COMPANY PROFILE

Lam Soon (Hong Kong)

Limited

REFERENCE CODE: E64A2AA2-4E97-4492-8576-E965814DD319

PUBLICATION DATE: 7 Jan 2015
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Lam Soon (Hong Kong) Limited

TABLE OF CONTENTS

TABLE OF CONTENTS
Company Overview..............................................................................................3
Key Facts...............................................................................................................3
Business Description...........................................................................................4
History...................................................................................................................5
Key Employees.....................................................................................................7
Key Employee Biographies..................................................................................8
Major Products and Services............................................................................11
Top Competitors.................................................................................................12
Company View.....................................................................................................13
Locations and Subsidiaries...............................................................................16

Lam Soon (Hong Kong) Limited

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Lam Soon (Hong Kong) Limited

Company Overview

COMPANY OVERVIEW
Lam Soon (Hong Kong) Limited (Lam Soon) is an investment holding company engaged in the
manufacture and sale of a range of flour, edible oils, vegetable fats and household cleansing products.
The company markets its products under the brand names of Knife, Red Lantern, Soon, AXE, Labour,
Procleanic, Golden Statue, American Roses, and Crown. Lam Soon operates in Hong Kong, China,
Macau and the British Virgin Islands. It is headquartered in New Territories, Hong Kong, and employs
around 1,601 people.
The company recorded revenues of HK$4,117 million (approximately $530.9 million) in the fiscal
year ended June 2014, an increase of 13.8% over 2013. The company's operating profit was HK$181
million (approximately $23.3 million) in fiscal 2014, an increase of 0.3% over 2013. Its net profit was
HK$140.8 million (approximately $18.2 million) in fiscal 2014, an increase of 7.4% over 2013.

KEY FACTS
Head Office

Lam Soon (Hong Kong) Limited

Lam Soon Building
21 Dai Fu Street
Tai Po Industrial Estate
New Territories
HKG

Phone

852 2680 3388

Fax

852 2680 4069

Web Address

http://www.lamsoon.com

Revenue / turnover 4,117.0

(HKD Mn)
Financial Year End

June

Employees

1,601

Hong Kong Stock

Exchange Ticker

0411

Lam Soon (Hong Kong) Limited

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Lam Soon (Hong Kong) Limited

Business Description

BUSINESS DESCRIPTION
Lam Soon (Hong Kong) Limited (Lam Soon) is a Hong Kong-based company engaged in the
manufacturing and distribution of flour products, edible oil, household and institutional cleaning
products. The company operates in Hong Kong, China, Macau and the British Virgin Islands.
The company operates its business through two segments: food and detergent.
Lam Soon's food segment manufactures and sells a range of food products, including flour, edible
oils and vegetable fats for the catering industries and consumers. The company provides flour
products under the brand names of American Roses, Golden Statue, and Crown; and edible oils
under the Knife, Red Lantern and Soon brand names.
The company's detergent segment is involved in the manufacture and distribution of household
cleansing products, including liquid dishwashing detergent, laundry powder, liquid laundry detergent,
fabric softener, floor cleanser, and industrial marble cleansers. Lam Soon provides detergent products
under the AXE, Labour, ProCleanic brand names.
Lam Soon's subsidiaries include Jiangsu Lam Soon Flour Mills Company Limited, Asian Dragon
Limited, Swamex Food Service Limited, Richly Choice Development (PTC) Limited, Gladko Industries
Limited, Lam Soon Systems Limited, Lam Soon (Sichuan) Food Company Limited, Lam Soon Food
Industries (BVI) Limited, Lam Soon Realty Limited, and Shekou Lam Soon Silo Company Limited,
among others.

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Lam Soon (Hong Kong) Limited

History

HISTORY
Lam Soon (Hong Kong) Limited (Lam Soon) was founded in Singapore in the 1930s as a trader of
copra, rice and edible oil.
In 1961, the company began operating in Hong Kong.
Lam Soon Group commenced business in Hong Kong and established the first plant in Kwun Tong
in 1965.
The company was listed in 1972 on the Hong Kong Stock Exchange.
In 1977, Lam Soon's business was expanded in Hong Kong and moved the plant from Kwun Tong
to Sheung Sha Wan, Kowloon.
Lam Soon acquired Hong Kong Flour Mills in 1987. In 1989, the company constructed its first China
plant at Shekou Port Complex for Flour Milling and Oil Refining.
The company's subsidiary, Lam Soon Food Industries was listed on the Hong Kong Stock Exchange
in 1991.
In 1994, Lam Soon commenced operation of Guangzhou Lam Soon Homecare Products Limited in
Panyu, China.
The company commenced flour and oil production at Shekou Port Complex, China and relocated
Lam Soon Groups headquarters from Cheung Sha Wan to Tai Po Industrial Estate, in 1995.
Hong Leong Group Malaysia became one of the major shareholders of the company in 1997.
In 2002, the company acquired Jiangsu Jingyuan Flour Mills and established Jiangsu Lam Soon
Flour Mills Company Limited.
The company's Shekou Flour Mills expanded its daily wheat processing capacity in 2003.
Lam Soon acquired land in Qingzhou, China and established Lam Soon (Shandong) Food Company
in 2007.
The company acquired the assets for Flour Mill Operations in Jiangsu, China and set up Jiangsu
Lam Soon Food Supply Company Limited, in 2009.
In 2011, Lam Soon incorporated a subsidiary, named Lam Soon (Sichuan) Food Company Limited,
in China. In the same year, the company entered into a master services agreement with GuoLine

