I have gone back to the prospectus in late 2015. Page 11 (how will eh company earn income) says they will identify markets in Asia (my summary) the it goes on to say"
"The Company will then secure and purchase the cut hay from hay growers (which are predominantly located in Victoria) before production commences.
The hay growers transport the cut hay in large bales to the processing plant for testing and storing for processing. The bales are cut and pressed to the sizes required by the customers. The sales team finalises the delivery terms of the processed hay and then the logistics team organises the export of the hay through the Port of Melbourne to various Asian destination "
"
The key factors that the Company will depend on to meet its objectives are:
- going demand in the established and emerging Asian markets for processed hay;
- sufficient cut hay available at the right price for purchase and processing to meet demand;
- a sufficient operating margin to ensure sustainability of the Company;"
Page 13 "
Hay processing is reliant on the purchase and continual supply of quality cut hay at a competitive price. There is a risk that there is not enough supply of cut hay from the hay growers required to produce the processed hay needed to meet the sales targets and
existing contracts of Elect. This risk may have
an adverse effect to the Company’s business, reputation, financial performance and results of operations. The supply of cut hay may become difficult to obtain due to a number of factors such as a reduction of hay grown locally because of weather (droughts or floods), fire, pests and other agriculture risks, change of crops grown, and the sale of cut hay to competitors, price, disputes with hay growers, and a reduced quality of hay grown."
Has there been a change tooth business model set out at the end of 2015? I know they have purchased the Cold Stores business.
