Replies to post #4783 on Sino Agro Food Inc (fka SIAF)

[Florinda]

"There's no reason SIAF has to wait for the demonstration fish farm to sell fish before signing any contracts to build new ones, right?"--Treit

I can't answer for Chad, but I would find it extremely unlikely that SIAF itself would feel they have to wait for these milestones to be reached to sign new fish farm construction projects. However, waiting for them could foreseeably put them in a position where they could negotiate better contracts. Yet the impression I got yesterday is that it's not SIAF but the four would-be partners who want to wait for the fish farm to prove itself before going ahead with things.

To my way of thinking, this is a prudent move on their part. Likewise, waiting till the fish to sell can tell them a lot about their long term prospects. 500 tons of fish is, it seems, quite a lot to move. I suspect SIAF management will work from the beginning to find large buyers. But this could take some time. So I suspect a would-be partner would want to know how long it takes to empty their fisheries since this will directly bear on how fast they can start the cycle over again. Presumably as this method gains acceptance among fish buyers, they'll be able to move them out in larger and larger blocks. But initially they might have to settle for selling 2, 5 or 10 ton lots to a lot of different buyers. If so, this could slow operations down.

Obiviously, I don't know. But Solomon's final comment to johngalt's last question (post #4771) implies this. Here's what he said:

"... the key to success ... will be to consolidate our marketing and distribution network."

Again, if I put myself in the shoes of a fish buyer, I suspect I would not be willing to place a huge order to buy artificially grown fish until I was sure my customers really liked the taste of them. For the reputation of my store is at stake, let a alone a hefty outlay of cash on my part.

I would think a would-be partner would have to understand that it will take time to establish the kind of networks Solomon is talking about. Nonetheless, I would think some of them at least would want to make sure the pilot farm can in fact sell a full harvest and see how long it takes.

Steve