We are in the process of revising our prospectus, to better show what we do, and to better evaluate the company.

I was asked for a more precise description of what we do, and my response was: “We are social engineers, using the power of capitalism to better the lives of the people.  We do this by focussing on high value agricultural products that can be produced by farmers.  We ensure proper quality and international markets, thus bringing greater returns to the farmers.  Currently we have two active projects and another about to start.  The first one is vanilla, the second aquaculture of freshwater lobster and the imminent one is the processing of agarwood to oud oil.

One issue that has always bothered me with these high value products is just how much money can be made.  I worry that we are not believed, with good reason, for even when I am conservative and forecasting 25% of reality, I am told it is exaggeration.  So, I created a spreadsheet with realistic values, rather than marked down ones.  One gentleman promptly told me I was still far too conservative, and he, as an economist specialising in agriculture, ought to know!

So, let’s recap where we are.

VANILLA.

We have just under 26,000 plants in 17 gardens dotted around Bali, with an 18th garden under way.  This represents just over two million dollars of net revenue per annum if the price of vanilla is $100.  Currently, it is $265. Furthermore, we aim to plant another 15,000 this year.

We have come through a second torrential wet season, even worse than the preceding year, with all plants intact BUT a number are much reduced in size, particularly those we had trained up to crop.  The problem is that when ready to crop, the branches are so close together, there is not enough aeration.  Our attempts to bring forward the flowering season did not work at all, though we are seeing plants starting to flower now after the rains.

We respond to this in two ways.  First, we are changing the training of the vanilla plants to be more lateral spread and training the shade trees to support this.  Secondly, in our projections we are taking into account the El Nino Southern oscillation, which previously disrupted weather patterns every 18 years, and now forecast this to happen every 6 years when we will get no crop at all.  In actual fact, it will probably be further apart, and we will get something… and the price of vanilla will go up.  There is a shortage imminent this year.

Our home-made compost programme is showing excellent signs of success, and the gardens which have been upgraded from single trees to raised beds are over the shock and developing well. We will add composting to all future gardens. Paul is starting a process to record the coordinates of each garden. And will also review our stocktaking method to forecast yields per square metre rather than per vine.

LOBSTERS.

We have just had our first births!  Babies doing well, as are all the lobster.  We have survived cloudburst and muddy water, and the lobsters are doing well.  Our biggest lobster weighs 85g and he looks huge.  Plenty of people farming these lobsters here in Indonesia, but few growing them to any size.  Usually sold at 40g.  We aim to not sell below 100g and then have them available in increasing weights, and see where we go.  Time doesn’t really mean anything here, we can grow them as long as we want.

We are still plotting the growth curves and comparing feedstuffs, and this will be an ongoing process forever.  We have a slight problem with the Black Soldier fly larvae.  The maggots sink, and are eagerly devoured, but the pupae float…  which means the lobsters cannot get them.  The trouble is, Black Soldier fly automatically leave the compost to be collected when they become pupae, so it’s just a matter of grabbing the bucket that collects them and tipping them into the ponds.  But the maggots must be pulled out of the rotting compost first… unpleasant job, but it doesn’t seem to bother anybody!

OUD OIL.

Collecting wild Agarwood is illegal and rightly so, except by indigenous tribes.  We plan to set up a factory processing the wood which we shall buy from farmers who grow the trees and also from indigenous tribes.  The price per kilo is extremely variable.  My grandfather in law grows it, and exports to Korea at $1 per kilo.  Very light, only a little oil in it.  We really want to know a great deal more about the industry, so we will be experimenting with very small budgets at first.

ADMINISTRATION.

We need to redo the AKTA again, with more shareholders.  We started advertising for more shareholders on Facebook and Instagram, and this has already brought in nearly 250 enquiries and downloads, a few of which have immediately signed up.

One enquirer brought with him a business and investment expert to look over the company as part of his due diligence.  This gentleman was sufficiently impressed that he wished to become involved, and his company, www.southeast-consulting.com, is now handling our finances and in due course we expect Simon Crowe to become our Chief Financial Officer.  Simon is an accountant trained in The Netherlands, and has spent twenty years in Indonesia, speaking the language fluently. Welcome aboard, Simon.  He’s also taking a substantial shareholding.

All my life I have been a great believer in chunking, breaking everything into smaller chunks to make them more digestible.  So to my embarrassment, I have been told: “no that’s not the way to show the value of the company”.  You are trying to do too much and you need to break it into two chunks…  the actual value and the expected value.  So that’s what we are doing for the new prospectus!

This new prospectus is exciting and will help to lead the company forward into our third year, with growth picking up speed.  Exciting times ahead.

Rex Sumner