Respondent: Essilor Lao Company Limited - Essay Prowess
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Respondent: Essilor Lao Company Limited

Respondent: Essilor Lao Company Limited

  

Interview  Questions

Respondent: Essilor Lao Company Limited

1. Background

a. company information:

Essilor is a French company which produces ophthalmic lenses along with ophthalmic optical equipment. The company is based in Paris, France and operated more than 450 prescription laboratories and production plants across Europe, Asia, Middle East and the Americas. A new factory of Essilor Lao Company Limited produces optical lenses to export to a distribution center in Thailand.

  • How long has your company operated?: Late 2013
  • Country of origin: France
  • Form of company (sole, limited, public): Limited
  • Size of factory: 60,000m2
  • Workforce: 250 people
  • Investment Fund:  USD$ 14 million
  • Group companies:  Essilor International
  • does the  company has its head office or branch in other place?: Europe, Asia, Middle East and the America.

b. Products & Services: what  type  of  products/services, volume/quantity per annum, customer group?

Producing polycarbonate eyeglass lenses and expecting to produce 20 million lenses per year for serving eye care professionals and general consumers.

2. Determinants of FDI

a. There have been said that there are a lot of business opportunities/advantages in Special Economic Zones (SEZ), in general. Do you agree with this statement? (If yes, what business opportunities that you perceive in SEZ?)

This facility is part of the Group’s strategy to leverage its industrial capability to meet the vision needs of people in every region of the world. The Laotian plant will contribute to the Group’s growth by accelerating its mid-tier to meet increasing demand from middle class consumers, especially in emerging markets.

b. What are the unique characteristics of SSSEZ? Why you chose to invest in SSSEZ and not other special zones?

Investment incentives are interesting especially tax exemption. When we come in there are other international companies came in already; therefore, we think it is another opportunity for our business expansion.

c. What are the major advantages of investing in special zones that you see over abroad markets?

We have our standards and already have well established production and operation systems; therefore, going to this market is not so difficult for us.

3. Strategies

a. Pre-investment:

i) What are the main business strategies have you prepared before taking actions?

After several years of intensive studies, setting up of the legal entity, preparing the workforce and management team are the common strategies before taking effort.

ii) What strategy that you think is the best for your company to have a competitive advantage?

We are MNC who have been to several markets with overseas experience, coming in to Laos somehow we use our lesson learnt from other countries operations to apply.

b. Post-investment:

i) How is the result from your prepared strategies?

In general, we have our pattern of operations only some people issues that we need to handle.

ii) Would you apply the same strategies as if you would do in other countries?

Yes.

4. Challenges

a. Pre-investment:

i) What are the common challenges/difficulties have you normally encountered in SSSEZ before investment?

We are concerning about cross-culture communication and vague regulations that effect our activities.

 ii) How do you deal with those challenges/difficulties?

We get helps through local consultations and translators

b. Post-Investment:

i) What are the challenges have you faced after the business begun?

It is difficult to find a capable workforce and there is a high turnover rate.

ii) How do you cope with those challenges?

We use recruitment firms and advertise on medias for recruitment

5. Recommendation

a. What advice would you give foreign investors who wanting to do business in special economic zones? What sort of things should they be considered and prepared?

Prepare your to-do list and apply them accordingly. Also, trying to understand working culture

Thank you!

Interview  Questions

Respondent: JP Investment Company Limited

1. Background

a. Company information:

JP INVESTMENTS., LTD is a leasing company that offers factory space, warehouse space, and office space is currently available for lease. Located close to the entrance of Savan Park, these modern facilities are available now to establish, expand or update your business, with minimal risk.

Company Name:  JP Investment Company Limited

Started operation from:  2011

Country Origin: France

Size of work space: 2,800 m2

Workforce: 20 people

Investment Fund:  USD2mil

Group companies:  N/A

b. Products & Services: what  type  of  products/services, volume/quantity per annum, customer group?

Leasing service included office space, factory space, warehouse space for both short-term and long-term

2. Determinants of FDI

a. There have been said that there are a lot of business opportunities/advantages in Special Economic Zones (SEZ), in general. Do you agree with this statement? (If yes, what business opportunities that you perceive in SEZ?)

Since we have our affiliate: Savan Logistics Company, we also think of leasing out the space. We then decided to sub lease the space to customer with flexible packages to meet their demand.

b. What are the unique characteristics of SSSEZ? Why you chose to invest in SSSEZ and not other special zones?

The location and attract policy are the unique characteristics of SSSEZ that we chose to invest.

c. What are the major advantages of investing in special zones that you see over abroad markets?

The companies that invested in the zone are the target customers and we are able to serve the services for those.

3. Strategies

a. Pre-investment:

i) What are the main business strategies have you prepared before taking actions?

We have done some market research for some times and we see that investors in the zone can be our potential customers and there will be more investors in the future.

ii) What strategy that you think is the best for your company to have a competitive advantage?

