Lao Medicinal Plants.. - TABI

LAO PDR 

Supply Capacity Survey 

on medicinal herbs 

20/12/04-19/01/05 

Survey prepared by Sengphet Phongphachanh 

National Consultant

Acknowledgement 

The supply capacity survey on medicinal plants was made possible by the 

contributions of ITC/UNTACD/WTO, numerous individuals, governmental 

ministries, departments, institutions, public and private businesses. Without the 

efforts and support of the committed individuals, organizations and businesses 

mentioned above, the author would not have been able to undertake this survey. All 

the contributors are gratefully acknowledged for their support of this report.

I. Introduction 

TABLE OF CONTENTS 

A. Medicinal plants covered under this survey 

B. Significant of medicinal plants to the economy 

C. Specific objective of the survey 

D. Methodology 

II. Structure of the medicinal plants sector 

A. Production and Capacity 

B. Prices 

C. Shipping 

D. Packaging 

E. Quality Control 

F. Local Market 

G. Export 

H. CITES Constraints 

I. Company’ Needs Assessment 

III. Conclusion and Recommendations 

IV. Limitation to the development of medicinal plant sector in Lao 

PDR 

V. Limitation 

VI. Annexes

I. INTRODUCTION 

Lao PDR possesses a wealth in medicinal plants which can provide a 

potential for Lao PDR to export. Currently, export of medicinal plants is 

becoming an attracting business opportunity for exporters and potential 

exporters in Lao PDR to tap in the medicinal plants sector. The reason for this 

is that firstly the world population is more interested in natural products and 

thus the consumption of herbal medicines is gaining its momentum recently; 

and secondly, according to the World Health Organization (WHO) estimation, 

the demand for medicinal plants is about US $14 billion a year and projected 

by the year 2050 is US$5 trillion. 

However to enter in this competitive world market , it is important for 

the exporters and potential exporters to have a realistic and relevant strategy to 

ensure a sustainable export growth and this is the reason of International 

Trade Center (ITC) in collaboration with Lao National Trade Promotion 

Center has established a Trade Promotion Project in medicinal plants sector. 

A starting point of this project is to conduct a survey to identify the 

supply capacity of medicinal plants. Thus, this report described issues and 

considerations regarding supply capacity of medicinal plants and this will then 

provide an initiative for a further development of marketing plan for export of 

medicinal plants in Lao PDR. The end output of this project is a sellers and 

buyers’ meeting. 

A. Medicinal plants covered under the survey 

Medicinal plants covered under the survey are the medicinal plants 

which have been already exported (Table 1) and the medicinal pants which 

have potential for exportation (Table 2).

Table 1: Medicinal plants that have been already exported: 

No Tariff Local Group Scientific 

Code Name 

Name 

1 1211.90.95 Nha 

Orthosiphon 

Nouad 

stamineus 

Meo 

Benth 

2 1301.90.10 Nhane III Styrax 

tonkinense P. 

3 1302.12.00 Kheua II Coscinium 

Hem 

usitatum Pierre 

4 0908.30.00 Mak 

Neng 

5 1211.90.99 Khing 

dam 

6 1211.90.94 Chan dai 

deng 

II Amomum 

ovoideum P. 

III 

Kaempferia 

parviflora 

Wall. 

Dracaena 

cambodiana 

Pierre ex 

Gagnep 

7 1211.90.94 Khe Hom II Cinnamomum 

cassia Presi 

8 083.50.00 

Chong 

Ban 

9 1211.90.95 Phak 

Nok Na 

10 1211.90.95 Seng 

Beua 

III 

Sterculia 

lychnophora 

HANCE 

Centella 

asiatica 

Urban 

III Strychnos nux 

vomica L. 

Used 

Parts 

Aerial 

part 

Indication Sources 

Diuretic and 

Rheumatism 

Whole country 

Resin Expectorants Northern part 

Liana Diabetes 

mellitus, 

Hepatitis and 

Dysentery 

Seed Stomach ache 

And nervine 

tonic 

Rhizome Ulcer gastric 

and Tonic 

Red 

lignified 

core 

Tree bark 

& Stem 

bark 

Bruises, 

Contusions and 

inflammation 

Dyspepsia, 

Diarrhea and 

colic 

Fruit Dysentery and 

inflammation 

Whole 

plant 

Seeds of 

ripe fruit 

Table2: Medicinal plants which have a potential for exportation 

Tonic, Fever 

and 

Constipation 

Neuralgia 

Paralysis 

Myasthenia 

Attapeu, 

khammoun, 

and Vientiane 

Province 

Northern part 

Northern part 

Northern part 

(Mountainous 

areas) 

Northern part 

(Mountainous 

areas) 

Champasak,Sal 

avanh, Xekong, 

Attapeu 

Whole country 

Southern part 

No. Tariff Local Group Scientific Name Used Indication Sources 

Code Name 

parts 

1 1211.90.99 Tin Pet III Alstonia scholaris Bark Anemia, Whole country 

(L.) 

