max1997 In business, agents sell on behalf of the supplier, and...

max1997

In business, agents sell on behalf of the supplier, and distributors buy from the original supplier and on-sell to the end customer. Stanco has a huge business network in China, and this is composed of one or more legal entities registered in China. Stanco is, I understand, WAK's exclusive distributor in China for sales to the fibreglass sector. Consequently, if WAK exports to a customer that is a Stanco-owned legal entity in China, Stanco would be WAL's customer in China, but not the end customer.

A large component of the fibreglass produced in China is produced by Taiwanese-based producers, so Stanco would sell to both the Chinese and Taiwanese entities of those producers. To quote from the Internet, Taiwan Glass Fiber "established the Taiwan Glass China Holding Ltd. in 1993 in order to meet booming market demand and boost the group's domestic and foreign competitiveness, and began expanding its role in the Chinese market through a series of plant development projects in China. The "Taichia Glass Fiber Co., Ltd." (TGF) is one of Taiwan Glass's subsidiaries in China."

I suspect that like Imerys and Sibelco, Stanco sells blends to its customers, or if not, it could, because it specialises in all the required minerals inputs to the fibreglass sector. The four basic feedstocks for continuous-filament fibreglass are: kaolin circa 29% by weight, silica sand (29%), limestone (30%) and boron compounds (12%). Stanco supplies all of these.

Stanco could be the key to monetising the silica sand in which WAK's kaolin is hosted. As WAK's kaolin is so pure, I suspect that the silica sand would tend not to contain deleterious contaminants, like iron and carbon.

Intuitively, it seems illogical for WAK to remove the silica sand, and then have sectors like pressure-formed ceramics and fibreglass buying silica sand to blend with the kaolin. Management is aware of this matter, and it is engaged in discussions to sell what I call near-ore (a specified blend of kaolin and silica sand). Via a distributor like Stanco, WAK could be a suppler of both kaolin and silica sand. If the near-ore business gets going, I understand it would be exported via the Port of Bunbury.

As an aside, the pressure-cast ceramic subsector is also a candidate for near-ore. Its four major mineral components are kaolin, ball clay, silica sand and feldspar. Stanco is neither a significant supplier, nor an exclusive WAK distributor to that subsector, but Stanco has customer on some ceramics subsectors.