Mr Phanthong Phithoumma, along with local authorities and company representatives.

The factory will be the second in the district and seventh in the province, Planning and Investment Department official Mr Bounsana Keovanglath told Vientiane Times. At full capacity, the factory will process 60 tonnes of rubber product every day, which is a higher output than the first factory in the district. The factory will take just one year to construct. It will then go into production, using raw materials from the company’s rubber plantation and local growers in the district.

Increasing the number of rubber processing factories in the province is also good news for local rubber growers, who will have another choice on where to sell. Luang Namtha province earned over US$13 million (105 billion kip) from the export of more than 13,000 tonnes of rubber last year, according to provincial authorities. This revenue contributed to provincial economic development and poverty reduction, accounting for about 6.97 percent of the provincial Gross Domestic Production of 1,500 billion kip.

The province has over 33,000 hectares of rubber plantation under cultivation, of which almost 5,000 hectares are being tapped at any one time with an average production of around 2.1 million tonnes. Better rubber tree varieties have helped improve production and the conditions of farming families who make a living growing the trees.

But Lao growers are currently struggling with declining rubber prices on the global market. There are now almost 300,000 hectares of rubber trees in Laos, of which thousands of hectares are ready to harvest. Most demand for rubber produced in northern Laos comes from China, while demand for southern rubber comes mostly from Vietnam.

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