Just came back from the SIAF presentation.
Overall a good feeling. Solomon was in a good mood and seemed relaxed, had his family with him.
We were given a booklet in the beginning with the usual SIAF stuff, numbers, divisions, revenues, economic outlooks etc.
Instead of a PP presentation Solomon talked about the company's history, it's current position and the future. He held a pretty short presentation allowing for Q&As from the conferencier thereon after.
Here are a few picks of what was somewhat new to me:
Targeting 300 000 head of cattle for SJAP 2017. The big issue as I perceived it with SJAP is human resources. For all slaugther and deboning they are in need of a lot of workes to process that kind of meat and training takes time, something they are lacking atm. But, important here is that he seemed confident in the ability to solve this, possibly through a partnership or similar, even though this was not explicitly stated (own thinking).
Furthermore he was asked about a possible spinn-off of SJAP, something he said would come probably in 2017, but emphasized that the timing needs to be right, value wise.
Reg. the new distribution center, they have found what Solomon referred to as a "white piece of paper", the market of chilled meats. This is a market in strong demand according to Solomon and something we are about to tap into which is right now relatively unexplored. In the new center they will be using a superior refrigeration technology allowing them to defrost meats through static electricity resulting in chilled, still fresh quality meat within 8 or 12 h, something very hard to perform with normal technology. They are then able to hold the temperature at a chilled 0 degrees from the centers to the stores.
More on the distribution center, the center was explained as another "demo" unit, targeting five in total throughout China.
He said that e-markering was a great opportunity here with reference to the strategic locations of the distribution centers.
Moving on to the talk on the Tesco relationship. Seafood is to be added so that Tesco stores can start being equipped with live and fresh seafood. The conclusion was made that the stores running right now are also to be viewed as demonstration of concept. He there and then referred to how manys stores Tesco had nation wide, and more importantly so, Vanguard, which is to be viewed as the ultimate partner.
Reg. the Mega farm. He stated that about 50 % will be prawns, the other half from other fish, eels and aquatic animals.
In terms of prawns he also spoke of the different types they are growing, apparently "glass prawns" takes two weeks faster to grow than the Mexican White or the other one, not quite sure. He stated that glass prawns were the future.
Said the Mega farm would be self-financing after initial investments of the first 200 000 0000 $. Is that even possible?? Would be awesome. But nothing was mentioned on a possible equity stake. Explained our roll as the contractor, nothing else atm. The ramp up of production for the first 2000 MT are targeted to begin in march/april next year.
Reg. the procurement of the 60 MUSD financing for the investors he thought it would be no problem after being able to show amble production at the unit.
Over to the stock. He said pretty straight forward that they wish to leave the US and that they are targeting Sthlm and putting a lot of effort on this. I got a positive feeling from this discussion, almost as if he is expecting positive news soon on this matter.
Moreover they spoke of an possible equity sale of the HU, but this wasn't on the agenda. They were more in the thinking of expanding the Immortal vegs.
He also spoke quite a bit reg. the China-Aussie free trade agreement, but nothing new here, rebranding our cattle breeding with the aim to target the premium segment of the rising middle class.
Madagascar is progressing fine, they are sending a management team down there to streamline and development the imports from there. There he simply said that there are things we can produce better/more cost efficient than them and vice versa why the relationship makes economical sense.
Cash flow positive per Q1 2015 in accordance with the five year plan which has already been commmunicated.
Oh, yeah, almost forgot that the company is working hard on further financing. This made very clear and Solomon stressed the importance of good terms.
Overall a good feeling, especially about what is to come. Solomon seemed confident in that there are good news coming, but could not be explicit.
/R
