The vanilla is doing well.  We had a flush of harvesting of poor quality beans that weren’t developing well, but the vast majority are looking very good and maturing nicely.  We don’t really expect to start harvesting until July.

The orchid vines are doing well, lots of new growth to create flowers from September and next years harvest looking good.  We continue to experiment with ways to grow the vines.  We wrap some trees with coconut husk, place complete husks around the bottom, dig ditches.  We are also continuing to experiment with new support trees, butternut being the preferred option.  I do want more double crops, or even more.  We are planting cassava in the rows and harvesting jackfruit and durian from the plantations.  It’ll take a while for the avocado to fruit.

We didn’t have the funding to buy the first harvests in Bali from other farmers, and I think this was a good thing, as they harvested poor quality early.  We are ready now and have established a system where we pay 200k for top quality, 20cm+, yellow beans, 150k for the same but under 20cm, 100k for yellow beans not so fat, and 50k for vanilla that has been harvested in bunches, not individually.  This is twice what farmers in Java are getting.

We have started using the warehouse to process the vanilla – having bought 25kg plus our own, there is no room at the Café.  We are finding a sub-grade in the vanilla, it’s meatiness, or lack thereof.  I am of the opinion that this is the difference between green and yellow vanilla.  We are currently grading the vanilla when harvested and time will tell whether this is correct.

The café is already breaking even, and establishing a reputation for very good food.  We have redecorated partly and installed furniture, still some way to go.  But right now, I’m interested in setting up the shop.  This is vital.

First, it is going to sell our vanilla.  We are selling it in small quantities at a good price. Still working on packaging.  Next step we shall be selling caviar, the scraping from inside the pods.  Some people sell paste and I am not sure if we shall follow suit.  Too easy to make an inferior product.  We need the warehouse established before we start making extract.

Second product in the shop is chicken liver pate, which we make and enrich with vanilla caviar.  It’s very good, but with a short lifetime.  We are selling it in jars sealed with butter.  If not sold within 2 days, we eat it!

Third product is butternut paste, the ripe outer rind of the butternut.  This is delicious, a great accompaniment to cheese and pate. We are putting them in small jars.  We have a very limited supply, but it lasts a long time.  We are busy planting more and more butternut and can expand this when the harvest catches up.

We are working on our syrup, which while delicious, has a problem with ingredient supply, in that it is very hard to get the raw material pure.  It is usually adulterated.  Taking time to persuade farmers exactly what we want.

Another product that we are working on is a unique sambal, using peppers.  We need to decide on the final recipe.  We are experimenting with making chocolates after being horrified at the cost of Ferrero Roche!  Our bacon is eaten too fast to be able to sell it, but we’re trying to get stock!  We also supply papaya leaf juice made to order and we are making virgin coconut oil, so why not sell that?

We have long searched for suitable other products that we can farm.  The lobsters are proceeding slowly, and we have recently received our first order for blue lotus.  This is exciting, because blue lotus can be grown in the lowlands, thus offering farmers a good income for an organic product.  We are planting it in the lobster ponds, a challenge because the lobsters love to eat the roots.  Needs careful rotation!  We will also buy the flowers from other fish farmers.

Beginning of June will see the display cabinet in place and then the shop will stock products from other high-quality suppliers, including Made Teas, Rose Petals and Bali Honey.

On the investment front, we have seen increased investment last month, Rp 400 million, with more intentions.  We have been approached by two organisations offering us large investments, but both wanted us to pay them money up front, which is ridiculous and a serious red flag.  Somebody can go around the world offering investment, and live very well off the down payments without ever providing any funds.

We are still discussing with a Jakarta investment bank, who remain interested, and we have a UK investment specialist who want us to create a real estate branch so we have asset backing for investment.  We are exploring this idea, including possibly have an eco-lodge on the gardens.

Other offers continue to come in and are being evaluated.  It is a sad indictment of modern times when the majority of offers of investment prove to be potential scams.

Prospects:

If investment continues at the current pace, next year we shall be making small amounts of money and be able to make a very small dividend.  If we receive a total of another 5 billion rupiah, the dividend will be respectable, because we shall be able to buy a lot of vanilla.  This is perhaps more likely than not, but I emphasise that next year’s dividend depends on the amount of investment we get this year.  5 billion rupiah of green vanilla should sell for at least 20 billion after processing using our methods.  Theoretically, if we receive 10 billion, we would pay a very nice dividend of over 30% of investment, possibly a great deal more.  However, I doubt if we would be able to buy enough green vanilla and buyers are unlikely to trust us enough to buy it all this year.  It takes time to develop good relationships.

If we decide to build the eco-lodge, and get the investment for it – very likely – that will have a profound effect on the bottom line and the dividend.  We would not do this venture without suitable partners and we are in discussions.

In the longer term, as we build up our stocks of cured vanilla, so we build up our assets and the value of the company.  Next year we shall harvest maybe four times this year’s harvest, plus have the war chest to buy more green vanilla.  Plus, we should have our first associates, which gives us more stock.  We are already experimenting with the methodology to keep all the vanilla identified as to its origin.

Rex Sumner