Manufacturing

Manufacturing

There is a paucity of any real industry in Laos outside of timber harvesting and electricity generation. Nonetheless, "manufacturing" represents about half of all industrial activity. Other manufacturing activities include the production of agricultural tools, animal feed, bricks, cigarettes, detergents, handicrafts, insecticides, matches, oxygen, plastics, rubber footwear, salt, soft drinks and beer, textiles and clothing, and veterinary products. Manufacturing employed only approximately 2 percent of the labor force in 1991. A few factories in the Vientiane area have been rehabilitated since the mid-1980s. As of 1994, the garment industry was "booming" with investment from China, France, Taiwan, and Thailand; there were more than forty garment factories in the Vientiane area.

The manufacturing subsector was composed of over 600 factories and plants, of which one-third were state-owned in 1991. Most manufacturing is for domestic consumption and is centered in the Vientiane area. As of mid-1994, there was little manufacturing in or near Laotian towns. In 1989 and 1990, there was a rapid increase in cottage industries such as cotton spinning and weaving, traditional village crafts, basket-weaving, and the production of alcoholic beverages. As part of the informal business sector, however, cottage industries are not covered by national statistics.

Between 1980 and 1990, over 80 percent of manufacturing was in the production of clothing, food and beverages, metal products, tobacco products, and wood products. Industrial roundwood production increased 71 percent between 1975- 77 and 1985-87 to an annual average of 330,000 cubic meters and then declined to 309,400 cubic meters in 1990. Sources differ over the growth trend for lumber production; the UN reported a decrease in production of 61 percent between 1980 and 1988, and the Asian Development Bank showed an increase of nearly 400 percent in the same period. Cigarette production rose from 1.10 billion units per year from 1981-84; to 1.12 billion units in 1985 and an estimated 1.20 billion units per year for 1986-90. Statistics over a lengthy period of time for the production of other major goods are not readily available; however, the Asian Development Bank estimated that the value of metal products, food and beverages, and clothing (at 1991 prices) had increased greatly between 1980 and 1990, by 55 percent, 195 percent, and 196 percent, respectively. A general upward trend in the growth of production is borne out by official LPDR statistics from the first half of the decade. The World Bank reported that the manufacturing subsector grew by 35 percent in 1989, slowing to about 4 percent the following year.

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