Lianhe Zaobao: China-Laos railway boosts business opportunities in Laos

The China-Laos railway project, a high-speed rail link between Kunming, China and Vientiane, Laos, due to be completed next year, will drive commercial investment in Laos, making it the most promising growth market in ASEAN.

Paul Lim (Bottom Left: Fidelium Group Executive Chairman), Lee Seng Shoy (Middle Left: Hong Guan Managing Director), Roy Phang (Top Left: Fidelium Group Operations Manager) Yommana S. (Bottom Right: Fidelium Group Country Manager), Imran Rahman (Middle Right: Gush Head of Sales),Lester Leong (Top Right: Gush Founder)


Laos has enjoyed rapid economic growth over the past two years, and will continue to prosper even more once the construction of China-Laos railway linking Vientiane, the capital of Laos, with Kunming in China is completed in 2021. The project has attracted significant buzz, with foreign direct investments (FDI) reaching a high of US$1.6bil (S$2.2bil) in 2017. This is an increase of 60 percent from 2016.

With a population of 7 million, Laos is the only landlocked country in ASEAN. It is surrounded by China, Vietnam, Cambodia, Thailand and Myanmar with the Mekong river flowing through it. Geographical limitation has hindered its logistics trade industry and was causing a lag in economic development.

In 2016, the construction of China's first high-speed rail project to ASEAN - the China-Laos terminal railway, was officially launched. This is an important part of the "One Belt And One Road" initiative and is expected to be completed in 2021. Once completed, it will not only spur commercial investment in Laos, but also turn the country from a landlocked country to a "land-linked country" - an essential hub for markets such as Thailand, Vietnam and China.

To help companies break into new markets, the government has announced in this year’s Singapore Budget that the Market Readiness Grant (MRA) will increase from S$2Mr Lim set up Fidelium Group in 2016 to focus on investments and projects in the Greater Mekong region, with a special focus on Laos.

Paul Lim at Vientiane, Laos

Fidelium Group is an investment and management consulting company that provides bespoke services to help Singapore-based companies accelerate business expansion into emerging markets such as Laos, Vietnam and Cambodia. This is done by conducting business matching services with their strong network of partners in the region.

Mr Lim was a recipient of the prestigious Singapore Police Force (SPF) Overseas Scholarship and previously served as the Commander of Tanglin Police Division. In 2010, he took over Soverus Pte Ltd, a dying security company void of any employees. Within six years, Mr Lim grew the company from a one-man-operation to become the first security company to be publicly listed on the Singapore Exchange (SGX) Catalist Board in January 2016, under his holding company Secura Group Ltd, with 1,000 employees in 16 companies spanning 6 countries.

"Instead of being a small fish in a big pond, I prefer to be a big fish in a small but fast-growing pond", Mr Lim said.

Mr Lim has taken advantage of the opportunity in Laos and successfully brought several local brands, including Bee Sim Pau, into their market. At present, Bee Sim Pau’s products are sold in supermarkets there. Mr Lim has also arranged for another local brand – See Hai Tat (Three Star Brand) to discuss potential collaboration with partner enterprises in Laos. Several other home-grown brands including advance-chemical company Gush!, fishing equipment brand Pioneer Tackle and ICT life-cycle management company Rentalworks

are also in the process of expanding their businesses there.

“This is a good time to enter the Lao market because although it is building a lot of infrastructure, not many foreign companies are coming here and there are still many opportunities to explore,” said Mr Lim. “I do not wish to miss the boat."

Mr Jason Lim, the President of the Singapore Business Association Laos noted that Laos is still in its infancy. He said that the opening of the China-Laos railway will bring significant benefits to the region. Currently, there are more than 100 businesses from Singapore in Laos, mainly in trade, real estate, tourism and professional services.

Mr Darren Lee, Enterprise Singapore regional director for Myanmar, Thailand, Cambodia and Laos, explained that the Lao government is diversifying the economy away from its heavily focused natural resources sector. “Singapore consumer goods and educational firms are expected to find business opportunities in Laos,” he said.

0,000 to S$100,000 per new market over three years. Funding for the program has also been expanded to include advice on free trade agreements and assistance for business development. For more information, check out enterprisesg.gov.sg/campaigns/budget-2020.