We have customers base already, therefore, we provide additional service to them.

b. Post-investment:

i) How is the result from your prepared strategies?

Customers view that to lease the space from us, we can tailor what they want for them and it matches their demand, therefore, we make money quite easy.

ii) Would you apply the same strategies as if you would do in other countries?

We need to understand other countries in other to see opportunities  and meet its needs, different countries have different characteristic. It is possible to approach the same strategies if the countries have the similar demands.

4. Challenges

a. Pre-investment:

i) What are the common challenges/difficulties have you normally encountered in SSSEZ before investment?

Language and legal matters

 ii) How do you deal with those challenges/difficulties?

We use translator and legal advisor

b. Post-Investment:

i) What are the challenges have you faced after the business begun?

The rivalry comes after when they see the opportunities.

ii)  How do you cope with those challenges?

We ensure our contract with customers are solid and we maintain good relationship with customers to keep them even though competitors trying to cut down the price.

5. Recommendation

a. What advice would you give foreign investors who wanting to do business in special economic zones? What sort of things should they be considered and prepared?

Learn about who are your prospect customers and what you will be doing at the zone.

Thank you.

Interview  Questions

Respondent: KOYO LAO CO., LTD.

1. Background

a. Company information:

KOYO LAO CO., LTD is located in Zone B of SSSEZ, which provides a business consulting to support and advice for a company that is working towards developing a new business into the ASEAN countries. The company also provides a leasing service including a plot of land, factory site, warehouse and office space.

  • How long has your company operated?: March 1st, 2014
  • Country of origin: Japan
  • Form of company (sole, limited, public): Limited
  • Workforce: 120 people (Japanese Manager: 4, Thai Leaders: 10, Lao workers: 106) by September 30th.
  • Investment Fund:  1,000,000 USD
  • Group companies:  Headquarters: Japan, Branch office: China, Hong Kong, Taiwan and Thailand.

b. Products & Services: what  type  of  products/services, volume/quantity per annum, customer group?

We are making (Injection and Painting) camera plastic parts (inner parts, outer body parts).   Our main customer is camera manufacturer such as NIKON. It hasn’t passed 1 year since we started production. Our production volume is not concreted yet.

2. Determinants of FDI

a. There have been said that there are a lot of business opportunities/advantages in Special Economic Zones (SEZ),in general. Do you agree with this statement? (If yes, what business opportunities that you perceive in SEZ?)

We agree with it.  Companies in SEZ don’t have to pay corporate tax for 7 – 10 years since they start work. Manufacturing business: 10 years, other business: 7 years.  Income tax of the salary of worker in SEZ is fixed as 5%, even if they are Lao people or foreign people.

b.What are the unique characteristics of SSSEZ? Why you chose to invest inSSSEZ and not other special zones?

We don’t know the unique characteristics of our SEZ, but  SEZ authority always listen empathetically to our voice and give us sincere instruction to solve the problems. 

c. What are the major advantages of investing in special zones that you see over abroad markets?

As we mentioned above, tax exemption is one of the major advantage. At the same time, all of the companies in SEZ are foreign-based companies and they may have the same problems with us. So we can have a sense of camaraderie and exchange opinion or ideas of solution much easier than in our own country.

3. Strategies

a. Pre-investment:

i) What are the main business strategies have you prepared before taking actions?

One of the reasons why we invested here is that our main business partner decided to enter into this area. So we didn’t need to worry about finding a new business chance here.  But our company has an office in Bangkok, Thailand. So we planned to take advantage of this location merit for importing and exporting materials.

ii)  What strategy that you think is the best for your company to have a competitive advantage?

We have to find some new clients in the future to increase the volume of business to be independent the partner company.

b. Post-investment:

i)   How is the result from your prepared strategies?

We made a production factory next to our business partner and doing business 100% for them as we planned originally. However, the market of camera is shrinking year by year. It cannot be said our future outlook is bright if we continue to depending on just one company. So we have to find a new business chance toward the future.

ii) Would you apply the same strategies as if you would do in other countries?

We say “Yes”. When we expand business into new location, we always set up a new office next to or near our business partners. We will continue this strategy in the future as well. But at the same time, we have to be much more independent from giant companies. 

4. Challenges

a. Pre-investment:

i)  What are the common challenges/difficulties have you normally encountered in SSSEZ before investment?

We made a contract with Lao consultant who studied and worked in Japan for more than 20 years. He had a close relationship and strong connection with SEZ Authority, and helped us before a big problem occurred. So we didn’t go through any difficulties in preparation for investment.

ii)  How do you deal with those challenges/difficulties?

Please see above:

b. Post-Investment:

i)  What are the challenges have you faced after the business begun?

