Outspan eyes expansion of coffee plantations

CHAMSSAK, Laos (Vientiane Times/ANN) - Outspan, one of the major world coffee producers and suppliers is planning to expand its coffee plantations in the southern Lao province of Champassak, as the demand for coffee consumption in the world shoots up, according to a company official.

“We have already invested US$30 million in Laos and are now preparing to invest more,” the company’s Corporate Responsibility and Suitability Manager, Mr Karsten Ziebell said on Wednesday.

Mr Ziebell disclosed the latest business plan of the Outspan in Laos to a group of Lao news media representatives who visited one of the company’s Coffee plantations on Bolaven plateau Pakxong district, Champassak province this week.

The new business plan of the Outspan is being developed as the demand of the coffee consumption in the world market is growing about two to three percent a year. The good news is that China and India, the two largest populous nations have emerged as the new coffee consumers, he said.

According to Mr Ziebell, since 2009, Outspan, which is the subsidiary of the Olam International Ltd, has invested US$30 million in the coffee plantation in Bolaven plateau, Pakxong district, Champassak province.

At present, Outspan owns about 2,400 hectares of land on the plateau under a Lao government concession policy, about 1,500 hectares of which has been planted with arabica coffee trees. The total output of the company’s plantation is about 600 tonne a year and is expected reach 3,000 tonne a year in 2021. All of the produced coffee is exported to the world market.

In addition to the coffee plantation, Outspan purchases coffee beans from the local coffee growers and exports them to the world market. In 2017, the company exported about 6,600 tonnes.

To ensure the sustainable business operation of the Outspan, Mr Ziebell said that the joined hands with its business partners to initiate a project, which aimed at providing knowledge on how to improve quality and quantity of the coffee beans on the plateau.

The US$1 million Bolaven Sustainable Coffee programme started in 2016, he said, adding that this five year project was designed to train local coffee growers on how to adopt new and environmentally friendly agricultural techniques so that they can produce better quality coffee beans.

This initiative is considered as a good agribusiness model in Laos as it does not only focus on its business interest but also helps the local community to improve their farming practices.

A coffee grower, Mr Senphet Phanxaysongkham, who benefits from the Outspan’s Bolaven Sustainable Coffee programme said that in the past coffee growers in the plateau used the old coffee plantation techniques, which they inherited from their ancestors. The output of the plantation was at the time around 4 tonne per hectare.

After learning new techniques from Outspan, this coffee grower said that the current output was now about 8 tonne per hectare.

Mr Ziebell said after almost 10 years of business operations in Laos, he said that company was satisfied with the business outcome and was now planning to expand the coffee plantation.

He said that the company had sent a new proposal to the government to approve the additional land concession of 1,500 hectares. This new project requires the investment capital of around US$50 million.

“We are waiting for the government to respond,” Mr Ziebell said, adding that he hopes believes that the government will approve the new investment project in the near future.

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