Colic and 

acute arthritis 

2 1211.90.99 Ya Hua III Smilax glabra Rhizome Rheumatism, Northern part 

Roxb. 

appetite (Samnua, 

stimulants Xieng khuang, 

and nervine Luangprabang)

3 1211.90.99 Seng 

Kham 

Ton 

4 1211.90.99 Khing 

Kheng Pa 

Kang 

5 1211.90.99 Hua ka 

bouk 

6 1211.90.99 Ki Min 

Kheun 

7 1211.90.99 Mak 

Toum 

8 1211.90.99 Tom 

Ngeun 

9 1211.10.90 Oy Sam 

Suan 

10 1211.10.90 Van 

Nang 

11 1211.90.99 Chi nai 

kom 

12 1211.90.99 Phak 

boua 

leuad 

13 1211.90.99 Mak Yo 

Pa 

14 1211.90.99 Kua Phak 

Buang 

15 1211.90.99 Kav 

Keua 

deng 

16 1211.90.99 Kua 

II Terminalia 

nigrovenulosa L. 

III Homalomena 

aromatica Schott 

Amorphophalus 

campanulatus 

BL. 

Curcuma 

domestica Valet 

III Aegle marmelos 

III 

Corr. 

Stephania 

rotunda Lour 

III Streptocaulon 

extensum Wight 

III 

II 

Curcuma 

xanthorizae 

Adenosma 

indianum 

Eleutherine 

subaphylla 

Gagnep. 

Morinda 

Tinctoria Roxb. 

Passiflora foetida 

L. 

tonic 

Stem Dysentery 

hematic tonic 

Rootstocks 

Stomachic 

remedy, 

Hepatitis and 

Rheumatism 

Whole country 

Northern part 

Rhizome Malaria Northern part 

Rhizome Gastric ulcer 

and Hepatitis 

Fruit Appetite 

stimulants 

Tuberous Sedative and 

roots cardiac tonic 

Liana Sore throat 

and gastric 

ulcer 

Rhizome Vaginodynia 

& 

genitourinary 

tract 

Aerial 

part 

Infections 

Antibacterial 

and 

Cholagogic 

Bulbs Anemia, 

Inflammation 

and gastric 

ulcer 

Fruit Hypertension 

Diabetic 

Aerial 

parts 

Butea superba Tuberous 

roots 

III Tinospora crispa 

Koua Ho 

(L.) 

17 1211.90.99 Rasabi Andrographis 

paniculata 

(Burm.f.) Nees. 

Insomnia 

Neurasthenia 

Male tonic, 

Rheumatism 

Stem Tonic, 

Fever 

Aerial Bronchitis, 

parts Bacillary 

dysentery 

and Diarrhea 

Whole country 

Whole country 

Northern part 

Middle part 

(Salakam) 

Whole country 

Whole country 

Whole country 

Northern part 

Whole country 

Whole country 

Whole country 

Whole country

18 1211.90.99 Mone Morus acidosa 

Griff 

19 1211.90.99 Mak 

Kham 

pom 

Phyllanthus 

emblica Linn. 

20 1211.90.99 Kav Bok Catharanthus 

roseus (L.) 

Leaves Hypertension 

Insomnia 

Cough 

Fruits Hypertension 

Expectorants 

Aerial 

parts 

Cardiac 

Remedy, 

Hypertension 

Whole country 

Whole country 

Whole country 

21 1211.90.99 Nat hom 

Artemisia annua Leaves Malaria Whole country 

Ban Noy 

L. 

22 1211.90.99 Bi Khon III Brucea sumatrana Whole Diabetic Southern part 

Roxb. 

plants 

23 1211.90.99 Man Kha III Codonopsis Tuberous Tonic, Xieng Kuang 

Kai 

javanica (Blume) roots Anorexia and 

Hook.f. 

Anaemia 

24 1211.90.99 Man On III Polygonum Tuberous Neurasthenia, Sam Nua 

ling 

multiflorum roots Anemia and 

Thunb. 

Arthritis 

25 1211.90.99 Mak 

Coix lacryma- Fruits Diuretic and Whole country 

Deuy 

heen 

jobi L. 

General tonic 

26 1211.90.99 

Iene 

don 

II Osbeckia 

Chinensis L. 

roots Diabetic 

mellitus, 

Malaria and 

Appetite 

stimulans 

The tariff codes used for medicinal plants in this survey are in the 

ASEAN Harmonized Tariff Nomenclature (AHTN). The AHTN is based 

on H.S 2002 under the World Customs Organization (WCO). The AHTN 

comprises of three-category digit code: Heading No with 4-digit code, 

Subheading No with 6 and 8 digit code. The tariff code 1211.90.99 is 

used for the general terms “Other” of medicinal plants and medicinal 

plants parts. Since the medicinal plants are not only used as raw materials 

for traditional medicines but they can also be used as materials for 

pharmaceutical products, foods, cosmetics, perfumery, thus their tariff 

codes are binding to different Heading Nos. 