Lam Soon (Hong Kong) Limited

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Lam Soon (Hong Kong) Limited

History

Group Management Co Limited (GGMC), and GOMC Limited (GOMC) for the provision of services
by GGMC or GOMC to LSHK and/or the selected subsidiaries.
Evergreen Oils & Fats Limited, a 50-50 joint venture company, was formed between the Lam Soon
and the Hop Hing group. Both the parties entered into a mutual agreement to terminate the joint
venture agreement in 2012.

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Lam Soon (Hong Kong) Limited

Key Employees

KEY EMPLOYEES
Name

Job Title

Board

Leung Joseph

Group Managing Director

Executive Board

Kwek Leng Hai

Chairman

Non Executive Board

Whang Sun Tze

Non-Executive Director

Non Executive Board

Tan Lim Heng

Non-Executive Director

Non Executive Board

Tsang Cho Tai

Non-Executive Director

Non Executive Board

Anthony Lo Kai Yiu

Independent Non-Executive Director Non Executive Board

Huang Lester Garson

Independent Non-Executive Director Non Executive Board

Au Chee Ming

Independent Non-Executive Director Non Executive Board

Cheng Man Ying

Company Secretary

Lam Soon (Hong Kong) Limited

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Compensation
5444000 HKD

Senior Management

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Lam Soon (Hong Kong) Limited

Key Employee Biographies

KEY EMPLOYEE BIOGRAPHIES

Leung Joseph
Board: Executive Board
Job Title: Group Managing Director
Since: 2012
Age: 54
Mr. Leung has been the Group Managing Director at Lam Soon (Hong Kong) Limited (Lam Soon)
since 2012. He has over 27 years of experience in the food and consumer products sectors. Mr.
Leung served in Hong Kong and the US at corporations, including Sara Lee Corporation, Heinz USA
and R. J. Reynolds Tobacco Company USA. He holds a Bachelor's degree in Economics and a
Master's degree in Business Administration (Marketing) from Virginia Polytechnic Institute and State
University, the US.

Kwek Leng Hai

Board: Non Executive Board
Job Title: Chairman
Since: 2006
Age: 61
Mr. Kwek has been the Chairman at Lam Soon since 2006. He has been a Non-Executive Director
of the company since 1997. Mr. Kwek is a Director and shareholder at Hong Leong Company
(Malaysia) Berhad (HLCM). He is the President and Chief Executive Officer at Guoco Group Limited
(GGL). Mr. Kwek also holds directorships at listed subsidiaries and associated companies of GGL.
He also serves as a Director at Bank of Chengdu Co., Ltd. Mr. Kwek qualified as a Chartered
Accountant of the Institute of Chartered Accountants in England and Wales.

Whang Sun Tze

Board: Non Executive Board
Job Title: Non-Executive Director
Since: 1984
Age: 70
Dr. Whang has been a Non-Executive Director at Lam Soon since 1984. He holds a Doctorate degree
in Chemical Engineering.

Tan Lim Heng

Lam Soon (Hong Kong) Limited

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Lam Soon (Hong Kong) Limited

Key Employee Biographies

Board: Non Executive Board

Job Title: Non-Executive Director
Since: 1997
Age: 66
Mr. Tan has been a Non-Executive Director at Lam Soon since 1997. He is an Executive Director
at GGL and the Managing Director at GuocoCapital Limited and GuocoCapital Futures Limited
(formerly known as GuocoCommodities Limited), wholly-owned subsidiaries of GGL. Previously,
Mr. Tan worked in Geneva in 1974, with the United Nations Conference on Trade and Development.
He also served in the Singapore Civil Service as a Colombo Plan Scholar, from 1975 to 1978. Mr.
Tan worked in Hong Kong at a financial services company and a US-based bank. He holds a Bachelor
of Science degree in Engineering from University of Surrey and a Master of Sciences degree in
Management from Massachusetts Institute of Technology.

