Lots of little bits of good news and a little bit of solid progress.

Phase 1

The vanilla is flowering so profusely, we need double the number of pollinators to last year.  This is a good indication that next years crop will be MUCH larger than this years 1.5 tons, plus we are applying what we have learnt, so we are expecting much higher quality.

Our workers have improved and become very capable, to the extent that I have very little to do with the growing now, Agung Jaya is the capable manager, ably assisted by Karyo and Suena.  As well as pollinating, we are opening two new gardens.  This takes much longer than previously, although we have a much lower density, because we are putting in stronger host trees which we expect to deliver secondary crops.

Plenty of cacao and coffee, robusta, going in, plus Moringa and Butternut.  The Butternut planting will ramp up next month when the latest harvest comes in.

Phase 2

No new farmers, and not expecting any till next year, when we expect a flux, because we will have a better idea on pricing and can pay more.

Phase 3

Our legal advisors want us to start a co-operative now, for which they forecast government assistance in due course.  We are discussing this as to the best way to proceed.

Phase 4

The second restaurant to test our vanilla has come back to tell us they love it and to buy some.  The first has also come back asking how to buy, but hasn’t actually bought.  These are small quantities, but steady business.

The test samples we exported have also been well received. Japan has expressed the idea they will want regular purchases, but not bought more.  It is frequent that our vanilla proves stronger than expected so they don’t order as much as they anticipated at first.

We have decided to delay the launch of the extract, for the simple reason that it gets better the longer we leave it in solution.  We anticipated one month, but it is so much better after 6 weeks that we are going to see what it is like after 3 months.  Our big buyer has officially delayed their purchases for a month as they seek new offices, but we are not holding our breath.

Recruiting a sales team is proving more problematic, as the best people prefer to live in the bright lights far away in Seminyak and Kuta.  Once I am happy with the extract, I will start the sales myself.  Before that we need BPOM certification, and we have that in hand with the new legal team.

Phase 5

We have fired the agent getting us the certification for the factory and are proceeding to get it done ourselves.  We are waiting for  the copy of the land certificate that we need.

Lobsters

With the start of the rainy season, we are getting good growth of the essential weed.  More pregnant lobsters in the hatchery.  We harvested 115 lobsters last month.  Experimenting with nauplii as a food for the baby lobsters.

Blue Lotus

The lobsters got into the growing pond and ate all the immature plants… back to square one!

Vanilla Syrup

We are learning about harvesting the sap.  Our requirements are slightly different to that of the alcohol makers, and we have discovered the importance of frequent harvesting rather than once a day.  Leave it too long and there is a bitter taste.  Everybody wants to buy it!  Huge demand for this product.  But we need BPOM and we need to know the shelf life.

Pineapple Vanilla Jam

This is a new product, which our chef made with some leftover pineapples.  We used it as a filling for cookies, to give away with coffee.  The very first customer immediately insisted on buying a jar.  So, we have a new product.  Again, we need to work out shelf life and obtain BPOM.

Agarwood and Oud Oil

It looks like we may need to start planning this!  We have a potential investor who can also supply expertise for this project.

The Royal Spice Café

Our defacto factory at present, until the factory is complete.  September started off really well, but tailed off.  Tampaksiring is growing steadily, and we are keeping the café small and secluded.  The staff can handle small numbers, not yet ready to take on lots of people and they are busy making product most of the time. The shop sells vanilla, caviar, extract, bacon, jam and cookies at present, and is our most profitable means of selling vanilla and vanilla products.  We need to expand the sales, which means more visitors.  We are monitoring it carefully to see when we can afford to have somebody who can do the promotions and events.

In two days in November, the Café took in over Rp 8 million, so it is possible to turn it into a profit centre.  However, it needs promotion, events and more staff…  this growth has to be carefully controlled.

Investment

Investment for October was nil, keeping a total of all investment Rp 11,723,973,210.

We are expecting two different large investors to site visit this month.

P&L September

Financial Outlook

We are in the process of appointing Malekum Hukum, a large legal firm in Bali, as our advisors.  They will ensure all our activities are correct and they will arrange BPOM for all our products.  Once this is complete, we can start selling.  This means we must tread a fine line between selling products that do not require BPOM, building up production facilities and building a sales team so we can start to make money.

We must also consider whether to keep all activities within the company or to establish a number of subsidiaries.  We definitely need a separate co-operative, possibly a charity, and maybe each activity needs to be a separate company.  Malekum Hukum suggest this as a better route, because of Indonesian regulations with activity licences.  Currently, the café is licensed through ARMA Resort and Museum, for example,  and it may be better to have a Café division.  All this is being considered.

While we could easily sell our cured vanilla, at a fair price, it is worth so much more when turned into product.  We probably have another two months before we break even.

Corporate Social Responsibility

We have received a donation of Rp 10,000,000 from a gentleman who wishes to remain anonymous.  We are using this to build a breeding cage and purchase our first pair of Bali Starlings, along with the license.

We have verbal agreement with Reforest Now! which is an Australian charity for them to receive donations on our behalf, thus allowing the donor to obtain tax relief.  Reforest Now will then pass the donation on to us.  Our lawyers are checking the best method for us to account for the donations, which may require us to oversee a foundation or charity.

Why are we accepting donations?  Because we have been talking about our CSR program, but we cannot advance it until the company is making money.  Some people wish us to start the programs!

Rex Sumner