According to the National Decree endorsed by the Prime Minister 

regarding medicinal natural resources in September 2003, medicinal plants 

Middle to 

Southern part

are categorized in three groups. Group I includes rare and endangered 

medicinal plants while Group II are medicinal plants which have 

commercial values. The last group, Group III includes medicinal plants 

which are abundant. For Group I medicinal plants, the exploitation and 

harvesting have to be certified from the Ministry of Health and concerned 

authorities. In terms of Group II medicinal plants, the exploitation and 

harvesting have to be certified from the Ministry of Health and concerned 

authorities by providing a management plan about harvesting and 

reforestation. In this report, there are five medicinal plants from group II 

such as, Coscinium usitatum Pierre, Amomum ovoideum P., 

Cinnamomum cassia Presi, Terminalia nigrovenulosa Pierre, Morinda 

Tinctoria Roxb and Osbeckia Chinensis L. 

B. Significant of medicinal plants to the economy 

In rural area of Lao PDR, most people depend on the use of 

medicinal plants in preventing and curing diseases. Therefore, they collect 

medicinal plants from the wild to serve this purpose. In addition, for the 

medicinal plants which have commercial values, they also try to cultivate 

in order to supply to the market. However, medicinal plants sector is not 

well developed as this sector has received low priority in national 

investment, research and export development. 

Even though, Lao PDR is an agricultural based economy and 

possesses its capability in supplying of medicinal plants for the world 

market, this potential is not well managed to become a national 

competitive advantage if compare with other neighboring countries such 

as Thailand and Vietnam. If in Lao PDR, this medicinal plants sector is 

well managed and promoted, it can have a remarkable contribution to the 

sustainable export performance and lead to the economic growth of the 

country. This sector can generate income to the people in rural area

especially create a job opportunity, and reduce poverty. Moreover, the 

successful development of this sector will contribute positive impacts for 

the development of the national health care systems, improvement of 

people welfare, creation of competitive pharmaceutical products, and 

encouragement of new effective and less side effect drug discovery in the 

pharmaceutical industry. Furthermore, medicinal plants are not only used 

as raw materials in the pharmaceutical industry, they can also be used as 

raw materials in the food, cosmetic and perfumery industry. 

C. Specific objectives of the survey 

The objective of the survey is to describe the current situation in 

the sector of medicinal plants. The survey provides the information on the 

supply capacity of medicinal plants in Lao PDR. The supply survey aims 

at: 

• Describing the characteristics and structure of the sector 

• Identifying obstacles that impede the export capabilities 

• Assessing the potential for increasing supply capacity and for new 

investment opportunities 

• Determining specific technical support requirements 

D. Methodology 

The survey consisted of two steps: desk survey and field survey. 

Desk survey was conducted through various departments and 

institutions in Vientiane such as, Department of Food and Drugs, 

Traditional Medicine Research Center, Forestry Conservation Agency, 

Department of Customs, Department of transportation, Department of 

Foreign Trade. In addition, Trade Departments and Traditional Medicine 

Stations at provincial level were contacted by phone and fax for a desk 

survey.

Field research included interviews with experts in the medicinal 

plants field and representatives from public and private pharmaceutical 

and agriculture companies, altogether 11 companies. Of these, 

questionnaires were distributed to eight companies in order to assess their 

needs and impediments related to exports. These eight companies were 

Pharmaceutical Factory No.2, Pharmaceutical Factory No.3, Vienthong 

Trading Company LTD., Kaphayanak Lao Herbal Medicinal Factory, 

Kanoukham Lao herbal medicinal Factory, Society Development of Forest 

Export-Import Luangprabang, CBF Pharmacy Co. ltd. and Agroforex 

Company. In addition, a site visit was conducted at DanKham village in 

Vientiane where Orthosiphon stamineus Benth is cultivated. Agroforex is 

the company which cultivates Orthosiphon stamineus Benth for export. 

It should be noted that some figures (capacity supply, local price) 

provided in this report were based on estimation due to the absence of 

alternative sources of statistics. 

II. STRUCTURE OF THE MEDICINAL PLANTS SECTOR 

Medicinal plants sector in Lao PDR are currently in its infancy 

development. Even though, Lao PDR possesses high potential in medicinal 

plants, which can be used for herbal remedies and herbal supplements, 

medicinal plants are not widely used in Lao PDR and also have low local 

market share as compared to modern medicines. This is because of a lack of 

scientific knowledge of herbal medicines which leads to the low priority in 

usage of herbal medicines by consumers especially modern doctors. 

