We have one advantage that even money can’t buy…

A wide-ranging interview with
Varong Tangpraprutgul,
Managing Director of Amata City Lao Co.

Varong Tangpraprutgul
Managing Director of Amata City Lao Co.

Varong Tangpraprutgul’s family history reflects the extraordinary transformation taking place in Laos, where Amata Corp’s new Smart and Eco City Namor will soon open beside the game-changing high-speed rail line that connects ASEAN with China.

A Thai with a bachelor degree in civil engineering from Bangkok’s Thammasat University and a masters in business management from Britain’s University of Warwick, Varong, 42, is deeply connected to Laos through a Lao-born grandmother and Chinese-born grandfather who settled in Vientiane, the country’s capital, last century.

With a tiny population and no coastline, Laos in those days was an economic backwater. Worse, it would be drawn into Indochina’s wars, prompting many of Varong’s family members to emigrate.

But from his home in Bangkok, Varong maintained the Lao connection, frequently visiting relatives who had stayed behind. Now, thanks to the three-year-old train line connecting Vientiane on the Lao-Thailand border with Kunming, capital of China’s Yunnan Province, Laos has gone from being a landlocked nation to a land-linked one.

And when Amata won approval to develop Smart and Eco City Namor directly beside the rail line in northern Oudomxay Province, Varong’s professional qualifications and deep knowledge of Laos led to his appointment to lead the multinational, multi-lingual Amata City Lao Co. team.

In an interview, Varong explained how, in this once-remote, underpopulated location 390km north of Vientiane, Amata aims to attract foreign direct investors from around the world and replicate the success of the company’s existing smart cities and industrial parks in Thailand and Vietnam.

Some extracts from our discussion:

  • Q:

    Tell us about Amata Smart and Eco City Namor and how you came to be involved.

  • A:
    The chairman, Mr Vikrom Kromadit, knew I was part-Lao and when we did the first site analysis in 2013, he took me with him. Back then, the railway was just a plan and not many people believed it would happen. But after 2015, when they started actually building the line, the Chairman and I went back in a helicopter. We could see the extent of the construction work with our own eyes. It was even ahead of schedule.
  • Q:

    What happened then?

  • A:
    In 2017, we put in the application and six months later the Lao government agreed an MOU. In 2021 the railway opened. In 2022, we signed the concession agreement and work began. By the end of this year, our customers’ first factories will open.
  • Q:

    Tell us about your team?

  • A:

    A: My senior deputy, Mr Hiroyuki Watabe, is Japanese. His experience includes setting up companies overseas for Sumitomo. My other deputy, Mr Oukeo Sichaleune, is Lao. He was a government official who won a scholarship to study engineering in Japan. We like to work to Japanese standards in Laos. We also have Chinese executives and, going forward, we are looking to recruit an even more international and multitalented team. This multi-national team approach has worked successfully at our flagship developments in Thailand and helps us to truly understand our investors.

  • Q:

    How easy is it for your customers to inspect the site before they invest?

  • A:
    A: You can leave Bangkok at 8am and be there in time for lunch by flying to Luang Prabang and then taking the train. We will be arranging site visits very soon.
  • Q:

    Namor city has only 20,000 people. Why did you choose that location?

  • A:

    After the railway, which solved logistical concerns, the location was next most important. We always believed in Laos and chose a site close to China because we wanted to utilize resources from China and also thought some Chinese companies would like to open factories there. So this was quite obviously the best location. We have 9,600 hectares right next to Namor station, just two stops and 40km from the border. It’s a green area, flat land with good food, plenty of water and a perfect climate. And it has also turned out to be a perfect alternative location for companies seeking to avoid the trade war.

  • Q:

    What else made you so confident to develop a smart eco city here?

  • A:
    We have one thing that even money can’t buy and that is green energy. In Laos, 90 percent of the energy supply is hydropower. It’s very clean and cheap and there’s plenty of it for the next generation of factories. Also we have a high voltage transmission line to China for additional reliability.
  • Q:

    What about the local Lao people?

  • A:
    They are really straightforward, transparent and kind. They are willing to change jobs from farmers to factory workers. We see opportunity based on the people here.
  • Q:

    And the government?

  • A:
    The Lao government is very supportive. They welcome investors, especially good investors like Amata. They can’t support us in terms of money, but they do so in terms of incentives and privileges that will help our customers invest in Laos. It’s a similar model to the one adopted by China in the old days and Vietnam. Another example is Dubai, which set out to attract foreign investors by establishing one free trade zone in 1985 and now operates more than 20 of them.
  • Q:

    Tell us about those incentives for investors

  • A:
    We have Special Economic Zone status and the most important benefit is 30 years exemption on profits tax -- one of the best in the region. Personal income tax is 5 percent. Construction of factories that export all their production is exempt from VAT and receives 50 percent VAT reduction for electricity and water use in production. Investors can also benefit from long-term leases of up to 50 years.
  • Q:

    Where will your investors come from and what sort of industries do you aim to attract?

  • A:
    We welcome investors from around the world, but because of our location it will probably at first mostly be Chinese, including those already operating factories in Thailand. We are planning four or five specific clusters -- renewable energy such as solar panels, automotive related industries, high-tech electronics and agricultural processing. Data centers have big potential. There are natural resources here, but no-one has yet added value. We are going to build manufacturing and clean industry for them. The Chairman’s long term vision is that there will be a big new sustainable city here. As well as benefiting our investors, he also sees it as our duty to help Laos develop – our all-win philosophy.
  • Q:

    Since the railway opened, what has changed?

  • A:
    So much. In the north of Laos before the line opened, to travel 200 kms could take you half a day. Right now, with the train shortening the route, the same journey can just take less than 2 hours. Very soon there will also be expressways to Thailand via the fourth Thailand-Lao Friendship Bridge over the Mekong River and China via the border gate at Boten. But in terms of the environment and the culture, nothing has changed. It’s still green and the people are so kind.

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