CEO of Petroleum Trading Lao Public Company (PTL), one of the country's leading private petroleum retail and supply firms, Mr Chanthone Sitthixay said recently that around 35 percent of business costs are related to logistics.
"When compared to our neighbouring Thailand and Vietnam, we spend much more on logistics for export of goods, and the rest of Asean spends lower amounts per head," he said.
He said that the establishment of the joint venture Vung Ang Seaport Development Company Limited between PTL and the Lao Logistics State Enterprise (LLSE) will contribute to support the export of industrial and agricultural goods.
The Vung Ang Seaport site is located in Vietnam's central Ha Tinh province, about 200 km from Thakhaek district of Khammuan province.
Development at the seaport site is expected to begin next year as soon as the legal process is completed, he said.
According to Mr Chanthone, the development of this seaport will enable movement of over 12 million tonnes of containers and other imported and exported goods anually.
"This will be a park for handling and transfer of import and export goods between Laos and other countries," he said, noting that the benefits of logistics and services will be on the rise.
The newly-established company has set a plan for spending over US$280 million for the development project over two phases at the Vung Ang seaport.
"We hope that the development of this seaport will be as a special economic zone where it can also be a duty free or a non-tariff area," Mr Chanthone said.
The project will also pave the way for smoother exports of domestic goods and import of products by strengthening links between landlocked Laos and global shipping networks.
The move of investment in seaport development is likely to open windows for foreign investors as well as rolling out the welcome mat for foreign traders.
The governments of Laos and Vietnam have also been cooperating in the development of this seaport.
Investors from Vietnam hold an 80 percent share and the remainder is held by those from Laos.
Progress in development has been mild due to many factors, prompting PTL and LLSE forming a joint venture company to work with stakeholders to carry on with necessary work to progress the development project.