A. Production and Capacity 

The supply base of medicinal plant products is largely from the 

wild sources and this wild source. However a quota is needed from the 

Department of Forestry and agriculture for commercial collection of wild

medicinal plants. Quotas of some medicinal plants for the year 2004 to 

2005 are provided in Annex 1. 

Currently, reforestation of medicinal plants is not widely 

implemented and as a result of this, this wild source is shrinking from time 

to time. Therefore, there is a need for cultivation of medicinal plants as 

cultivation will provide a sustainable alternative to the present collection 

from the wild and also a sustainable supply of medicinal plant products to 

the export market. However, to make cultivation of medicinal plants, 

resources are needed such as land, manpower, money, etc. Thus, access to 

regular and consistent market demand and access to financial sources are 

important and necessary for the investment in cultivation of medicinal 

plants. 

Table 3 shows medicinal plants, which have been already 

exported; and Table 4 lists medicinal plants which have a potential for 

exportation. The figures given in the tables are made on estimation based 

on the information of the Forestry Research Center, Export Companies, 

Potential Export Companies, herbalists, collectors and cultivators. 

Table 3: Medicinal plants that have been already exported: 

No. Scientific 

Name 

1 Orthosiphon 

stamineus 

Benth 

2 Styrax 

tonkinense P. 

3 Coscinium 

usitatum Pierre 

4 Amomum 

ovoideum P. 

Product Supply 

Capacity 

Dried aerial 

part 

Tones/year 

100 

Collection 

Types 

References 

cultivate Cultivator 

Dried resin 120-150 wild Society Development 

of Forest Export- 

Import LuangPrabang 

& Viengthong 

Trading Co. Ltd. 

Dried liana 50 wild Herbal Trading 

Import-Export Co. 

Ltd. 

Dried seed 1000-1800 wild Society Development 

of Forest Export-

5 Kaempferia 

parviflora Wall. 

6 Dracaena 

cambodiana 

Pierre ex 

Gagnep 

7 Cinnamomum 

cassia Presi 

8 Sterculia 

lychnophora 

HANCE 

9 Centella asiatica 

Urban 

10 Strychnos nux 

vomica L. 

Dried 

rhizome 

Dried red 

lignified 

core 

Dried tree 

and stem 

bark 

Dried fruit 1000 

(every 4 

years 

period) 

Dried 

whole plant 


& Viengthong 

Trading Co. Ltd. 

30-40 cultivate Society Development 

of Forest Export- 


150 wild Viengthong Trading 

Co. Ltd. & Forestry 

Research Center 

500 wild Viengthong Trading 

Co. Ltd. 

wild Forestry Research 

Center 

10 wild collectors 

Dried seed 5 wild collectors 

Table2: Medecinal plants which have a potential for exportation: 

No. Scientific 

Name 

1 Alstonia 

scholaris L. 

2 Smilax glabra 

Roxb. 

3 Terminalia 

nigrovenulosa 

L. 

4 Homalonema 

occulta (Lour.) 

Schott 

5 Amorphophalus 

campanulatus 

BL. 

6 Curcuma 

domestica Valet 

7 Aegle marmelas 

Corr. 

Product Supply 

Capacity 

Tones/year 

Collection 

Types 

References 

Dried Bark 12-15 Wild Forestry Research 

Center 

Dried 

rhizome 

20 Wild Collector 

Dried Stem 50 Wild Collector 

Dried root 

stocks 

Dried 

rhizome 



Dried 100 Cultivate Pharmaceutical 

rhizome 

Factory No. 2 

Dried fruit 20 Wild / 

Cultivate 

Collector

8 Stephania 

rotunda Lour 

9 Streptocaulon 


10 Curcuma 

xanthorizae 

11 Adenosma 

indianum 

12 Eleutherine 

subaphylla 

Gagnep. 

13 Morinda 

Tinctoria Roxb. 

14 Passiflora 

foetida L. 

15 Butea superba 

16 Tinospora 

crispa (L.) 

17 Andrographis 

paniculata 


18 Morus acidosa 

Griff. 

19 Phyllanthus 

emblica Linn. 

20 Catharanthus 

roseus (L.) 

21 Artemisia Annua 

L. 

22 Brucea 

sumatrana 

Roxb. 

23 Codonopsis 

javanica 

(Blume) 

Hook.f. 

24 Polygonum 

multiflorum 

Thunb. 

25 Coix lacrymajobi 

L. 

Dried 

tuberous 

root 


Dried Liana 50 Wild Collector 

Dried 50 Wild / Pharmaceutical 

rhizome 

Cultivate Factory No. 2 

Dried aerial 30 Wild Pharmaceutical 

part 

Factory No. 2 

Dried bulb 50 Cultivate Collector 

Dried fruit 20 Wild Collector 

Dried aerial 100 Wild/ Pharmaceutical 

part 

Cultivate Factory No.3 

Dried 

tuberous 

root 


Dried stem 100 Wild Collector 

Dried aerial 

part 

10 Cultivate Collector 

Dried leaves 50 Wild / 

Cultivate 

Collector 

Dried fruits 10 Wild Collector 

Dried aerial 100 Wild/ Pharmaceutical 

part 

Cultivate Factory No. 3 

Dried leaves 350 Cultivate CBF Pharmacy Co. 

ltd. 