Maintaining enough work-force has been a matter of concern. After construction of factory finished, many workers visited our office to take test and interview for joining us. However, most of them had not had any experience in working or just a few experiences such as working somewhere for 1 month, 3 months, 6 months….     Even if we hire 10 workers, 1 or 2 people quit within just 1 week or 10 days, and another 2 or 3, within 1 month.   Out of 10 workers, only 3 or 4 workers remain after 3 months. 

ii) How do you cope with those challenges?

This matter is not a problem just for our company, but other foreign-based factories in SEZ have the same distress. All of the nearby companies said quitting within just 1 -3 months is natural thing for young Lao workers, and they don’t pay much attention on this matter. All they have to do is lower the retirement rate for the workers who have passed 3 months. Finding how to manage it is our big concern, but no one can answer absolute solutions. So, only we can do for it right now is just continuing recruitment as well in the future.

5. Recommendation

a. What advice would you give foreign investors who wanting to do business in special economic zones? What sort of things should they be considered and prepared?

We highly recommend that they should find someone with special knowledge about businesses in SEZ whom they can consult and receive advice from as we did here in Laos. Not only with local people, but some foreign managers in other foreign-based companies in SEZ are also OK to consult, because they must have stepped on the same procedures and faced the similar problem.

Ending.

Interview Questionnaire about SSSEZ

Respondent: KP Beau Lao Co., LTD

  1. Background.
  2. Company information

KP BEAU LAO Co., LTD (KPBL) is a Lao-Japanese joint venture for production of cosmetics, sanitary ware and toys.

  • How long has your company been operated?

         13 December 2012   : Establishment (Registered)

                     17 October 2013       : Opening Ceremony

         24Feburary 2014       : 1st Shipment

  • Country of origin: Japan
  • Form of company (sole, limited, public): Joint Venture Company.
  • Size: Factory Space :  Land space: 10,000 m2, Building:5,000 m2
  • Number of workforce: 70 people (October, 2013), 350 people (as of 14th Aug 2014)
  • Number of foreigners/local:
  • Source of investment fund:

KPBL has registered with total capital of US$ 1,000,000 and three major shareholders consisting of Bureau Co., Ltd.(Japan) with65.00 %, KP Co., Ltd(Lao) with 35.0 % and the remaining 5.00% is owned by KP-Nissei Mizuki (Lao) Company Limited. However, there might be a few changes regarding shareholders after its opening ceremony, waiting for response from Mr. Hoshi Hiroyuki, managing director

  • Main Customers:  BANDAI, JIG, Will Bee, DNP (BANDAI Approved factory) . BANDAI is a well-know company for toy products or as the producer of a large number of plastic model kits. It is the world’s third-largest producer of toys (after Mattel and Hasbro)
  • Does your company have the head office or branch in other place?

Only one branch in Laos (Savannakhet) and the location is as following:  Savan Park SEZA Zone C Lot 423, KM10 Route No9, Savannakhet, LAO P.D.R. TELEPHONE / FAX :  (856-41) 210-034-6,  (856-41) 210-037

  • Products and services
  • What type of products/services that your company provides to the customer?
  • Key Product:  Bath Ball for BANDAI . This bath ball will dissolve when putting it in the water (with pleasant smell) and you can find they toy inside.

 Please watch this video on youtube for more information about the product: http://www.youtube.com/watch?v=6hUedtDtZnY

  • Other products: cosmetics, sanitary ware and toys.
  • Volume/quantity per annum?  n/a (awaiting for response from Mr. hoshi)
  • Who is your customer group?

Small kids or adults who like to collect plastic baby animal figure toys, bath ball toy.

  1. Determinants of FDI
  2. There have been said that there are a lot of business opportunities/advantages in Special Economic Zones (SEZ), in general. Do you agree with this statement?( If yes, please describe business opportunities that you perceive in SEZ?)

Mr. hoshi agreed with that statement and stated that advantage of investing in SSSEZ is as following:

  • No import & export tax including the tax for importing construction materials & Office supplies/ equipments.
  • Profit tax is 8%.
  • Personal income tax is only 5%.
  • Tax holiday is 2 to 10 years.
  • What are the unique characteristic of SSSEZ(Savan Seno Special Economic Zone)? Why did you choose to invest there and not other special zones?

SSSEZ is completely equipped with facilities for providing electricity, water supply, etc. Moreover, the road is in the good condition which is convenient for logistics and so on.

  • What are the major advantages of investing in SEZ that you see over abroad markets?

 KPBL’s factory is a labor intensive industry; therefore cheaper labor cost is very attractive for them.

  1. Strategies
  2. Pre-investment
  3. What are the main businesses strategies have you prepared before taking actions?

       General managerial strategies for Joint venture mode of entry

  • What strategy that you think is the best for your company to have a competitive advantage?

      KPBL also had another factory in China; however, the political relationship between Japan and China is unstable. After careful consideration regarding to that risk, KPBL decided to choose to invest in Laos as the labor cost in Lao is approximately 66.6% cheaper than in China (Lao labor cost is 1/3 of China). In general, Japan companies have been invested around Southeast Asian and hoped to bind the countries closer at once, increasing its dominants 

  • Post-investment
  • How is the result from your prepared strategies?

