Well, this has been a rip-roaring month.  First, we determined just why it has been raining so much, and I’m angry at the lack of reports on this.  Second, we were finally visited by a vanilla expert who wants us to process in a completely different manner, and finally we have been contacted by a potential investor who will put in sufficient money to get us back on track and get you a substantial dividend next year – if it happens.

So, why has it been raining?  We have been blaming La Nina, but that begs the question as to why 3 in a row.  The answer lies in Tonga, where a massive underwater volcano erupted with the biggest eruption in recorded history, probably on a par with Krakatoa.  It put out four hundred tons of sulphur dioxide into the atmosphere, which indeed causes cooling and cooled the Southern Pacific sufficient to start La Nina.  But at the same time, it put 146 MILLION tons of water into the atmosphere, which is causing rainfall all over the planet and will cause increased rainfall for ten years.  And there was little news about this important event.  If we had known, we could have acted earlier.  The scientific press discusses it in detail, but not the mainstream media, which is criminal.

https://en.wikipedia.org/wiki/2022_Hunga_Tonga%E2%80%93Hunga_Ha%CA%BBapai_eruption_and_tsunami

Fortunately, we have already taken steps to ensure we won’t be caught short again by putting drainage canals throughout the plantations and changing the compost.  This is working, with the vanilla responding well.  We have also increased the height of the shade trees, to increase rain protection and to faster remove water from around the roots.  An immediate side effect is the vastly increased girth of the vines, greater strength to the plant and at the very least a doubling of yield per plant.  We are confident of your vanilla being proof against any new rain problems we get.

At the beginning of the month we were visited by Gianluca Fusto from Milan.  Gianluca is a vanilla expert Masterchef, recognised in Italy and France and advisor to the largest French importers.  He loves our vanilla, and has requested we change our processing method to produce vanilla especially for him and his associates.  We are experimenting with this and will be sending him samples for evaluation.

This is exactly filling the void between end user and producer that we planned from the beginning.  I am particularly excited that he wants something different to the way it has always been done.  Spices are dried to a crisp so they can survive 3 months in the hold of a ship.  And it hasn’t changed in 500 years.  Yet fresh spices are often better and certainly more flavourful.  We know that half way through drying, there is more vanillin than by the end.  So, we are excited by his new curing process and calling the results Royal Gianluca grade.  However, we have encountered a challenge and difficulty in production, which is that he wants vanilla with 40% moisture.  This should be simple, checking each batch by weight, until you realise that each wretched bean dries at a slightly different rate.  Therefore, we shall be experimenting until we can tell by feel and sight when it reaches 40% and confirm this in the lab.

We have also received our first order from McCormick, the biggest importer in the world.  It is only a tiny order, and again it is with a different and complicated process requiring refrigerated shipment, but we hope the start of bigger things.

Now, obviously when you process vanilla, there will be different grades, and we want to sell top quality.  So what do we do with the poorer quality and over-dried beans?  We will turn it into vanilla extract.  We have located a professional, and of course the first thing he does is complain that he wants the best quality to make the best quality extract!  That’s not a problem, we can create all sorts because there is always a market for every grade of vanilla.  We just don’t want to put our name or export low quality, but we still need to sell it.  Thus, we are experimenting for the different extracts and will have some results next month.  Being able to extract vanilla and sell the extract gives us a huge domestic market as indeed does Gianluca grade.

The vanilla has continued to be confused by the weather and start flowering early.  We have three people whose job is to pollinate every morning in Kulub alone, and they are putting in a good shift, which foretells a good harvest next year.  Now, with September in sight, the vanilla is sprouting buds in earnest.  Not just from our expected thick branches which have been pruned, but from unexpected branches, up as well as down facing, and with the extra numbers per branch that we hoped for better yield.  We are even getting flowers on young vanilla which has no right to flower, yet is big enough that it won’t damage it.

We are harvesting our own vanilla, slightly hampered by the lack of black lines forming on our clone, so we have missed a few.  The quantity isn’t great, but perfect for experimentation.  Yet we are getting orders, so we are starting to buy up local green vanilla to process in the Gianluca method.  The Italian restaurants in Bali are very interested…  we have already sold one small pack of it to Primo Chocolab.

We have demand for this vanilla, and want to buy more, but we are restricted by lack of investment.  This Augustwe received Rp192,111,433, total investment in 2023 = Rp1,274,873,067 and total investment so far = Rp9,267,680,887.  We need more cash!  Through the La Nina years, we have been working on getting in operating expenses, rather than investment capital.   But now we need to motor a lot faster.  We need refrigeration space for the Gianluca grade and we need capital to buy vanilla.  The difference in results for you the shareholder is interesting.

If we continue to raise only operating expenses, we forecast the first dividend of $17 in 2025.  If we can raise the two million we would like, this covers not only buying vanilla but also setting up the factory with a laboratory and our own electricity generation in the waterfall on Garden 24.  And results in a forecasted dividend of $50 per share in 2024.  We might be able to do that with one million, but with two it is much more probable.  Part of the expenses involves setting up Buying Stations in Java, Sulawesi and Flores to get sufficient vanilla.  Even with half a million we can buy enough green to make a dividend next year, but it is all down to getting sufficient investment.

We have been poor at chasing investment for the last two years, but the joy of getting so many blooms and seeing the vanilla doing so well has reinvigorated us.  Very shortly we shall finish a new business plan to cover the new situation which will be incorporated into the prospectus and available on the website.

Lobsters

We are still struggling with of the young lobsters and are now considering this as a separate division with it own staff and accounting etc. Still have plans for a cafe at the main site and expansion into other villages. Multiple buyers are still interested when we crack the code. The profits will still be RSGI's.

Administration

Paul is still finishing our business plan for 2023 (Q4) and beyond. This will be presented this week to several interested parties who are looking at significant investment which should fully finance our CAPEX and OPEX for the next 2 years.

Rex Sumner