Dried 10 Cultivate Kaphayanak Lao 

whole plant 

Herbal Medicinal 

Factory 

Dried 40-50 wild Herbal Trading 

tuberous 


roots 

Ltd. 

Dried 

tuberous 

part 

20 wild Herbal Trading 


Ltd. 

Dried fruit 100 wild Collectors

26 Osbeckia 

Chinensis L. 

Dried roots 20 wild Collectors 

The main problems of medicine plants production and capacity are as follows: 

• Lack of financing support in cultivation of medicinal plants 

• Difficulty in estimation of the supply capacity on dried medicinal 

plants as most of medicinal plants are collected from wild sources 

• Difficulty in identification of accurate species of medicinal plants in 

collecting and harvesting as many species exist 

• Poor agricultural practices and lack of knowledge on proper time and 

methods for plant identification, collection/harvesting, storage and 

post-harvest treatment practices 

• Lack of quality control and application of appropriate standards and 

good processing practices and this can lead to low and inconsistent of 

quality of dried medicinal plants 

• Insufficient sunshine for drying of medicinal plants during rainy 

season 

• Labor intensive and use of simple technology 

• Lack of R&D of high-yielding medicinal plant species 

• Difficulty in collecting and harvesting of wild medicinal plants in 

mountainous areas 

• Most medicinal plants are collected from wild sources and this can 

lead to the extinction of some endangered species due to improper 

harvesting practices. These improper harvesting practices may create 

dangerous consequences for the preservation of medicinal plants and 

might only produce short-term benefit and lead to the diminishing 

comparative advantage of the country’s natural resources, which will 

be very difficult to regain in the future.

B. Prices 

Table 5 shows a local price of exported medicinal plant products. 

Table 6 shows a local price for potential exported medicinal plant 

products. The prices shown in Table 5 and 6 are given as minimum and 

maximum figures. These figures are based on the estimation of various 

sources such as, Provincial Traditional Medicine Stations (Xieng Khuang, 

Oudomxay, Xayabouli, Luangprabang, Savannakhet, Champasak and 

Vientiane), companies, herbalists and collectors. Pricing terms can be 

affected by many factors such as seasonality, collection type, prevalence, 

collection distance and illegal trade. The prices shown in Table 5 and 6 

don’t include shipping costs. 

Table 5: Local price of medicinal plant products which have been already 

exported: 

No. Scientific Name Product Minimum local 

Price 

(Kip/kg dry) 

1 Orthosiphon Dried aerial 15.000 

stamineus Benth part 

2 Styrax tonkinense 

P. 

3 Coscinium usitatum 

Pierre 

4 Amomum 

ovoideum P. 

5 Kaempferia 

parviflora Wall. 

6 Dracaena 

cambodiana Pierre 

ex Gagnep 

7 Cinnamomum 

cassia Presi 

8 Sterculia lychnophora 

HANCE 

9 Centella asiatica 

Urban 

10 Strychnos nux 

vomica L. 

Dried resin 15.000 30.000 

Dried liana 6.000 28.000 

Dried seed 15.000 50.000 

Dried rhizome 60.000 150.000 

Dried red 

lignified core 

15.000 25.000 

Dried tree and 

stem bark 

5000 25.000 

Dried fruit 25.000 50.000 

Dried part of 

whole plant 

10.000 50.000 

Dried seed Na Na 

Maximum local 

Price 

(Kip/kg dry) 

50.000

Table 6: Local price of medecinal plants products which have a potential for 

exportation 

No. Scientific Name Product Minimum local 

Price 

(Kip/kg dry) 

1 Alstonia scholaris 

L. 

2 Smilax glabra 

Roxb. 

3 Terminalia 

nigrovenulosa L. 

4 Homalonema 

occulta (Lour.) 

Schott 

5 Amorphophalus 

campanulatus BL. 

6 Curcuma domestica 

Valet 

7 Aegle marmelas 

Corr. 

8 Stephania rotunda 

Lour 

Dried Bark 4.000 15.000 


Dried Stem 4.000 10.000 

Dried root 

stocks 

5.000 25.000 



Dried fruit 10.000 30.000 

Dried 

tuberous root 

10.000 45.000 

Maximum local 

Price 

(Kip/kg dry) 

9 Streptocaulon 


Dried Liana 20.000 30.000 

10 Curcuma 

xanthorizae 


11 Adenosma Dried aerial 5.000 10.000 

indianum 

part 

12 Eleutherine 

subaphylla Gagnep. 

