ANNUAL REPORT 2006 : Lam Soon (Thailand) Public Company Limited
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Message from the Managing Director
After a difficult 2005 with low profit margin, your Company recovered strongly in 2006. Total revenues improved slightly from 5,155 million Baht to 5,374 million Baht. More importantly your Company enjoyed much better net profit, from 54 million Baht to 229 million Baht, increasing by 175 million Baht, or over 300% thanks to nationwide increase in crude palm oil (CPO) production from 2005 which in turn led to the decrease in CPO price. Your Company recorded a decrease in average selling price of 8.47%. Sales volume, on the other hand, increased by 10.10%. Gross margin accordingly increased from 7.39% in 2005 to 12.37% in 2006. Furthermore, with the lower average market price of fresh fruit bunch (FFB) in 2006, its plantation subsidiary thus could increase both its purchase of FFB from outgrowers and its own crop. FFB processed in 2006 was consequently 85.91% higher than in 2005, while cost of sales declined from 70.01% in 2005 to 65.73% in 2006. Such success would not have been possible without the professionalism and dedication of Lam Soon’s working staff. Your Company is determined to maintain its leadership in this industry. Equal importance is attached to managing and attending in every step of production process, the development of products to satisfy customers and consumers in various aspects of nutrition, hygiene, as well as concerning of social and environment responsibility. Manufacturing In 2006, the Group invested to improve and to expand the production capacity of various BOI plants namely:- production expansion project of its CPO crushing mills in Trang and Krabi. - oil palm seed propagation project of its subsidiary at Krabi. Approval has been given to your Company by the Board of Investment (BOI) to commence the commercial operation of margarine and shortening plants since 4 September 2006, increasing its capacity by 27,360 tonnes per year. The said project has been automated with advanced equipment to enhance the efficiency and achieve cost saving, and produce high quality of product. Your Company continues to maintain and develop international quality standards consisting of GMP, HACCP, ISO 9001:2000, ISO 14001. Your Company is in the process of being certified by the Industrial Standard 18001 which is the safety and professional hygienic management system, covering ways to reduce and control risks for working staff and those concerned, including possible impact to adjacent community. It is expected that your Company will be certified in the middle of 2007.