Once that source of income disappeared in the early 1980s, the firm turned to the lucrative paper mill market.
Now, with the decline of that industry, Lamond's grandson, Alastair, is leading the 90-year-old firm through yet another period of diversification.
And this time around he is being forced to find a new target market against the backdrop of the economic downturn.
Inverkeithing-based L&M manufactures gears, creating parts for industrial machinery in a range of sectors.
While the collapse of the paper-milling industry was a blow for L&M, the company soon picked itself up and has moved into new areas – particularly the oil and gas and steel industries.
Lamond, whose 80-year-old father Douglas is still involved with the company, is pragmatic: "We've been through other recessions in the past and have had to work our way through this as well."
The company, which employs 34 staff, has become adept at "reverse engineering" damaged parts for unusual machinery.
Lamond explains: "One of the things people often do in a recession is to repair equipment rather than buy new.
"Sometimes people can't easily get the part for the original machine and they need us to work out how it was made and create another one. Often, especially now, the company which originally made the machine and the part has gone out of business – or in the case of older machinery, the part is obsolete."
He adds: "We are doing a bit more of that kind of thing – it has just been more in demand. That has been the case in previous recessionary periods too."
For a small firm, L&M has some big-name clients on its books – among them the Textron businesses acquired by Jim McColl's Clyde Blowers last year.
And in a bid to spread its risk amid the credit crunch, L&M recently secured its first transatlantic contract with a Houston-based oil services giant. The initial orders are fairly modest – around 100,000 – but Lamond believes the deal could be the start of a fruitful relationship.
Lamond is proud that he is one of few manufacturers not forced to cut back on either staff, or his workers' hours.
Many manufacturing companies have been forced either to axe huge swathes of their workforce, or force staff to cut their hours to four day weeks.
"We have not needed to make cuts," he says. "We have pulled back a tiny bit on overtime hours, but we are still doing some overtime and the regular hours have not changed.
"Our employees are seeing what it going on at other companies in the area and are pleased to be working here."
In the past six years, under Alastair Lamond's command, the company has more than doubled its turnover – from 1.6 million to 3.5m.
He puts the growth down to investment in his company – something he says he could not have done without the backing of his bankers, Royal Bank of Scotland, which, through its asset finance division Lombard, helped L&M acquire a 500,000 gear-grinding machine in December last year.
While he is realistic about the current climate and does not expect his sales to continue growing at the same rate, he is not expecting them to fall either. The company predicts the figure will rise marginally to 3.65m in the 12 months to the end of April.
"If we can maintain the present level, we will be content with that," he says. "At the moment, we can see around three months of work ahead of us, which is quite normal. However, there is obviously a degree of apprehension as to what the second half of the year will bring."
In expectation of a slower 2009, L&M has brought in a number of ingenious cost saving measures.
In an inventive move which Back to the Future's Doc Brown would probably be proud of, Lamond decided to utilise excess heat generated by one of his pieces of machinery to heat a chilly part of the workshop.
"It is a cost-saving measure as it means we can save on heating," he explains.
And although the pound has plummeted in value against the euro, Lamond has cast his net wider and has managed to source some cheaper raw materials from mainland Europe.
"Traditionally, it has been too expensive to ship steel and other materials from Europe, but now, the costs have dropped massively and we are saving by getting our supplies from there.
A recent shipment cost him 2,500 from Germany, but the best price he could find closer to home was double that.
"It was a surprising find," he admits. "That door just wasn't open to us until recently."
And opening closed doors seems to be something Lamond is good at.