Dried bulb 20.000 100.000 

13 Morinda Tinctoria 

Roxb. 

Dried fruit 15.000 30.000 

14 Passiflora foetida L. Dried aerial 

part 

10.000 30.000 

15 Butea superba Dried 

tuberous root 

Na Na 

16 Tinospora crispa 

(L.) 

Dried stem 15.000 50.000 

17 Andrographis Dried aerial 30.000 70.000 

paniculata 


part

18 Morus acidosa 

Griff. 

Dried leaves 10.000 30.000 

19 Phyllanthus emblica 

Linn. 

Dried fruits 15.000 25.000 

20 Catharanthus roseus Dried aerial 10.000 50.000 

(L.) 

part 

21 Artemisia Annua L. Dried leaves Na Na 

22 Brucea sumatrana Dried part of 20.000 30.000 

Roxb. 

whole plant 

23 Codonopsis Dried 8.000 20.000 

javanica (Blume) 

Hook.f. 

tuberous roots 

24 Polygonum Dried 8.000 20.000 

multiflorum Thunb. tuberous roots 

25 Coix lacryma-jobi 

L. 

Dried fruit 5.000 15.000 

Osbeckia Chinensis Dried roots 40.000 50.000 

26 L. 

Note: Na: Not available 

C. Shipping 

Transportation of goods in Lao PDR is mainly depends on road 

route. The government has currently upgraded and improved the road 

system in order to ensure smooth traffic throughout the country. This 

improvement of road system will facilitate the transportation of exported 

goods. 

In Lao PDR, there are 19 transportation companies, 17 packaging 

and shipping companies and 10 associations of goods’ transportation 

which provides international services. 

In order to enhance the facilitation on international road 

transportation, Lao government has signed the agreements on road 

transportation with Vietnam, Thailand, China and Cambodia; the 

government is currently in the process of preparing to sign agreements on 

road transportation with other ASEAN member countries and is expected 

to complete in 2005.

However, the transportation cost is high due to the new regulation 

of reducing truck load volume for goods’ transportation. 

In terms of customs services, all of the goods exported should have 

their products match with the tariff codes established by the department of 

Customs. There are no duties on export of medicinal plant products only 

fees for the processing of documents. 

D. Packaging 

However, special fee have to be paid for export of wild products. 

In terms of crude medicinal plants packaged in bulk form, 

packaging should be design to protect from moisture as it can have 

negative impact on the quality of medicinal plants. Packaging materials 

used are mainly P.E. plastic bags, jute bags, wooden boxes, drums and 

paper cartons. Some packaging materials are imported from Thailand and 

Vietnam. 

E. Quality control 

The quality control of crude medicinal plants is not very strict compared to 

semi-products or finished products of medicinal herbs. However, Lao 

PDR still face with some constraints in terms of quality control mainly: 

• Lack of skilled and qualified human resources in identify 

medicinal plants species and quality control of medicinal plant 

products 

• Lack of facilities and equipments to control and sustain quality of 

medicinal plants 

• Lack of reference documents such as pharmacopeias for 

medicinal plants

• Poor quality control procedures and lack of standardization in 

processing procedures and methods of medicinal plants which 

can lead to low and inconsistent quality 

The Food and Drug Department, Ministry of Health, has recently 

established a new division called Division of Traditional Medicines. This 

division is currently in the process of developing and establishing policies 

and regulations regarding the administration of traditional medicines from 

raw materials to the finished products and these are expected to be 

completed sometime in 2005. 

F. Local market 

Medicinal plants are used throughout the country but still not 

popular if compared with western medicines. Therefore, the local market 

of medicinal plant products is small in size and most household base. 

Most consumption of medicinal plant products is found in remote areas. 

This is due to first people living in remote areas still have limited access to 

health care facilities such as hospitals and clinics; and second western 

medicines are costly for them if compared with their income; and thus 

they could not afford to buy those expensive western medicines. 

Herbal medicines supplying to the local market are in different 

forms ranked from unprocessed forms such as crude medicinal plants to 

processed forms such as extracts, liquor, tea, syrups and tablets. These 

herbal medicines are supplied from different sources such as 

pharmaceutical companies, herbal medicine factories and retail herbal 

medicine shops mostly owned by healers and herbalist. 

G. Export 

Export system of medicinal plant products exists currently both 

official and non-official. Currently, medicinal plants are exported in small

quantities. Export markets of Medicinal plant products are Thailand, 

China, Germany, France, South Korea, Europe, Middle E. and S.E. Asia 

and New York. 

Annex 2 lists three medicinal herb manufacturing companies. 

Annex 3 and 4 show three export companies and five potential 

export company profiles. Also, detailed company profile and product 

profile of these export companies and potential export companies are 

provided in Annex 5. 

