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Left to right: Ari Freese, Nousavanh Khoun-meuang, Roman Lai. Photo credit: Thomas Schmid
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Ari Freese is proud of Bro Asia Lao’s electric curing ovens. Photo credit: Thomas Schmid
Laos, officially the “Lao Peoples’ Democratic Republic.” consistently counts among the 10 poorest countries in the world. Its economy is predominantly agriculture-based. Despite being roughly the size of Italy, the country has a tiny population of just under 8 million and is Southeast Asia’s only land-locked nation. Though it is largely mountainous, Laos does also have ample fertile plains and river valleys where farming flourishes in a mild, subtropical climate. Although the locals grew tobacco on a small scale and for home use for centuries, commercial tobacco cultivation never really took off. However, in recent years there have been numerous instances where Chinese entrepreneurs seasonally leased large swathes of land for tobacco planting, but only to ship back the harvest to China as soon as it was in. The country’s economy benefitted preciously little from that practice. Newly-established Bro Asia Lao Co. Ltd. intends to rectify this situation in an effort to put the obscure Southeast Asian country on the international tobacco radar at last.
The first of its kind in Laos
Bro Asia Lao was incorporated only in October 2023, planting its inaugural crop in November of that year. Co-founded by local businesswoman Nousavanh Khounmeuang and a group of Malaysian and Singaporean investors, the outfit is the very first commercial tobacco growing enterprise of its kind in the country, being officially registered with and supported by the government. Though Miss Nousavanh cautioned that the operation was still “in the experimental and testing phase as far as yields and crop quality are concerned,” the two crops that have been brought in so far “looked very promising.” This was confirmed by Bro Asia’s leaf manager Ari Freese, a native of Brazil’s tobacco growing hub of Rio Grande do Sul. He told Tobacco Asia that he was indeed pleasantly surprised with the inaugural crops. “We had expected less than we actually ended up with. We got very good curing quality of cigarette-grade leaf,” he said, claiming that customer feedback even had likened the Laos leaf to that of Brazil and Zimbabwe, “especially with regards to flavor and grain.”
Brazilian seeds bring surprising yields
Bro Asia presently only produces FCV, all of it exclusively grown from imported Brazilian seeds. Harvest yields hover between 1.2-1.5 tons of green leaf per hectare, according to Freese. “We found that truly remarkable because even in Brazil we are only reaching an average of around 2 tons per hectare,” he said. “Of course we are hoping to challenge that in future seasons.” Due to time and logistics pressure, Bro Asia only planted one Brazilian seed variety during its first two seasons. However, Freese stands firm that he is going to try three varieties next. “That way we also can test out which of the varieties offer the best yield versus quality ratio,” he reasoned. Attempting its own crossbreeding is out of the question for Bro Asia at the moment. “We had decided from the beginning to solely use Brazilian seeds. Brazil is the undisputed number one in researching and developing new varietals, so why should we bother?” Freese said. “Even Alliance One recently moved all their r&d operations to Brazil. That tells you everything.”
Acreage expansion and varietal trials on the horizon
If the about-to-start third season turns out as good as the two initial ones, Bro Asia Lao plans to expand its current 20 hectares, which are contracted from local farmers. According to co-director Roman Lai, Bro Asia presently is the first and only licensed tobacco-growing company in Laos, enjoying comprehensive government support. “The Lao government has contractually approved ac for expanding to up to 141 hectares in the northern province of Luang Nam Tha,” divulged Lai. This concession won’t be fully utilized at once. Instead, it is going to be a gradual expansion. “Our initial results have been exceptionally good, so [in the] coming season we will probably expand to 25 hectares; and then more step by step.” The Lao government recognized from the start that Bro Asia can create much needed work and income opportunities for locals. “That’s why I believe that the authorities will be happy to eventually provide us with even more land [than those 141 hectares] if the need should arise,” said Lai.
Lao government fostering trust among villagers
With Laos’ economy already being agriculture-focused, Lai explained that the authorities were eager to diversify beyond mainstream crops such as paddy, soybeans, and sugar cane. The province of Luang Nam Tha alone, where Bro Asia Lao is headquartered, avails of 33,000 hectares of arable land. “Our project envisions that the government acts as a facilitator and promoter to assist us in building trust with the villagers so we can negotiate farming contracts with them to grow tobacco on our behalf,” said Lai. He claimed that this strategy is already bearing fruit. Thanks to governmental support, individual farmers and even entire village communities have contacted the company with requests to partake in future tobacco seasons, being trained and supervised by Bro Asia’s own agronomists. “And this is very different from what some Chinese companies are doing in Laos,” Lai insisted. “The Chinese bring their own technical teams, temporarily hire seasonal workers at rock bottom wages, and then they vanish together with the harvest.”
Building a stable economy cycle
By contrast, Bro Asia Lao Co. Ltd. is a privately-owned local company that provides farming villagers with long-term prospects. “We teach them how to grow tobacco on their own land, furnish them with seeds, give them hands-on agronomic assistance, train them how to increase their yields, purchase their harvest from them at fair prices,” Lai explained. “In fact, we are building a stable economy cycle in Laos that will actually benefit locals instead of just exploiting them. Nobody has ever done that before,” he said. To prove his point, Lai cited “the stacks of contractor agreements signed by villagers with their thumbprints [as a large proportion of the rural people are analphabets].” In addition, direct contracting prevents potential corruption. “Not a single cent goes into the pockets of shady government officials because contracts are exclusively taken out between our company and the farmers, whom we then directly pay for their labor and produce.”
Sustainable curing thanks to hydroelectric power
Sustainability is an important subject for Bro Asia Lao, too. The company does not use firewood for leaf curing, but entirely banks on electricity. It’s the one energy source Laos has in abundance due to several hydroelectric dams, even exporting huge amounts to neighboring Thailand. “There’s a gigantic surplus of electricity in Laos, and it’s very affordable,” explained Ari Freese. “We installed China-made electric curing ovens and are deploying them at all curing stages, which in total takes 6 to 7 days on average.” he said, adding that he was very happy with the results. But it also gives him peace of mind to do something for the environment instead of blowing countless tons of wood fire-generated CO2 into Lao’s pristine air.
Nousavanh Khounmeuang showcasing samples of Bro Asia Lao’s surprisingly good FVC. Photo credit: Thomas Schmid
A Laos-Singapore Marriage
Bro Asia Lao’s co-director Nousavanh Khounmeuang is a native of Luang Nam Tha province. After finishing her education in China, she had for several years worked on various projects for China Tobacco, an engagement that triggered her interest in tobacco. Soon a desire arose to bring this lucrative industry to her home country; or rather, to the fertile fields of Luang Nam Tha. “I definitely recognized a strong future potential for commercial-scale tobacco production there,” she told Tobacco Asia. “My home province is famous for its agriculture and natural environment. There is no pollution, the soil is nutrient-rich, the air is very fresh, and I was convinced that it would be the perfect spot to develop a tobacco growing sector there and bring a new income stream to the locals.” As part of her work with China Tobacco, Nousavanh about a decade ago had forged business ties with Singapore-based Joo@Meng Holdings, a commodity trading firm that eventually would also became involved in cigarette manufacturing. When Nousavanh approached Joo@ Meng with her idea a few years back, the company jumped at it. “We immediately identified an excellent investment opportunity, so we took on the entire financing for the Bro Asia project,” divulged co-director Roman Lai. But he quickly also pointed out that this was strictly not a joint venture set up per se. “Bro Asia Lao Co. Ltd. is a completely independent, purely Laotian company with financial backing from Singapore. And we are here for the long term.”