Even the labor cost in Laos is cheaper than in other countries, transportation cost is quite high and has been increasing recently because all of materials are imported from foreign countries. 

  •  Would you apply the same strategies as if you would do in other countries?

  No more countries.

4. Challenges

 a. Pre-investment

               1. What are the common challenges/difficulties have you normally encountered in SSSEZ before investment?

There were several attempts for KPBL to approach the cultural difference, recruitment and common sense

      2. How did you deal with those challenges/difficulties?

 KPBL is a joint venture with KP group in Lao. Therefore, KP group could provide a lot of support to KPBL.

  b. Post-investment

     1. What are the challenges have you faced after the business begun?

            Even there are always a lot of troubles or obstacles in the manufacturing process, and specially recruitment of skilled labors and employee retention. The low level labors are likely to leave the work during the harvest time. However, KPBL’s key members could deal with or sort out technical problems.

     2. How did you cope with those challenges?

              KPBL’s Key members could deal with or sort out technical problems while KP group could provide a support for general administrative issues.

5. Recommendation

  1. What advice would you give to foreign investors who want to do business in SSSEZ? What sort of things they should be considered and prepared?

It is a quite difficult for KPBL to hire skilled operators in the region due to small number of population in Laos (7 million people). Mr Hoshi recommended that it is suitable for small companies (less than 500 employees) to invest in SSEZ. Moreover, the electricity cost is 50% cheaper than in Thailand, thus it is also suitable for several companies that need to use a lot of electricity for manufacturing.

Thank you.

Interview  Questions

Respondent: Logitem Laos GLKP Company Limited

1. Background

a. Company information

The Logitem Laos GLKP (LLGLKP) company Limited established a hub in 2007 to develop an international cargo transportation system linking Thailand and Laos through the second Mekong Friendship Bridge. The LLGLKP has also served as a relay point of international land freight service connecting Thailand and Vietnam. 

  • How long has your company been operated? The company has been operated since the end of 2007
  • Country Origin: Japan
  • Form of company: Joint venture between KP Group (Lao) and Logitem Thailand
  • Size of company space: N/A
  • Number of Workforce: 20 people
  • Source of investment fund: USD $500k
  • Group company: Logitem group

b. Products & Services: what  type  of  products/services volume/quantity per annum, customer group?

The LLGLKP provides Logistics and Transportation

2. Determinants of FDI

a. There have been said that there are a lot of business opportunities/advantages in Special Economic Zones (SEZ), in general. Do you agree with this statement? (If yes, what business opportunities that you perceive in SEZ?)

We have seen that the demand for cargo transport from mineral and Thai sugar factories located in Savannakhet Province has been increasing remarkably.

Yes, we agree with the statement above, more companies come in to SEZ, they would need logistics services. We find that there are a lot of prospects for us in the zone.

b. What are the unique characteristics of SSSEZ? Why you chose to invest in SSSEZ and not other special zones?

Good location and the developer is able to bring in more than more investors to the zone. Tax exemption is very attractive.

c. What are the major advantages of investing in special zones that you see over abroad markets?

We are lucky that we are Join venture with local firm KP Group, which is one of the largest local distribution companies in Laos. Because KP group has a essential distribution network, equipment and staffs already in place, it helps us establish the connection with customers already and we already got big contract from Nikon.

3. Strategies

a. Pre-investment

i) What are the main business strategies have you prepared before taking actions?

Prepare the workforce, setting up of the legal entity and prepare the management team and work with the local partner.

ii) What strategy that you think is the best for your company to have a competitive advantage?

Using high standard services

b. Post-investment:

i) How is the result from your prepared strategies?

In general, we have our pattern of operations and able to deliver the service as customer expected.

ii) Would you apply the same strategies as if you would do in other countries?

Yes.

4. Challenges

a. Pre-investment:

i) What are the common challenges/difficulties have you normally encountered in SSSEZ before investment?

Some rules and regulations are not clear

ii) How do you deal with those challenges/difficulties?

We have our local partner handle the local authorities matter. This helps us save time a lot and focusing more on the business side.

b. Post-Investment:

i) What are the challenges have you faced after the business begun?

Competition. More competitors in the same industry.

ii) How do you cope with those challenges?

We look for at least 1 year contract with customers; especially Japanese linked customers.

5. Recommendation

a. What advice would you give foreign investors who wanting to do business in special economic zones? What sort of things should they be considered and prepared?

Understand the market, have strong local networks and be flexible with the market conditions.

Ending.

Interview Questions

Respondent: Nikon Lao Company Limited

  1. Background
  2. Company information

Nikon Lao Company limited is a production process manufacture for Nikon’s digital SLR camera. Entry-level and mid-class digital SLR cameras, and some interchangeable lenses are manufactured by Nikon Thailand Co., Ltd and a part of its production for digital SLR cameras which are completed as final products at Nikon Thailand will be finished in Laos.