In terms of export of medicinal plants, the main constrains are 

mainly: 

• Lack of national standards of medicinal plants products 

• Lack of market demand 

• Lack of trade contracts 

• Existing of unorganized and informal cross-border trade 

• Lack of export incentives from governmental organization 

• Lengthy and complicated export procedures 

• Not clearly defined policy and lack of coordination among 

authorities for medicinal plants sector concerning export 

registration and commercialization 

• Lack of market information regarding exports in terms of 

quality, quantity and price, information about the world trade and 

demand dynamics in the overseas market 

• Lack of knowledge on international and specific regulations of 

importing countries governing imports of medicinal plants 

including quality, Intellectual Property Rights etc. 

• High transportation cost due to current regulation of reducing 

truck load volume for goods’ transportation 

And the main incentives are mainly: 

• Export duties’ exemption

• Increasing market demand for herbal medicines worldwide 

• The abundant supply of medicinal plants and the supportive 

climate for sustainable cultivation and exploitation 

• The availability of land for cultivation of medicinal plants 

H. Constraints regarding CITES 

CITES (Convention on International Trade in Endangered Species 

came into force on July 1, 1975. Lao PDR has been a member of CITES 

since May, 2004. CITES listed plants in Appendix I for Lao PDR are 

plants in the family of Orchidaceae with six species such as, 

Paphiopedilum appletonianum, Paphiopedilum bellatulum, Paphiopedilum 

callosum, Paphiopedilum concolor, Paphiopedilum gratrixianum and 

Paphiopedilum villosum. Appendix I include species threatened with 

extinction; trade in specimens of these species is permitted only in 

exceptional circumstances. The medicinal plants provided in this report 

are not included in the Appendix I of CITES listed plants. 

I. Assessment of companies Needs 

Questionnaires were distributed to eight companies in order to 

assess their needs and impediments related to exports. However, there 

was one company which didn’t return the questionnaires. The seven 

companies which returned the questionnaires are Pharmaceutical Factory 

No.2, Pharmaceutical Factory No.3, Vienthong Trading Company LTD., 

Kaphayanak Lao Herbal Medicinal Factory, Society Development of 

Forest Export-Import Luangprabang, CBF Pharmacy Co. ltd. and 

Agroforex Company. The detail of the company’ needs assessment is 

provided in Annex 6.

III. CONCLUSIONS AND RECOMMENDATIONS 

A SWOT (Strength-Weakness-Opportunity-Threat) analysis is used to 

assess the actual current situation on medicinal plants sector in Lao PDR 

Strengths: 

• A wealth in medicinal plants which have a potential for export 

• Widely availability of land and climatic environment for cultivation of 


• Export duties exemption 

• Low labor cost 

• Improvement of road transportation throughout the country 

Weaknesses: 

• Labor intensive and use of simple technology 

• Lack of R&D leads to the unavailability of scientific knowledge in 


• Low level of quality control system and lack of standardization system at 

national level 

• No effective system in enforcement of law and regulations 

• Lack of skilled labor, facilities, equipments and funds to process medicinal 

plants into semi-products and finished products which can add more value 

compared to unprocessed dried medicinal plants 

• Limited knowledge and access to IPR (Intellectual Properties Rights) 

system which can have negative impact for exporters. 

• Lack of coordination and cooperation among concerned parties in 

medicinal plants sectors 

Opportunities: 

• Increasing consumption of people worldwide for medicinal plants 

• Granting of NTR (Normal Trade Relation) which can provide Lao PDR 

incentives to export to the United States market

• Receiving AFTA (ASEAN Free Trade Area) in the near future which 

provides Lao PDR incentives to export to ASEAN members’ countries 

• Expansion and diversification of international market 

Threats: 

• Low and inconsistent quality of medicinal plants 

• Lack of national standardization for medicinal plant products 

• Not widely implementation of reforestation and improper collecting and 

harvesting which can lead to the extinction of endangered species 

• Low priority in national investment, research and export development in 

medicinal plants sector. 

• High competition in the near future due to AFTA 

RECOMMENDATIONS 

• Currently, Lao PDR still lack of qualified human resources in this 

medicinal plants sector. Thus, there is a need to educate and train human 

resources in subjects related to medicinal plants such as taxonomy, good 

practices of cultivation, harvesting and post-harvesting, production process 

for raw materials, semi and finished products, quality control and 

marketing of medicinal plants in order to have qualified people to work 

and develop in this sector. Only qualified people are the key driving forces 

for all the qualified tasks necessary for sustainable development of this 

sector. For example GAP (Good Agricultural Practices) should be trained 

to farmers and collectors in order to ensure quality and safety. 

• Qualitative and quantitative Identification of forest areas rich in medicinal 

plants in order to have accurate estimation on the supply capacity and to 

further formulate a management plan effectively to avoid unscientific 

exploitation and harvesting. In addition, there is a need to have an 

effective database system for the exploitation and harvesting, cultivation

and marketing of medicinal plants in order have real-time and reliable 

information as this is important for the export market 

• Encourage sustainable supply of medicinal plants by a sound management 

of cultivation of medicinal plants species which have commercial value. 