Tsang Cho Tai

Board: Non Executive Board
Job Title: Non-Executive Director
Since: 2004
Age: 64
Mr. Tsang has been a Non-Executive Director at Lam Soon since 2004. He joined the company as
an Independent Non-Executive Director in 1997. Mr. Tsang is also the Chief Financial Officer at the
GGL group. Mr.Tsang is the General Manager of Business Planning at Guoco Management Company
Limited, a wholly-owned subsidiary of GGL. He is a Fellow Member of the Association of Chartered
Certified Accountants and the Hong Kong Institute of Certified Public Accountants (HKICPA) as well
as an Associate Member of the Institute of Chartered Accountants in England and Wales.

Anthony Lo Kai Yiu

Board: Non Executive Board
Job Title: Independent Non-Executive Director
Since: 2008
Age: 66
Mr. Lo has been an Independent Non-Executive Director at Lam Soon since 2008. He is an
Independent Non-Executive Director at the Taiwan Fund. Mr. Lo also holds directorships at companies,
including IDT International Limited, Playmates Holdings Limited, Tristate Holdings Limited, and
Convenient Retail Asia Limited. He has over 30 years of experience in banking, finance and
investments. Mr. Lo is qualified as a Chartered Accountant with the Institute of Chartered Accountants
of Ontario, Canada and is a Member of the Hong Kong Institute of Certified Public Accountants.

Huang Lester Garson

Lam Soon (Hong Kong) Limited

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Lam Soon (Hong Kong) Limited

Key Employee Biographies

Board: Non Executive Board

Job Title: Independent Non-Executive Director
Since: 2013
Age: 55
Mr. Huang has been an Independent Non-Executive Director at Lam Soon since 2013. Currently,
he serves as a Managing Partner at P.C. Woo & Co., a solicitors firm in Hong Kong. Mr. Huang has
over 25 years of post-qualification experience. He graduated with a Bachelor of Laws from the
University of Hong Kong in 1982. Mr. Huang subsequently obtained a Diploma in Politics and
Economics of China from Tsinghua University in 2005 and a Master of Education from the Chinese
University of Hong Kong in 2006.

Au Chee Ming
Board: Non Executive Board
Job Title: Independent Non-Executive Director
Since: 2009
Age: 63
Mr. Au has been an Independent Non-Executive Director at Lam Soon since 2009. He has over 30
years of experience in the banking and finance sectors. He worked at a number of banks and financial
institutions. Mr. Au holds a Bachelor's degree in Commerce and Finance from the University of
Calgary, Canada.

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Lam Soon (Hong Kong) Limited

Major Products and Services

MAJOR PRODUCTS AND SERVICES

Lam Soon (Hong Kong) Limited (Lam Soon) is an investment holding company engaged in the
manufacture and sale of a range of flour, edible oils, vegetable fats and household cleansing products.
The company's key products and brands include the following:
Products:
Food products:
Edible oils
Flour
Vegetable fats
Detergent products:
Fabric softeners
Floor cleansers
Industrial marble cleanser
Laundry powder
Liquid dishwashing detergents
Liquid laundry detergents
Brands:
American Roses
AXE
Crown
Golden Statue
Knife
Labour
Procleanic
Red Lantern
Soon Brand

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Lam Soon (Hong Kong) Limited

Top Competitors

TOP COMPETITORS

The following companies are the major competitors of Lam Soon (Hong Kong) Limited

China Agri-Industries Holdings Limited

Hop Hing Group Holdings Limited
China Corn Oil Company Limited

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Lam Soon (Hong Kong) Limited

