KUALA LUMPUR (Aug 3): The Ministry of International Trade and Industry (MITI) said Malaysian companies need to expand their presence in Laos to take advantage of the huge potential in the country.

“Malaysian companies have been playing an important role in the economic and social development of Laos,” its minister Datuk Seri Mustapa Mohamed said in a media release today.

This year, Laos or Lao People’s Democratic Republic (Lao PDR), assumes chairmanship of ASEAN. Since joining ASEAN, the country has introduced various economic reform measures aimed at attracting foreign direct investments, said Mustapa.

And its economy has been growing at an impressive rate of 7% per annum. Malaysia’s trade with Laos, though relatively small, has been on an upward trend, added Mustapa.

“Our trade has expanded from US$2.4 million in 2003 to US$17.7 million in 2015. Meanwhile, our investment in Laos has also grown steadily since 2010. To date, Malaysia's investment in Laos was recorded at US$430.2 million, making us the 6th largest foreign investor in the country,” he said.

To date, there are about 20 Malaysian companies which are actively operating in the country, in key areas such as hydropower, mining, development of specific economic zones, and infrastructure projects, especially railway, he shared.

As example, he cited Giant Consolidated Ltd, a Malaysian railway construction company that is actively involved in Laos.

The company, said Mustapa, has been awarded the contract to build the 220-kilometer Savannakhet-Lao Bao railway, linking the country's western borders to Thailand and Vietnam.

The construction cost is estimated at US$1.3 billion, while another US$4.5 billion is expected to be spent on the development of train stations and related developments in 11 cities along the route.

The project is expected to commence, once the route alignment has been finalised by the Laos government.

Meanwhile, Mustapa noted that the Malaysia Business Council in Laos has, during his meeting with them on Tuesday (Aug 2), urged the Malaysian government to consider having a stronger economic representation in Laos to facilitate Malaysian companies in dealing with the Laos government and other stakeholders.

“At present, MITI through its overseas office in Hanoi and MATRADE’s regional office in Ho Chi Minh, are continuing to assist Malaysian companies which are investing in Lao PDR. The Malaysian Embassy in Vientiane is now focusing more and more on economic and commercial matters,” he said.