Shekou Lam Soon Flour Mills Company Limited is the largest foreign-owned flour processing enterprise in China. It uses the most advanced state-of-the-art technical equipment in the world and produces top quality specialized flour. With an annual production capacity of over 300 thousand tons, it accounts for more than 80% of the total flour export from the mainland to Hong Kong and 50% of the market share of flour in Hong Kong.

Mr. Jim C Tsao, Group Managing Director of Lam Soon said, “To live up to our corporate goal of producing high quality products, the Shekou Lam Soon Flour Mills has been importing top quality wheat from the United States, Australia and Canada as raw materials for production. However, as China’s pace of modernizing the agricultural industry speeds up, the country is now capable and equipped to produce good quality wheat locally. To capitalise on this development, three years ago we started to conduct research with the Agricultural Production Research & Science Department in China on the feasibility of establishing contractual plantation bases to produce high-quality wheat which will gradually replace the import of production raw materials and enable wheat production and flour processing to be combined to increase operations efficiency.”

Since then, Lam Soon has conducted a series of research experiments in different locations of China and finally signed cooperative agreements with the Agricultural Bureau of Heilongjiang and the Agricultural and Science Faculty in Shandong Province to establish high-quality wheat plantation bases to produce good quality wheat in large scale. This year, the two bases have reaped their first good harvest.

The Agricultural Bureau of Heilongjiang is currently China’s largest grain production group and the biggest government-operated agricultural production organization with the longest history. It has strong agricultural production and research capabilities. The Bureau has made significant achievements in the past including the establishment of new production mechanism, introduction and development of new technology, as well as growing new products. The cooperation with Lam Soon this time is one of the successful examples.

“The harvest from these good-quality wheat production bases is a milestone for LamSoon in our efforts to establish a long-term and stable raw materials production base. Moreover, it realizes our wish to use China home-grown raw materials in to produce world-class, high-quality flour,” Mr. Tsao added.

“By choosing the quality wheat from China while maintaining the same high quality standard as before, Lam Soon will be able to lower the production cost and become more competitive in the marketplace. This will ensure our leadership position in the South China market as well as enabling us to achieve high profit growth,” Mr. Tsao said.

With China’s pending entry to the WTO, the country’s agricultural industry is facing severe challenges to open up the market to more and more foreign products. In order to adapt to the drastic market changes and increase the competitiveness of China’s agricultural and food industries in the world, China must speed up the industrialization process.

The Lam Soon (HK) Ltd. was listed on the Hong Kong Stock Exchange in 1972, and the Group’s subsidiary, Lam Soon Food Industries Ltd. was subsequently listed in 1991. The Group’s main business operations include flour, edible oil, canned products, detergent products and frozen food. It is also actively developing the vast potentials of the China market. The Lam Soon Group is financially strong with total assets over HK$2,000 million.