  • How long has your company been operated? The company has started operation from October 2013
  • Country Origin: Japan
  • Form of company (sole, limited, public): Limited
  • Size: Factory Space: Land space 12,500 m2, floor space: 10,000 m2
  • Number of Workforce: 800 people
  • Number of foreign/local workers:
  • Source of investment fund: Nikon Lao Co., Ltd is a limited company located in KM 28, Savan-Seno Special Economic Zone, Savannakhet Province, Lao P.D.R with a registration capital approximately USD$ 7.5 million owned by Nikon Thailand Co., Ltd (about 99.99%) and other.
  • Main customers: N/A
  • Does your company have the head office or branch in other place?: The company based in Ayutthaya Province, Thailand

b)  Products & Services: what type of products/services volume/quantity per annum, customer group

Assembly a part of the production process for Nikon’s entry – and mid-level DSLRs

2. Determinants of FDI

a)  There have been said that there are a lot of business opportunities/ advantages in Special Economic Zones (SEZ), in general. Do you agree with this statement? (If yes, please what business opportunities that you perceive in SEZ?)

Yes, we do. Apart from our production base in Ayuthaya, Thailand, we think that it is necessary for us to have another production site and we selected Laos after our research of a few years. We think Laos, especially in SEZ provides attractive incentives to the investors and the labor cost is another factor that is attractive for us.

b)  What are the unique characteristics of SSSEZ? Why you chose to invest in SSSEZ and not other special zones?

By investing in the zone, the flexibility of the authority to match with the demand and to support us in our investment activities (Authorities are opened for negotiation) is a great potential. The zone provides a competitive tax exemption to the company.

c)   What are the major advantages of investing in special zones that you see over abroad markets?

Besides tax exemption, the developer of SEZ allows us to select the area of the land to suit our preference. In addition, the developer provides us some the necessary infrastructure which it is needed for plant’s activities. We have hoped to see that country has a possibility to become a transportation hub for our company as the zone located along east-west corridor. we hope to gain some economic benefits after the launch of Asean Economic Community in 2015.   

3. Strategies

a)  Pre-investment:

i)   What are the main businesses strategies have you prepared before taking actions?

  • Research the market for more than 2 years
  • Enquired other Japanese investors in Laos through Japan External Trade Organization (JETRO)
  • Networking with the local authorities

ii)  What strategy that you think is the best for your company to have a competitive advantage?

Our international knowledge and our standardized systems help us go into other countries more productively.

b)  Post-investment:

i)   How is the result from your prepared strategies?

We are able to be on track of the production and the investment in Laos fulfilling the expectation of production expansion for Nikon.

ii) Would you apply the same strategies as if you would do in other countries?

Yes, we apply similar strategies when we do business overseas.

4. Challenges

a)  Pre-investment:

i)  What are the common challenges/difficulties have you normally encountered in SSSEZ before investment?

We have concerned regarding investment law and regulation. The rules are very vague; therefore, the interpretation of the rules and regulations can be ambiguous.

ii)  How do you deal with those challenges/difficulties?

We use services from law firm and consulting firm to help us ensuring the collective investment schemes.

b)  Post-Investment:

i) What are the challenges have you faced after the business begun?

Getting sufficient workforce and to train them up to meet Nikon expectation and standard are necessary and not easy.

ii)  How do you cope with those challenges?

Use recruitment firm under KP Group to help find workforce and asking Nikon Thailand team to come to provide training both technical and soft skills.

4. Recommendation

a)  What advice would you give foreign investors who wanting to do business in special economic zones? What sort of things should they be considered and prepared?

For investors who want to invest in SSSEZ or Lao, You need to set up a team to do the research before you make decision to invest. Also, if you are not sure about certain things, do not hesitate to use consultants to help solve problems. You also need to understand the culture of local authorities; there are things that you might not have concrete formulas to follow. You have to understand the norm and practice over here in order to make you get through.

Thank you!

Interview Questions about SSSEZ

Respondent: Savan Logistics Co., LTD

  1. Background
  2. Company information

Company Name:  Savan Logistics Company Limited is a transportation and logistics company that moves flight including inbound, outbound and drop ship logistics. The company is based in Savan Park.

  • How long has your company been operated? Savan Logistic has started to operate since 2011.
  • Country Origin: France
  • Form of company (sole, limited, public): N/A
  • Size of factory space: 1.2 km2
  • Workforce: 20 people
  • Investment Fund:  the company has registered with investment fund USD$ 200k.
  • Main customers: N/A
  • Group companies:  N/A
  • Does your company have the head office or branch in other place? No
  • Products & Services: what  type  of  products/services, volume/quantity per annum, customer group?

