Billion-dollar plant upgrade for Lasco
Published:Sunday | June 19, 2011 | 12:00 AM
Lasco Manufacturing Limited (LML) will invest up to US$11 million (J$943 million) in a factory upgrade that will enable it to nearly double sales by 2014, management at the public company stated last Thursday at a forum.
The investment will increase capacity at its White Marl, St Catherine factory by 70 per cent enabling it to launch new product lines.
Lasco Manufacturing is one of three divisions of the Lasco Group which listed last year on the Junior Stock Exchange. It packages powdered whole and skimmed milk, as well as manufactures a variety of soy-based products.
new products
"Lasco Manufacturing will be embarking on a very large expansion ... the size of the investment is expected to be US$10-11 million," said Lascelles Chin chairman of LML, while addressing the monthly Mayberry Investors Forum in Kingston last Thursday.
"The expansion will not only see increases in productivity and efficiency, but also the addition of new products - up to 10 product lines."
This expansion will add 70,000 square feet to the existing 100,000 square feet at White Marl, Chin stated.
"We hope to finish the first phase of expansion by April 2012," said Chin, adding that they will introduce new products for global export.
"We will be exporting to many new territories including African countries and we already started exporting to Oman."
Chin reasoned that the investment was sound.
"Why spend so much money at this time? We are conservative in our investments when dealing with your money. We are positive of the future for Lasco," he said.
" LML will nearly double sales in [the] next two to three years."
This revenue forecast would equate to J$6 billion by 2014.
debt free
Lasco's land and building has a $114.3 million net book value as at March 2011, which represents LML's 50 per cent share in the property held in trust by a related company, its financials stated. Additionally, its machinery and equipment has a J$40.9 million net book value.
The expansion at White Marl would be financed by cash flow and debt, Lascelles said.
LML held J$217.5 million in cash and equivalents at its march year end. The company is debt free with long-term liabilities listed at nil.
LML recorded J$401.2 million in net profit or a 265 per cent increase over year-earlier levels. It benefited from a 15 per cent increase in revenues and reduction in expenses, company representatives said on Thursday.