Company View

COMPANY VIEW
A statement by Kwek Leng Hai, the Chairman at Lam Soon (Hong Kong) Limited, is given below.
The statement has been taken from the company's 2014 annual report.
I am pleased to present our annual report for the financial year ended 30 June 2014.
The Group had continued on its growth path benefitting from ongoing strategic measures which
were taken earlier to produce a turn-around year in FY12/13.
Despite a slowing Chinese economy during the financial year, our Food Segment continued to
achieve growth with Flour business making deeper and wider penetration nationwide into various
markets and channels with its existing and new products. Edible Oil business established a firmer
foothold in Guangdong Province. Our Detergent Segment again delivered good financial results with
wider distribution.
Overview
The lingering unstable global economic and political environment took a toll on various commodities
as consumer confidence fluctuated throughout the year. A softer Chinese economy, coupled with
higher wheat prices and labour costs, saw margins squeezed as price increases could not fully offset
cost increases. The Group addressed these external factors with prudent procurement strategy and
continuous productivity improvement over all aspects of our businesses to sustain our profitability
during this challenging year.
With the inauguration of our new flour factory in West China at the end of 2013, our production
infrastructure is now completed and ready to position us well for growth as our market penetration
effort continues. Our continued sales and volume growth in flour improved our overall plant utilization
rate. Our Oil and Detergent factories in South China had more facility upgrades during the year to
enable us to uphold the high product/service quality and safety standards to differentiate us from
the competition.
Financial Results
Turnover increased 14% over last year to HK$4,117 million while gross profit increased from last
years HK$576 million to HK$682 million with margin improved from 15.9% to 16.6%. Group profit
after-tax was up 7.4% at HK$141 million versus HK$131 million of the previous year. Net of the
non-recurring gain of HK$28.6 million from last year and HK$4.1 million this year from disposal of
an industrial property to an independent third party, Group profit after-tax recorded a 33% increase
against last year.
The Directors are recommending a final dividend of HK$0.13 per share at the forthcoming Annual
General Meeting. Along with the interim dividend of HK$0.08 per share paid earlier this year (2013:

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Lam Soon (Hong Kong) Limited

Company View

interim dividend of HK$0.06 and final dividend of HK$0.12 per share), gives a total dividend of
HK$0.21 per share for the year.
Given the ongoing improved Group performance and continued strict financial discipline in inventory
management and capital expenditure, the Group showed a higher net cash position of HK$289
million at 30 June 2014 as compared to HK$221 million last year.
Business Review
Notwithstanding the challenging market conditions, the Group sustained a double-digit revenue
growth in both our Food and Detergent Segments. Our core brands such as Flours Golden Statue,
Edible Oils Knife, and Detergents AXE and Labour, registered healthy growth in both revenue and
gross profit.
To sustain profitable growth of our businesses, we are placing more emphasis this year on new
products and channels, and expediting our distribution expansion for our Oil and Detergent business
in our Guangdong Province stronghold as well as select Provinces outside of Guangdong, particularly
in the South China region. For growing our Flour business sales and volume we will continue to
develop a new business-to-consumer model using various distribution channels including retail and
e-Commerce. This will supplement our traditional business-to-business model in an effort to create
a bigger awareness of our consumer brands for our flour product.
Outlook
With Chinas GDP growth rate projected at a moderate 7.5% in 2014, we see reasonable growth
opportunities for our products in our Food and Detergent segments. Building on our reputation and
brands we are confident that our high product/service quality and good safety record will continue
to differentiate us from the competition thus enabling us to satisfy and attract more customers and
consumers nationwide.
To keep on growing and doing well, we remain vigilant to counter volatile material costs through our
ongoing cost rationalization, organization rightsizing, and improved productivity, inventory/spend
management, operational efficiency, and product improvements through R&D.
We plan to invest more for staff development to retain and attract talents who can contribute towards
producing quality products and best services.
With the strong foundation laid in the past two years giving us a good business platform with a
growing channel and distribution network, we are cautiously optimistic to deliver sustainable growth
in the year ahead.
Appreciation

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Lam Soon (Hong Kong) Limited

Company View

Subsequent to Mr. Lo Kwong Chi, Clements retirement from the Board last year, we welcome Mr.
Lester Garson Huang as an Independent Non-Executive Director of the Company.
As always, I would like to thank our customers, business partners, bankers and stakeholders for
their continued support and the Board of Directors for their advice during the year. I would also like
to express my appreciation for our management and staff who had worked hard and well to execute
our strategic plans to maintain our growth momentum. As we begin a new and challenging year, we
aim to fulfil once again our mission to provide high quality and safe products for a healthier and more
delightful life for our customers.

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Lam Soon (Hong Kong) Limited

Locations and Subsidiaries

LOCATIONS AND SUBSIDIARIES

Head Office
Lam Soon (Hong Kong) Limited
Lam Soon Building
21 Dai Fu Street
Tai Po Industrial Estate
New Territories
HKG
P:852 2680 3388
F:852 2680 4069
http://www.lamsoon.com

Other Locations and Subsidiaries

Gladko Industries Limited
HKG

Richly Choice Development (PTC) Limited

British Virgin Islands
GBR

Swamex Food Service Limited

HKG

Asian Dragon Limited

HKG

Jiangsu Lam Soon Flour Mills Company

Limited
CHN

Shekou Lam Soon Silo Company Limited

CHN

Lam Soon Realty Limited

HKG

Lam Soon Food Industries (BVI) Limited

British Virgin Islands
GBR

Lam Soon (Sichuan) Food Company

Limited
CHN

Lam Soon Systems Limited

HKG

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