We provide customs clearance service that include: international freight forwarding permits and documentation, international transport of cargo by land, sea or air (include break bulk and oversized freight), container handling (loading and unloading, storage, stuffing and de-stuffing0, hazardous cargo handling (storage, transport and permits) and crane and forklift service (wet or dry hire).

  • Determinants of FDI
  • There have been said that there are a lot of business opportunities/advantages in Special Economic Zones (SEZ) ,in general. Do you agree with this statement? (If yes what business opportunities that you perceive in SEZ?)

Yes, we started having only one contract with MMG Company limited, mining operation in the Savannakhet Province, since 2010 and then decided to have our own office at SEZ in order for us to keep our equipment and vehicles. Later on, we realized that it is because we are located in SEZ, other companies in SEZ also come to use our services and we are able to expand our business.

  • What are the unique characteristics of SSSEZ? Why you chose to invest in SSSEZ and not other special zones?

We enjoy the location and attractive policy provided by the zone that we paid.

  • What are the major advantages of investing in special zones that you see over abroad markets?

We are the first logistic company in the zone and we are able to meet the demands transporting of companies in the zone as well; therefore, you can have them as your friends and your customers.

  • Strategies
  • Pre-investment:
  • What are the main businesses strategies have you prepared before taking actions?

We already have MMG as a main customer to transport their mining; therefore, getting a place at SEZ is suitable for us in terms of location.

  1. What strategy that you think is the best for your company to have a competitive advantage?

As full service logistics provider, we have our knowhow and specific services (less capable competitor)

  • Post-investment:
  • How is the result from your prepared strategies?

Since there is no capable competitor existing in this market, other companies automatically use us for logistics services.

  1. Would you apply the same strategies as if you would do in other countries?

Maybe, but we think opportunities in different countries are not the same. You need to find their demand first.

  • Challenges
  • Pre-investment:
  • What are the common challenges/difficulties have you normally encountered in SSSEZ before investment?

Language different is a common challenge when doing a business abroad in general.

  1. How do you deal with those challenges/difficulties?

We use translator, but sometimes it does not help 100%

  • Post-Investment:
  • What are the challenges have you faced after the business begun?

Competitors came in after they see that we are doing well.

  1. How do you cope with those challenges?

We ensure our contract with customers are solid and we maintain good relationship with customers to keep them even though competitors trying to cut down the price.

  • Recommendation
  • What advice would you give foreign investors who wanting to do business in special economic zones? What sort of things should they be considered and prepared?

Learn about whom your prospect customers are and what you will be doing at the zone.

Ending.

Interview Questions about SSSEZ

Respondent: Savan Pacifica Development Co, Ltd.

  1. Background
  2. Company information

Savan Pacific Development Co., Ltd is a joint venture company between the Lao government and the Malaysia-based contractor Pacifica Streams Development undertaking the responsibility to set up and develop the Savan Park Special Economic Zones. The aim of company to promote new kind of investment as well as attract FDI to special economic zone under the laws enacted for the Special Economic Zone.

  • How long has your company been operated? The company has been operated since February 2008
  • Country origin: Malaysia
  • Form of company (sole, limited, public): Join venture
    • Laotian government 30%
    • Pacific Group Malaysia based 70%
  • Size of work site: development zone 234,422 divided into 4 phases: phase 1, 49.35ha; phase 2, 64.09ha; phase 3, 62.13ha and phase 4, 58.66ha.
  • Number of workforce: 50 employees
  • Source of Investment Fund:  the investment fund is USD$ 20million
  • Main customers: our main target investors are manufacturers such as garments, toys, shoes manufacture and assembly of component parts.
  • Group companies:  Pacifica Group
  • Does your company have the head office or branch in other place? Our company is based in Malaysia
  • Products and service: what type of products/services, volume/quantity per annum customer group?

We are a developer of the SEZ – we basically develop, provide and organize the necessary investment services for whom is investing or have invested in Savan Park SEZ. Recently, we have 33 licensed investors including 11 Laotian companies. However, the majority of our investors are the export-oriented business.

  • Determinants of FDI
  • There have been said that there are a lot of business opportunities/advantages in Special Economic Zones (SEZ), in general. Do you agree with this statement? (If yes, what do business opportunities that you perceive in SEZ?)

Yes, of course. We came to Laos since 2004 and our management got a chance to speak to the high ranking government officers regarding the development of the Special Economic Zone. Therefore, we further conducted the studies in Laos and decided to enter into the development of Savan Park since 2008.

We saw opportunities of special economic zones in other countries and we think that Laos can be developed in a similar manner and this will contribute significantly to the economic development of the country as well.

  • What are the unique characteristics of SSSEZ? Why do you choose to invest in SSSEZ and not other special zones?

The location is strategic. Savannakhet has potentials in terms of geography, people, and border trade and so on. Once the East-West Economic takes shape, we hope to see that the products made from the zone will be transported to Danang in Vietnam and Via Thailand to Mawlamyine port in Myanma.

