That is correct. We provide fertilizer on credit which is offset against the crops we buy from them. Then, we provide the feed on credit which is offset against the cattle we purchase from them. We help the farmers and the government helps us by letting us use the land for free. That's the SJAP model. There is nothing mysterious or special about this. In the grand scheme of things it's just a tiny amount especially with the abattoir up and running.
The "issue" is whether the debt is collectable. And so far there hasn't been a single farmer who was stupid enough to sell his cattle to someone else :-)
These credit terms are nothing special as it happens with HU-flowers, fish, beef and all the rest as well.
The credit terms for our JV partners are usually very tight, meaning they have 30 days or 60 days to pay up. We also get some "upfront" money when we license our RAS-technology to them.
SIAF doesn't have any collectability issues, as is the case with YONG for instance. The reasons have already been discussed. Because there is no inventory build up on the client side when you are selling live fish or fresh meats. If the JV partners don't pay up then they don't get their 75% stake, simple as that.
Yes, A/R will go up especially if you are growing fast. We get good margins in return. We get to use land for free provided by the government.