Laos and Malaysia establish strategic rail-sea trade link

The Star

26-05-2025

VIENTIANE (Vientiane Times/ANN): Laos and Malaysia have established a strategic partnership to boost cross-border trade via a rail-sea route, with the exchange of a Memorandum of Cooperation between Penang Port Sdn Bhd (PPSB) and Thanaleng Dry Port (TDP) in Malaysia on Sunday.
The document was exchanged between MMC Port Holdings Sdn Bhd Chief Executive Officer Datuk Azman Shah Mohd Yusof and PTL Holding Co., Ltd. (PTLH) Chairman and Founder, Dr Chanthone Sitthixay, witnessed by Prime Minister Sonexay Siphandone and his Malaysian counterpart Datuk Seri Anwar Ibrahim, Bernama reported on the day.
The Lao Prime Minister is in Malaysia on an official visit that includes attending the 46th Summit of the Association of South-East Asian Nations (Asean) and related meetings, scheduled to take place on May 26-27, at the invitation of PM Anwar.
The partnership between the two companies is part of the broader effort to bolster economic ties between the two Asean members and the rest of the region.
PPSB is a subsidiary of MMC Port, while PTLH is the parent company of Vientiane Logistics Park Co., Ltd., which manages the Thanaleng Dry Port - Laos' integrated logistics centre and the single window customs clearance point on the Laos-China Railway.
The partnership is part of a broader initiative under the regional Pan-Asia Railway Network, integrating the China-Laos Railway to create a strategic trade route linking southern China through Laos and Thailand, to Malaysia's west coast.
Thanaleng Dry Port managing director Sakhone Philangam told Bernama that the collaboration marked a significant milestone in transforming Laos into a key logistics player, building on its landlocked status.
He expected that the partnership would benefit Laos economically, as the country's small-scale economy needs to rely on higher trade volumes through cooperation with regional players like Malaysia and China.
'In logistics, you need agglomeration and massification. We don't have that volume, so this partnership will enable us to tap into a larger logistics network,' he was quoted as saying.
The collaboration will involve the sharing of operational knowledge, joint marketing efforts, system integration, simplification of documentation processes, harmonisation of infrastructure, and short-term personnel exchanges.
MMC Port is a holding company that operates five ports across Peninsular Malaysia, namely the PPSB, Port of Tanjung Pelepas, Johor Port Bhd, Northport (Malaysia) Bhd, and Tanjung Bruas Port Sdn Bhd, making it Malaysia's largest port operator.
Meanwhile, PTLH is a major Lao conglomerate that operates a wide range of businesses including logistics, finance, railway, industrial and investment zones, and gold (Bullion Bank).
Azman Shah said the initiative, which is aligned with efforts to enhance ASEAN connectivity, will reduce transit times and logistics costs, improve supply chain efficiency, and boost regional economic growth.
'We are pleased to contribute to Thanaleng Dry Port's efforts to realise Laos' national strategy to transform from a land-locked country to a land-linked nation,' the CEO was quoted as saying.
This is the second partnership that the Thanaleng Dry Port has secured with a Malaysian company.
Earlier, it signed an agreement with Mutiara Perlis Sdn Bhd to facilitate inland port services, leveraging the existing multimodal integration including the rail network of which the TDP is a vital part.
Containing the standard-gauge Laos-China Railway and the one-metre gauge Laos-Thailand rail track that run side by side to enable seamless connection, Thanaleng Dry Port has facilitated rail freight expresses linking Malaysia to several Chinese cities, bolstering cross-border trade.
In 2024, total bilateral trade between Laos and Malaysia exceeded US$43 million, up from just US$30 million in 2023, according to the Lao Ministry of Foreign Affairs.
Malaysia is Laos' fourth-largest foreign investor, with total investments amounting to US$946 million across 88 projects, in sectors including renewable energy, transport, telecommunications, construction, banking and hospitality. - Vientiane Times/Asia News Network