  • What are the major advantages of investing in special zones that you see over abroad markets?

SEZ is a virgin business for Laos. We are the first mover; therefore, we initiate rules and regulations together with the authorities.

  • Strategies
  • Pre-investment:
  • What are the main businesses strategies have you prepared before taking actions?
  • Research the market for more than 3 years
  • Establish strong local connections for more than 5 years
  • Look for potential investors for more than 2 years
  1. What strategy that you think is the best for your company to have a competitive advantage?

Getting confirmed investors before we came in to invest and we have sufficient funding for the investment.

  • Post-investment:
  • How is the result from your prepared strategies?

We are able attract large investors worldwide especially from Europe and Japan. After these big name companies come in such as Essilor, Toyota and Nikon, other companies also follow them.

  1. Would you apply the same strategies as if you would do in other countries?

Yes we believe so.

  • Challenges
  • Pre-investment
  • What are the common challenges/difficulties have you normally encountered in SSSEZ before investment?

We have learned language and cultural understand is the barrier to us at the first stage.

  1. How do you deal with those challenges/difficulties?

We simply use local translator to help with the language. However, for the culture, you need time to help you understand their lifestyles and you have to learn how to work with them.

  • Post-investment:
  • What are the challenges have you faced after the business begun?

Despite the attractive wage cost in Laos, Laos has a very limited number of skilled workers to supply for our investors into their manufactures.  Finding skilled people to be in the management team is another issue that it is really hard to get local people who can be at the manager level.

  1. How do you cope with those challenges?

We seek help with related authorities and vocational schools. We also advertise through newspaper and try to get referrals from other people when we have any opened position.

  • Recommendation
  • What advice would you give foreign investors who wanting to do business in special economic zones? What sort of things should they be considered and prepared?

You should have your confirmed customers before you start a new investment. You need to ensure that you can manage the situation, especially you need to understand the rules and regulations and if it’s not clear, you need to have back up plan.

Ending

Interview Questions about SSSEZ

Respondent: Toyota Boshoku Lao., Co LTD.,

  1. Background

a. Company information

Toyota Boshoku Lao., Co., Ltd. (TBL) is manufacture for interiors automotive components including seat covers based in Japan. TBL is a part of the Toyota Boshoku group and established in SSSEZ as a supplier to support automobile seat production in Thailand base.

  • How long has your company been operated? The company has established in April 2013
  • Country Origin: Japan
  • Form of company (sole, limited, public): Join venture
  • Size of Factory Space: Site area approx. 80,000m2, building area approx. 7,000m2
  • Number of Workforce: approx. 180 as of starting production  but expecting to grow in line with production
  • Number of foreign/local workers: N/A
  • Source of investment fund: TBL has invested in SSSEZ with capital investment approximately USD$ 5.6 million and ownership consisting of Toyota Boshoku Asia Co., Ltd. 90%, Toyota Tsusho Asia Pacific Pte. Ltd. 7% and Toyota Tsusho Corporation 3%. The TBL is in charged by Mr Shinichi Yamanouchi as a president of Toyota Boshoku Lao Co., Ltd.
  • Main customers: N/A
  • Does your company have the head office or branch in other place?: Thailand

b. Products & Service: what type of products/services, volume/quantity per annum, customer group

Automobile interior components including seat covers in order to support and supply the production in Thailand. TBL is expected to manufacture seat covers for 200,000 units per year.

2. Determinants of FDI

a) There have been said that there are a lot of business opportunities/advantages in Special Economic Zones (SEZ), in general. Do you agree with this statement? (If yes, what business opportunities that you perceive in SEZ?)

Yes, we do. We need to expand our production base and we think Laos is suitable after some of Japanese investors have come to SEZ. We decided to come to SSSEZ as Lao due to similarities of languages and cultures to Thailand.

b) What are the unique characteristics of SSSEZ? Why you choose to invest in SSSEZ and not other special zones

Lao is located along and one of a member nation of the East-West Economic Corridor. it is convenient for us to distribute our products to Thailand.  We also can negotiate the price and able to choose the land area that would be suitable for our production.

c) What are the major advantages of investing in special zones that you see over abroad markets?

The zone offers a very competitive tax exemption. It also provides necessary infrastructures as such stable electricity supply.

3. Strategies

a. Pre-investment:

i) What are the main business strategies have you prepared before taking actions?

We have done market research for more than 3 years before taking actions. Japan External trade Organization (JETRO) have help us regarding foreign direction investment and to enquire other Japanese investors in Laos.  We also network with the local authorities and some business partners in Laos to get some supports.

ii) What strategy that you think is the best for your company to have a competitive advantage?

We have set up international team to help us set up business overseas.

b. Post-investment:

i) How is the result from your prepared strategies?

We are able to be on track of the production and the investment in Laos and we have proper plan for the business operations.

ii) Would you apply the same strategies as if you would do in other countries?

Yes, we apply similar strategies when we do business overseas.

