Thai Medical Glove Co (TMG), a manufacturer of rubber gloves for medical personnel, is forming a joint venture to develop a US$500 million duty-free business in Laos to serve foreign tourists.
New duty-free shops will become a magnet for tourists, especially Chinese shoppers travelling from southern China via the high-speed train system, said Boon Vanasin, founder and chairman of TMG.
TMG is in the process of setting up the joint venture after it recently signed a cooperation agreement with Laos-based Dao-Heuang Group (DHG), which runs 17 duty-free shops in Laos.
TMG is to make a 70% investment in the new firm, with the remainder funded by DHG.
"We plan to spend the $500 million investment budget renovating existing duty-free shops or developing new ones in 2022," said Dr Boon.
In the first phase, TMG and DHG plan to jointly run four duty-free shops: at World Trade Centre, a shopping mall in the Lao capital of Vientiane; in an area near the Thai-Lao Friendship Bridge linking Nong Khai and Vientiane; at a dry port near Tha Na Lang railway station; and in Boten, a town in Luang Namtha province.
According to TMG, the dry port near Tha Na Lang railway station is designed to support logistics and transport businesses in an area covering 1,800 rai.
"These areas are connected with the Thai and Chinese borders, so they have the potential to draw tourists, especially those from China, which is expected to reopen its borders to visitors soon," said Dr Boon.
TMG and DHG plan to develop a duty-free shop in Boten, which is close to Yunnan province in southwestern China, into a large duty-free shop offering products from luxury brands.
Leuang Litdang, president of DHG, said Laos has lots of potential for investment because it borders five countries: China, Myanmar, Thailand, Vietnam and Cambodia.
"DHG has joined hands with TMG because we want to form a strong business partnership to increase competitiveness," she said.
TMG has been granted a concession by the Lao government to run a duty-free business in the country for a 50-year period.
This is the first step in TMG's investment in Laos. In the future, the company plans to invest in the development of three hospitals in Vientiane, Pak Se and an area near the Thai-Lao Friendship Bridge, said Kabil Sompongchiyakul, managing director of KPP Development Co, a TMG consultancy firm.
