Cassava producer set to list on Lao stock market

Cassava producer set to list on Lao stock market

Local cassava powder producer, Lao Indochina Group Co., Ltd (LIG), expects to list on the Lao Securities Exchange by early next year.

The company signed a financial advisory agreement with the Lanexang Securities Company (LXS) yesterday to help with preparations for public listing.

“The preparations include improvements to the company's business operations, services, staff skills and management to transform the operations into those of the standard of a public company,” said LIG Chairman Mr Sengmaly Sengvatthana.

“The improvements will encourage local investors and businesses to buy the company's shares,” Mr Sengmaly said at the signing ceremony.

Currently the company has four business operations – a tapioca factory, a cassava plantation project, and import-export and air ticketing services.

“Initially only the tapioca factory and cassava plantation project will be listed on the Lao Securities Exchange,” Mr Sengmaly said.

The company is yet to reveal the expected price of its shares on offer in the initial public offering because it needs to establish the company's planned future expansion and investment plans.

“We will invest in another tapioca plant in Pakkading district of Borikhamxay province,” he said

Currently the company runs just one plant in Pakngum district, Vientiane, which produces 320 tonnes of cassava powder per day, of which about 90 percent is shipped to China, with the remainder going to domestic markets.

LXS Chairman Mr Vilaymith Ackhavong said “It's possible for LIG to list on the exchange because it has four business operations with good financial management.”

LXS will act as an advisor on LIG's improvements and transformation into a public company, including on how to carry out the initial public offering of shares.

The criteria for a company to list on the stock market include transparent and strong operations, making a profit for at least three years and a good operations management structure.

LIG is the second company LXS has helped to list on the exchange, following Banque pour le Commerce Exterieur Lao Public.

“We expect to have a few more local companies signing financial advisory agreements with Lanexang this year,” Mr Vilaymith said.

LXS is a joint venture between Sacombank-SBS of Vietnam and Lao Development Bank. It officially opened in last December with initial chartered capital of 100 billion kip.

LIG operates cassava plantations in Borikhamxay and Vientiane provinces and in Vientiane on a total area of 10,500 hectares, employing more than 1,220 families.

It recently received two international standard certificates from the United Registrar of Systems (URS) South East Asia Co Ltd, under URS UK.

The certificates are the international standard ISO-9001:2008 in recognition of the company's quality management system and good manufacturing practice in food hygiene.

vientiane times