Laos is set to emerge as a forest industry nation! Between 2010 and 2012, the SilviCapital team evaluated some 100 possible locations around the world of which 12 were evaluated in depth. Laos was selected as one of the most attractive potential locations to build up a new fiber base and forest industry to supply Thailand, Vietnam, India and China.
Although located in the center of a 400 million-person consumer market, Laos has a very low population density and less than 15% of the land is utilized for productive purposes. The population density is the lowest in Asia at 21 persons per square kilometer (Thailand 130, China 140 and Vietnam 268 people per km2).
Laos is a single-party republic and the economy depends heavily on investment and trade with its neighbors, Thailand, Vietnam, and China. It is one of the fastest growing economies in Asia with a GDP growth of 9% in year 2013. Agriculture still accounts for half of the GDP and 80% of the employment. Laos is a member of ASEAN and in February 2013 it was granted full membership in WTO.
Although land-locked, logistics are relatively efficient through export ports in Thailand and Vietnam. A railway linking Kunming in China with Singapore is being developed and the proposed line will cut strait through the plantation area. When it is completed in 2020, it will offer outstanding possibilities for export to China.
Laos is one of the few remaining countries with potential for developing a major pulp and paper industry. Thanks to the availability of land and the good biological growth conditions in combination with being geographically close to the biggest wood deficit area in the world makes Laos next in line to develop a forest industry. Laos location offers a low production cost for producing fiber and pulp for export to China. Global pulp and paper companies have increasingly identified Laos as an interesting country for forest industry.
The geographical region Burapha operates in contains little unexploded bombs (UXO) which lowers the cost for establishing the plantations. The region is dominated by slightly hilly, degraded forestland, which has been used for shifting cultivation with low productivity for hundreds of years. The selected target region offers rich availability of land, good biological growth conditions, satisfactory logistic and access to relatively skilled labor.