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Laos and Cambodia are particularly important for Vietnam as they are situated on the East-West corridor that links many ASEAN countries. A Vietnamese saying has it that Far Relatives are not Comparable with Near Neighbours'. Laos and Cambodia are Vietnam's near neighbours, potential markets that can be further developed in the near future. This is why organisers of the initiative entitled "Vietnam's high-quality consumer goods" have chosen the two countries as the first markets in which to set up a marketing fair for 'Made in Vietnam' goods.

VIETNAM-LAOS: FROM THE LAO BAO TRADE ZONE TO NAM LAO

Investment and Trade Fervour at Lao Bao

It takes one and a half hours to travel from the city of Dong Ha in central Vietnam to the area of Lao Bao on the country's western border with Laos.

Situated on 3.5 ha of land in Lao Bao is the Lao Bao Trade Centre, which is part of the Lao Bao Trade Zone in the mountainous Dong Hoa commune. The zone includes the towns of Khe Sanh and Lao Bao, with the National 9 highway passing through the area.

The architecture of the Lao Bao Trade Centre is rather impressive. The 2 million U.S. dollar building erected by the Hanoi Construction Co became operational in May 2003. Following Nguyen Huy, deputy director of the Lao Bao Trade Zone, I called in at the Trade Centre and spoke with vendors there.

A 200-metre-square stall run by the state-owned Quang Tri Trade Co, the first company to set up shop at the Centre, exhibits home appliances, spirits and cosmetics imported from Thailand into Vietnam through the Lao Bao border gate. Shop assistant Phan Thi Thanh Ha said her company sold 20 million dong (1,290 dollars) worth of commodities each day to local people and tourists from Ho Chi Minh City, Hanoi and Danang. According to Nguyen Huy, the Quang Tri Trade Co (QTTC) will invest billions of dong to set up an international transaction centre there.

Besides the QTTC, there are five other state and private companies setting up shop, including the Quang Tri Mountainous Trade Cand Quang Tri Import-Export, along with around 320 individuals and households.

The difference between the Lao Bao Trade Centre (LBTC) and local markets and trade centres is that commodities at the LBTC are duty-free. The price difference between commodities sold at the LBTC and those sold at other places is therefore quite high. A refrigerator at the LBTC costs 500,000 dong less and a box of Thai beers is only 175,000 dong at the LBTC, compared with 240,000 dong at other places. Local merchants said that commodities sold at the Centre are certainly cheaper than those sold in Laos, because they are imported directly from Thailand. Nguyen Huy said not many commodities were smuggled in from Laos, while some "made in Vietnam" commodities like Cotico electric fans had beat "made in Thailand" goods in terms of quality and price.

Besides the trade in goods, the Lao Bao Trade Zone also attracts other types of investment projects - even export processing zones and industrial parks. There are already 40 projects registered, 20 licensed and five operational. Thailand's 2 million dollar factory which produces the "Super Horse" soft drink is one of the most successful projects. Investors are now considering an increase in their investment capital to 2.8 million dollars to produce bottled water. Camel, a private rubber company with investment capital of 4.9 million dollars, has just started production. It turns out 4.5 million motorcycle tyres and 9 million tubes annually. Restaurants and hotels are also slated to open.

Trade and investment seem to flourish here because the Vietnamese government has given a number of incentives to businesses. These include low rental (150,000 dong/sq m/year) and low income tax: fight income tax-free years are granted to FDI investment projects and 4 years to domestic ones. In addition, there is a 50 percent reduction in income tax rates for 9 years after that.

Champasak: The Right Place for Vietnamese Businesses

I left Lao Bao on a truck owned by a company in Ho Chi Minh City which was carrying furniture. You can get an entrance visa to Laos from Vietnam at the Lao Bao border gate for 23 dollars plus a service fee of 10,000 kip (around 15,000 dong). If you live in the region, you need only buy a 2,000 kip pass to enter Laos.

It took the truck five and a half hours to travel from Lao Bao to Champasak. Champasak, one of four provinces in southern Laos, is home to 5,000 Vietnamese families. Arriving at Lankham Hotel, I met Le Duc Toan, a representative for Andira, a Dutch company trading in coffee. Toan said Champasak was Laos' city of coffee, much like Daklak in Vietnam. Fifteen thousand tonnes of coffee are produced yearly in Champasak and "Andira is buying 70 per cent of it". The cross-border links go deeper: With a price list downloaded from the Internet in hand, Toan revealed that he was also an agent for Seamexco, a coffee company from Daklak that also supplies Andira in Vietnam.

In conversations with Toan as well as Dang Le, the vice chairman of the Vietnamese Association in Champasak and Quan Thi Chap, the Vietnamese consul in Champasak, I often heard the names of the Daoheuang Trading Co and Dao Huong mentioned with great admiration. I decided to meet this businesswoman. Fortunately, with the help of the Vietnamese Association, I had the opportunity to talk to Dao Huong at her big and comfortable building, dubbed "The Reunification Palace in Laos" by Vietnamese living in Champasak.

Fifty-five-year old Dao Huong - or Le Thi Luong - was born in Quang Binh Central Province. She started a business in Laos in 1985 selling cakes. Noticing that commodities from Thailand were selling well in Vientiane and Pakse in Lao PDR, she founded an import company in January 1991. The business grew rapidly, and she asked permission to set up duty-free shops in Pakse, Vientiane and Lao Bao. At the Lao Bao border gate, you can easily see a rather big duty-free shop owned by Daoheuang Trading.

Dao Huong did not stop there. She began to widen her business, building markets and investing in plantations.

"People say I am too adventurous. But business already means adventure. But I only invest in adventures that seem sure and certain," said Dao Huong. She starting planting coffee in 1999, but lost nearly 100,000 dollars due to bad weather.

"After failure comes success," she said. She kept on planting. Today, she owns 250 hectares of coffee trees which produce 400 tonnes of coffee beans per year. Not only does Dao Huong sell the beans, she has also invested in a processing factory and exports the products. Dao Huong is now the biggest coffee exporter in Laos -- and she has been elected president of the Laos Coffee Association.

Besides coffee, Dao Huong also plants fruit trees. She has three hectares planted to dragon fruit and 12 hectares to durians, mangosteens, rambutans and longans.

But it was her 16 million dollar investment in the reconstruction of the Pakse market - burnt by a fire in 1998 - that made her famous. The Pakse New Market was opened in 2001 and Dao Huong expects to recover her investment after 20 years, because the rents are very low. The majority of those who rent places at the market are Lao of Vietnamese origin or people from Vietnam. According to an official from the market managing board, the 70-hectare Pakse market is currently the biggest in Indochina.

Besides Daoheuang Trading, other successful Vietnamese businesses in Champasak include the Road 18 Construction Co, the Bac Vinh Wood Co, Binh Nguyen Furniture and the Laos-Vietnam Joint Venture Bank (Champasak branch).

But describing Champasak and the way Vietnamese companies and overseas Vietnamese conduct business there is not enough. Another special and priceless thing should be mentioned: the efforts of Vietnamese families to send their children abroad to get an education. According to Dang Le, Vice Chairman of the Vietnamese Association of Champasak, nearly every family in the province has at least one relative studying abroad.

Hien, owner of the hotel where I stayed, has just seen her son off to the United States. Dao Huong has four children studying in international schools in the United States and Thailand. Even Dang Thi Vay, owner of a modest restaurant in Champasak, has four children studying in Germany and the United States, with two others in Vientiane.

"One of the two is a fourth-year student at the Vientiane College of Medicine," Vay said proudly, her eyes shining with happiness.

NEXT: VIETNAM-CAMBODIA: Shopping at Border Markets