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LSS aggressively diversifies
While some shareholders of Lam Son Sugar Co (LSS) are expressing concerns about the company's seemingly unfocused investments in such areas as real estate, tourism and rubber plantations, Lam Son Sugar president Le Van Tam is telling investors that these sectors offer great profit opportunities that are not to be missed.
Real estate holdings also had a strong linkage with sugar production, Tam said in a meeting last week.
"Acquiring land use rights from farmers will assure a stable supply of raw materials," Tam said, saying the company had targeted spending VND500-600 billion (US$23.5-28 million) to acquire holdings of 10-12,500ha between now and 2015. "If we don't actively invest in this area, our source of sugar cane will inevitably be affected."
Lam Son Sugar has also proposed to the Thanh Hoa provincial People Committee that sugar cane be cultivated on an additional 4,000 to 5,000ha of the province's lowlands to facilitate transport and reduce costs. In return, Lam Son Sugar would reafforest 4,000ha in the province, choosing rubber trees as a substitution.
Thanh Hoa Province also offered high potential for tourism development, Tam said. Lam Son Sugar currently owns a 45-per-cent stake in a travel agency in the city of Thanh Hoa.
Under its strategy through 2020, Lam Son Sugar would evolve into a diversified group operating in agriculture, industry, services, tourism and real estate, which sugar, biofuels, power generation and tourism as the pillars.
The company plans to invest around VND10.8 trillion ($507 million) in its expansion plans through 2015, raising funds through the issuance of convertible bonds, bank financing and joint ventures. Its roadmap for growth includes plans to increase charter capital to VND650 billion ($30.5 million) by next year and VND2 trillion ($93.9 million) by 2015.
Tam pledged to shareholders that the company would ensure the effectiveness of investments and would pay annual dividends of 25 per cent.
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