4. Challenges

a. Pre-investment:

i) What are the common challenges/difficulties have you normally encountered in SSSEZ before investment?

The common challenges or difficulties we have faced that the rules are very vague and confusing to understand. As result, the law does not provide adequate notice to business activities that a certain action is required or is not.

 ii) How do you deal with those challenges/difficulties?

We use  consultation service and law firm to avoid any misconception and penalties. We also ask investors who experience in the fields.

b. Post-Investment:

i) What are the challenges have you faced after the business begun?

The major challenges are getting sufficient workforce and capable people is not easy.

ii) How do you cope with those challenges?

We use recruitment firm and use training team from other countries to help.

5. Recommendation

a) What advice would you give foreign investors who wanting to do business in special economic zones? What sort of things should they be considered and prepared?

You need to set up a team to do the research before you make decision to invest. Also, if you are not sure about certain things, do not hesitate to use consultants to help solve problems. You also need to understand the culture of local authorities; there are things that you might not have concrete formulas to follow. You have to understand the norm and practice over here in order to make you get through.

Also, you should consult the developer of the zone to help.

Thank you!

Interview questionnaire about SSSEZ

Respondent: Urai Paint Lao Company Limited

  1. Background
  2. company information

Urai Paint Lao Company (UPL) is a manufacturer and distributor producing a decorative paint that is based on Thailand. UPL is a third paint factory in Lao PDR after the company first established in the capital Vientiane and the second in southern Laos, Champasak province. UPL sells its paint products under the name of U-90 on the domestic market and plans to export the products to Thailand and Vietnam in the next few years.

  • How long has your company been operated?: UPL has been operated since September 2014
  • The country Origin: Thailand
  • Form of company (sole, limited, public): 100: privately owned
  • Size of factory Space: Land space 19,972 m2 comprising of production house, warehouse and administration office.
  • Number of workforce: 150 people
  • Number of foreign/local workers:
  • Source of investment fund: UPL has invested over USD 1.9 million for the new factory plant with registered capital of USD 1.6 million
  • Main customers: construction companies, stores and individuals
  • Does your company have the head office or branch in other place? the company is base in Thailand, and has its branched in Vietnam, Burma and Cambodia.

b. Products & Services: what type of products/services, volume/quantity per annum, customer group

UPL main product is water base paints producing for domestic sales and planning to export to Vietnam and Thailand. The company expects to produce over 70,000 ton in order to meet the high demands of local. 

2. Determinants of FDI

a)  There have been said that there are a lot of business opportunities/ advantages in Special Economic Zones (SEZ) in general. Do you agree with this statement? (If yes, what business opportunities that you perceive in SEZ?)

Yes, we have successfully invested in SEZ in Vietnam, we understand the incentives given to the investors in Laos also. Tax holiday is one of most attractive to investment in SSSEZ

b)  What are the unique characteristics of SSSEZ? Why you chose to invest in SSSEZ and not other special zones?

As mentioned above that investment incentives is one the reasons we chose to invest in SSSEZ. Besides that we fully understand the language and the culture of Laos as we have been done businesses in Lao for many years. Located our new factory plant in SSSEZ will allow us to expand and access to markets easily as the zone situated along the East-West Corridor connecting Thailand and Vietnam.

c)   What are the major advantages of investing in special zones that you see over abroad markets?

We learn that the most essential thing doing business broad is across culture communication. Therefore, doing business here has no communication barriers.

3. Strategies

a)  Pre-investment:

i)   What are the main business strategies have you prepared before taking actions?

We would like to point out that prepare the workforce, setting up of the legal entity and prepare the management team are carefully implemented before taking actions.

ii)  What strategy that you think is the best for your company to have a competitive advantage?

The best strategy for us is to understand the culture and working procedures.

b)  Post-investment:

i)   How is the result from your prepared strategies?

In general, we have our pattern of operations and able to handle the workforce

ii) Would you apply the same strategies as if you would do in other countries?

Yes we would as we have experiences in Thailand, Vietnam, Myanmar, Cambodia and Laos.

4. Challenges

a)  Pre-investment:

i)  What are the common challenges/difficulties have you normally encountered in SSSEZ before investment?

We have encountered that some rules and regulations are not clear

ii)  How do you deal with those challenges/difficulties?

We talk to the local authorities often, trying to get their supports when we have some doubt on the legal matters.

b)  Post-Investment:

i)          What are the challenges have you faced after the business begun?

The main challenges we have faced is quality of workforce and high turnover rate. People still want to cross the border to work in Thailand.

ii)  How do you cope with those challenges?

We advertise and also we set KPIs as a standard for trainings and evaluating performances for employees.

5. Recommendation

a)  What advice would you give foreign investors who wanting to do business in

special economic zones? What sort of things should they be considered and prepared?

We recommend to study, understand the market, have strong local networks and be flexible with the market conditions.

Thank you so much!

  
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