The value of the company has risen, according to the accounts, from Rp38,099,065,317.52 last month, to Rp66,184,109,272.52 this month.
Of course, this singular rise in value over one month is down to the stunning performance of the management no, it is actually that shares have been invoiced during the month. Last month I did not include the unsold shares as an asset, which rather takes away from the purpose of this valuation, to show the integral rise in the value of the company, apologies.
You may wonder at the volume of the share sales. We have been talking to a large company for six months, and this month they agreed to purchase 20% of the company – they actually offered us US$5 million in financing, though we have to work out a mutually agreeable way to structure this. Naturally, they cannot just give us the money and are coming here in November to do due diligence, bringing with them their financial director.
Of greatest interest to me, the MD wishes to assist Indonesia and recognises the problems in the outer islands of shipping and freight, so he has set up an air freight business. He already has an import and distribution company in Singapore with its own cold storage. As Bali farmers have suffered tremendously with the loss of 5 million mouths, I do see a potential to find a market for some of the vegetables and fruit produced here. Most of the farming organisations have gone bust, and it is back to subsistence farming. So, this isn’t something that can be immediately restored and will take considerable research and planning. And the development of mutual trust.
Two weeks ago, we were visited by a gentleman doing lobster farming in Bali. Freshwater lobster. His business is small scale, and a few things struck me. His lobsters are actually Cherax quadricarinatus, the Redclaw crayfish of the Northern Territories of Australia. Suited to freshwater cultivation. There is a market for these delicious creatures which is not being filled, despite the technology being present and available. They are omnivores, not requiring the high protein pellets so destructive of the marine environment.
My local fish farm and fishing pools went bust in the recession, with the owner still owing the bank $20,000. Good, clean water, no pollution and too high for the biggest threat to fish farms in Indonesia, monitor lizards.
So, we did a deal. We are doing a pilot project on the fish farm to establish whether we can grow lobster there, and also giant freshwater prawns and eels. The Australian is our consultant and the local fish farmer is the manager. The plan is that in 9 months we shall know the costs and can plan properly, the pilot we can conduct within our vanilla budget. The harvest we can sell locally to restaurants and hotels.
If the pilot proves positive, as I expect, we have the entire local fish farmers association watching eagerly. We give the word and they start lobster farming and supply us. We expand our own production and we will have enough to supply Singapore, who no doubt will want a weekly shipment. That’s a lot of lobster. Longer-term, I want to see the River Dayak of Kalimantan farming for us, as they, unlike the Forest Dayak, are impoverished. This is freshwater aquaculture that we can bring to the islands.
Naturally, this is outside the scope of RSG. So, the pilot is being done under the licences of the Australian company. Should it be successful, we shall form a child PMA from RSG where RSG has 50% of the shares. Other shares will go to the local fish farm manager and to the Australian, and we may sell some for funding. I anticipate that this project will return a profit before RSG, and we can see it bringing in perhaps half a million dollars in turnover in a fairly short time, based on a $10/kg sale price. Best price would be $30. We should be able to supply a ton a week within 2 years if Singapore is interested. If not, Hongkong… So nowhere near the profits from Vanilla, but still nice and by using the association, we are able to spread the wealth.
Our usual quality concerns mean we will focus on food, stop the environmentally damaging pellets from trash fish, and develop a plant-based diet, plus good hygiene to prevent the use of chemical cures for disease and parasites. We believe we can ensure superlative taste in the fish, from the right diet. They like coconut…
The vanilla proceeds apace. We have to concede that our attempt to bring forward the flowering to overcome the long rainy season has failed. The plants are just confused. We should see crops from Gardens 1,2,3 and 4. 5 has just been changed to raised bed and enlarged, so unlikely to do anything, but 6 has produced a few flowers after just 18 months.
Gardens 15 and 16 and fully planted, with 15 in particular exceeding expectations with uniform sized vines already higher than most in Gardens 11-14. Garden 17 is almost ready for planting out, and in the nursery, Garden 10, we have 1,000 plants ready and more on the way. We have overcome an issue of time taken to sprout, by ensuring minimal time between taking the cutting and planting it.
No news yet on worldwide vanilla prices, and we haven’t yet met with the representative of the big buyers.
We are actively looking at ways of creating vanilla extract and have discovered that Indonesia’s vanilla crop is much larger than recorded internationally because much of the crop is used internally to create extract, also used internally. And under the radar of the international industry. We have agents coming to us regularly, looking to buy our vanilla, which is not for sale.
One of the advantages of making our own extract is it will give us new ways of understanding and grading the vanilla.
Next month, we should have added Gardens 15 and 16 to the valuation of the company. Not the fish farms… nor Garden 17 which may not be finished till next year. It is a huge project, with potentially 9,000 plants.
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