investing in agri
Investing in Agribusiness

What a Project this is!

A year after the launch of the formal Royal Spice Gardens company my original vision is becoming concrete. It's an amazing feeling. I thought I would take a moment and look back.

The original concept was to grow vanilla, although I have always had the dream that one day supermarkets across the world would stock RSG spices; all of those we grow today and many others that we are yet to introduce to market.

My target was 100,000 vanilla plants on 100 hectares, producing 100 tons of vanilla each year, worth between five and 60 million dollars depending on vanilla price. In addition, to have a further 900 tons of vanilla that we would buy from farmers whose quality we could guarantee. To achieve this, I wished to raise a million dollars for the costs through selling shares.

Circumstances and Indonesian regulations meant that I had to raise my game and raise three million dollars with the option of raising a further two, or using those stocks as wages for the quality employees we cannot afford.

The budget was simple: a million dollars to plant vanilla; a million for maintenance, harvest, curing and sales; plus a million for overheads, marketing and contingency.

In order to sell the first shares - not having a track record - I gave bonuses.  Shares sold in a trickle, not as much as planned, but this was mainly due to Covid, which not only delayed our licences by nine months, but removed many potential investors from Bali.  Viewing the plantations is the perfect convincer strategy.

The bonuses reduced steadily, which meant the shares increase in value, until the bonuses were discontinued in November. We are planning on increasing share prices during the coming months; not only because there is considerable appetite for the shares now we have proven our ability to create plantations that thrive but also to reflect the additional work and growth RSG has achieved.

After a year, we do not have the 30 hectares I would have liked, nor the 30,000plants, but we do have 15,000 plants on maybe six hectares.  Which demonstrates that my calculations were conservative in the extreme, and these plants are doing very well, despite adverse conditions with this heavy rainy season. We won't have a decent crop of our own this year, but next year we should have at least a ton or two.

My original plan had seen farmers observing us, then planting, their crops coming behind ours.  I worried about having sufficient funds to buy their crops. This part of the plan would have us acting as agents with all the risks that involves with a volatile crop.  I didn't like it, but we have to help and encourage Indonesian farmers. A year on and the solution is beautiful and elegant. Farmers who follow our method become our associates, able to call their lands Royal Spice Gardens. We don't buy their crop, we cure it and sell it for them, keeping 30%. This means we don't need a huge war chest to buy their vanilla, they make more money and we eliminate risk.

It also means that we can start selling vanilla a good three years before the plan expected, because existing farmers with mature plantations want to become associates. Which means achieving our primary objectives faster.

What are these? Obviously, the primary one is to make money, lots of it. The second one is to increase wealth in the villages.  The reason for this is to look after culture, which is our remit from SILATNAS, the Association of Indonesian Kings (why we are the Royal Spice Gardens). Ensuring this happens means we arrange Culture Schools, run by the palaces.

The final objective is conservation, specifically looking after Our Land and Sea(Tanah Air Kita), which is a powerful statement in Indonesia. We are helping directly by sharing our methods of cultivation - which turn branches and leaves into loam, the very best method of carbon capture, organically.  This isn't enough for us, and we are experimenting with breeding rare birds for release to the wild on our gardens.  The Wildlife Department is onboard for this.

Other notable successes are growing avocado in the gardens, helping to ensure we are not a monoculture.  While this is a valuable crop, our Agricultural Director, Dwitra, hopes to sell the avocado cheaply to encourage locals to eat them for an improved diet. We are fully supportive of this idea.

All in all, the Project isn't just going well, but it is expanding beyond the original scope and is getting set to really take off. We have several initiatives I am not yet ready to share, however if successful you will hear about them soon!

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