For example linkages can be established to cooperate and coordinate 

between farmers, pharmaceutical industries and agricultural companies for 

promotion of organic and contract farming. 

• As herbal products are used for health and nutrition purposes, cultivation 

must be done with good agricultural practices as well as organic farming 

methods to ensure quality and safety. A possible solution is to upgrade the 

current level of farming to a large scale contract farming with professional 

farm management. 

• Medicinal plants association could be established to be a forum to discuss 

and share information concerning medicinal plants issues. 

• Appropriate and systematic mechanism for coordination and 

implementation of policies relating to medicinal plants both at the national 

and provincial levels should be developed to facilitate inter-ministry, interprovincial 

and institutional collaboration to avoid duplication of efforts at 

all level. 

• A national regulation and registration of medicinal plants should be 

developed in order to ensure organized and effective processing and 

marketing of medicinal plants. 

• National standards, technical guidelines and methodology for medicinal 

plant identification, collection/harvesting, storage and post-harvest 

treatment practices should be established to ensure sustainable supply of 

high quality medicinal plant products. The Medicinal plants which have 

commercial value should be taken as priority for this development. 

• National pharmacopoeia and monographs should be developed for the 

medicinal plants which have commercial value. The government should

provide financial support to further research work of these medicinal 

plants related to cultivation, processing to semi/finished medicinal plant 

products, biochemistry, pharmacology, and Clinical trials, IPR in terms of 

law and lastly regulations related to medicinal plants’ products include 

Good Manufacturing Practice codes and Clinical Trial codes. 

• An environment conducive for export should be created and promoted to 

facilitate export of medicinal plants. This can be done by removing all the 

constraints at all levels which impede production and marketing of 

medicinal plants. Export incentives should be provided to the companies 

in order to support and facilitate exportation. 

• The government should provide access to financial institutions for low 

interest working capitals in helping out manufacturing companies, export 

companies and potential export companies so that they are able to develop 

their capacity and competency for export. 

• There is a need to have a comprehensive policy for recognition of 

medicinal plants in health care system in order to boost the local 

consumption of herbal medicines as herbal medicines are more costeffective 

and have fewer side effects in consideration with western 

medicines. In doing this, the government can save foreign currencies 

needed to import western medicines and raw materials for manufacturing 

of western medicines. 

IV. Limitation to the development of medicinal plant sector in Lao 

PDR 

The development of medicinal plant sector in Lao PDR is its infancy. 

There is no systematic approach in development of this sector. Even Lao PDR is 

rich in biodiversity but so far very few data about the supply capacity on 

medicinal plants are available due to the absence of quantitative survey on

medicinal plants. In 2003, there was a qualitative survey of medicinal plants in 

Hin Nam Nor areas, Khammouane province conducted by Traditional Medicine 

Research Center (TMRC). This survey is funded by the ASEAN Regional Center 

for Biodiversity Conservation and the European Commission. Trough this 

survey, 421 plants were collected. 

Also in the past, this sector received low priority in national investment, 

research and export development. There is no national college for traditional 

medicine where young people can learn about the production process and the use 

of traditional medicines which have been used by the ancestors. The college is 

the sole place to officially and systematically transfer the knowledge from the 

ancestors to the next generation. 

During the survey, some companies are reluctant to share their knowledge 

as medicinal plants are not commodities, they considered medicinal plants as their 

intellectual properties and their income depends on those intellectual properties. 

This is one of the reasons that the detailed and comprehensive information in this 

survey is not available. 

The other reason is that local and export markets for medicinal plant 

products are small in size and household base. Therefore, they are few data 

available and in some cases there are not. In addition, export of medicinal plants 

exists both formal and informal across the borders. Further suppliers of medicinal 

plants to the companies are more scattered among traders, collectors, healers and 

herbalists throughout the country. The supply quantities are small due to the low 

local market demand and small quantities of export. The most challenge problem 

of export of medicinal plants products is a lack of national standards and the 

national organization for these standards being accepted at international level.

V. Limitation 

follows: 

VI. Annexes 

While conducting this survey, there were some limitations described as 

• Informal and unorganized existence of export on medicinal plants 

• Not effective database system to keep tract of the exploitation and 

harvesting, cultivation and marketing of medicinal plants 

• One month-time for the survey is limited 

• The accuracy of data should be taken into account due to an estimation 

Annex 1: Quotas of medicinal plants for the year 2004 to 2005 

Annex 2: List of Lao Herbal Medicine Factory 

Annex 3: Exporters’ Profile 

Annex 4: Potential Exporters’ Profile 

Annex 5: Detailed company and product profiles of export and potential export 

companies 

Annex 6: Company's needs assessment

Lao Medicinal Plants.. - TABI

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