Hi Knightrider, thanks for the suggestion. I did as you said last week and a got a quick response back from Richard via email. He suggested a phone call and followed up with one today after the announcement. As one would appreciate it is hard to plan the future of a business with an unknown liability hanging around. The announcement today put some of that into perspective even though a formal assessment from the ITO hasn’t been issued. I guess we now have an indication of the potential liability, although some of it looks to be subjective and possibly the large portion of VAT might be contestable with a lower assessment result. If the VAT portion is removed the liability is probably very manageable.
Anyway as we all know capital is the primary issue to deliver on any initiatives. The day to day business metrics are improving with regards to cost control and margins and that has been some what evident in the quarterly. The underlying problem seems to be patchy orders and not enough up take. I don’t see this as a unique problem for RAN and see it as a problem across the board for adoption of innovative recycled plastic product as the procurement charter is generally lowest cost.
The pallet rental side seems to have promise with some commitments in hand but you need to have capital to create the pallet stock. What I gather is that everything is going to deliver orders in hand and try to keep a float.
On the topic of pallets in Australia for the likes of Woolworths and Coles, the form factor is different to that produced for the Indonesian market so some engineering needs to be done. It appears that there have been discussions sometime ago and in true big business form they expect RAN to do all the heavy lifting without any commitment. With the Capital issue I guess it was considered more beneficial to try to improve the Indonesian business where there was a product and potential for immediate business.
As we know the Australian business has struggled with high input cost and not a lot of product up take for the fencing and retaining products.
So I guess it comes back to my original comment that big business need to step up and be more accountable. In conjunction with my email to Richard I also sent one to the head of Woolworths Sustainability Group with no reply to date. Have a look at their sustainability statement. If points 4 and 5 mean anything I would have thought they would be all over partnering with RAN to recycle soft plastic into pallets.
https://www.woolworthsgroup.com.au/au/en/sustainability.htmlTo me it looks like the only thing they are really putting any focus on is the installation of solar panels to reduce their electricity bill.
To me it is quite clear that there is not enough uptake of innovative recycled plastic products to handle the shear volume of waste plastic packaging and in turn provide a basis for a sustainable recycling industry.
I am not sure if many have bothered to engage with RAN management, but I found Richard to be very open to discussion and gave me a fair amount of time. I believe that he is just as frustrated as the rest of us.
I truely believe that RAN has a future and it can make a go of the existing business or at the least reinvent itself in some form. The short term issue is primarily capital and I would be supportive of a capital raise if that was to happen.
In the mean time I think as consumers we need to let big business know that they need to do better and support industries that are providing sustainable solutions that are in line with their sustainability charters and not just give a bit of lip gloss to the public.
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