John Linton I'm not sure what it means but we seem to have received more approaches about "joint ventures" over the past three months than we have in the previous six and a half years..... and some of them seem to be more real than at any previous time....though as we have yet to make any significant progress with any of the discussions maybe they are not as real as they seem to be. The trouble with joint ventures for companies of our size is that they are seldom going to result in "joint" - they are going to result in one party or the other not getting what they expected from the arrangement. Perhaps that sounds far too cynical but I have had enough previous experience that shows it is the most likely result most of the time.
However, not taking too negative a view of current discussions we may be able to progress one, possibly two, of them to some sort of completion point before December 31st. If we do that we will not really improve our position in the short term but it is a future avenue worth exploring in at least two respects. Although we believe our automated systems are more than exceptionally good we would have the benefit of having to adapt them to other company's requirements and the scrutiny of new 'eyes' and the new suggestions that flow from such scrutiny so it would be a new source of improvement suggestions. We may be able to improve our buy pricing by adding one or two other company's start up buying volumes to our own. I doubt that would make any short term improvement to our buy pricing, the volumes would be too small to start with and once they grow it is unlikely that the 'partner companies' would stay with the 'joint ventures'.
I will meet with the closest to finalisaton 'partner' late today to determine whether they/we are happy to go ahead and we will progress discussions with the other 'partner' later this week to see if we can work out just what it is they really want to do and whether it's in our best interests to agree to do it. If it looks like taking up too much time then we will postpone any further discussions as the Exetel people involved have more urgent things to do in the time remaining before the new year is upon us and we don't have the resources to make both things happen...I wish we could but we have very limited resources.
I think the highlight of the day was reading Steve's report on the 'opening' of the model dairy farm that Exetel has funded in 'up country' Sri Lanka:
" I attended the opening ceremony of the farm we have provided the financing for along with 40 or so locals, three members of the government and the personnel who did the work from SLWCS. It was a nice event with the local senior priest conducting a brief dedication service.
So far, apart from completing the grazing facilities and building the milking and other sheds there are 20 cows (Jersey cross breds) which are, between them producing from 10 to 2 liters of milk per day depending on how long they have had to acclimatise. The milk can be sold to the local government milk processing plant for Rs. 35 per litre, or sold to locals who line up at the roadside with jugs for Rs. 50 per litre. Providing an income of Rs. 10,000 per day 'as is' or Rs.20,000 per day at full capacity of 40 animals.
Speaking with Mr Hewage, I found out that the government has a facility in place where farmers or groups of farmers can apply for a loan, and a funding pool is available at 4% less than the market rate to provide them with money for capital development - exactly along the lines of the dairy project.
Our future funding should be used in the following ways:
1.Get the project site to a stage of self sufficiency (and is should be very close to that now, if not already there)
2.Produce a documented 'blue print' of materials, equipment, labour and production methods
3.Secure a pool of best producing cross-bred variety milking stock, for both purchase and AI
4.Write a documented set up road map that includes a model business plan with validated ROI."
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