Sino Agro Food Inc (fka SIAF)

[RealDutch]

Article by Gustav in Sweden.

http://gustavsaktieblogg.blogspot.nl/2015/09/vaga-vagra-sino-agro.html

Translated
https://translate.google.com/translate?sl=sv&tl=en&js=y&prev=_t&hl=en&ie=UTF-8&u=http%3A%2F%2Fgustavsaktieblogg.blogspot.nl%2F2015%2F09%2Fvaga-vagra-sino-agro.html&edit-text=

Apparently people still don't understand about SIAF's competitive advantages. So I would like to respond to that article. And then maybe someone can send it to Gustav or alert him.

So let me do this one more time.

SIAF's competitive advantages.

1) SIAF is a consultancy firm. They construct prawn farms. What these firms usually do is, they offer a solution that is expensive (whatever a customer is willing to pay) and above all, it has to be "pretty". Preferably, a bit too complex, etc.

SIAF OTOH acquires a stake. They manage and operate the farm, and generate revenues from it. So there is an incentive, a drive, to provide a low cost solution that is really efficient.

2) So SIAF, as the operator, has the ability to tweak the system, and optimize it. When you buy an off-the-shelf solution, OTOH, as a customer, you do not have that ability. What you buy is what you get. Or if you really want to optimize it, there are a lot of additional costs involved since you have to hire that consultancy firm again.

3) And here is the proof. In 2007 SIAF reduced the cost of an APM by 50% and almost doubled capacity. After that, they never sold another license again. Surprise? No, read point 1 and 2.

4) So we are now using the 13th version of the technology or whatever, and the optimization process continues.

5) You can't just grow prawns indoor. You need a lot of experience because it is a complex process. Again, you need to learn through trial and error, and have the ability to tweak the system.

6) The Las Vegas indoor prawn farm, which has a capacity or efficiency of close to 60% or 70% compared to SIAF (see my earlier points) has to buy their fingerlings. SIAF produces their own. Which means lower cost. And again, you need a lot of expertise here. On top of that, the new Chief Scientific Officer will play with selective breeding, improving efficiency by another 20%.

7) Same applies to the sell-side. SIAF is fully integrated.

8) Mega Farm = Economies of scale.

I can probably go on, but let's leave it at that.