The loudest message coming from Williams is not mentioning sales...

The loudest message coming from Williams is not mentioning sales as a measurable milestone.

Towards the end of 2005, Williams told shareholders:
QUOTE: "My priorities since joining Chemeq have been a program of active engagement with our potential customers and distributors.

I can report that these priorities and subsequent dialogue with potential customers and distributors has been immensely beneficial for the company and confirmed my belief we are on track to make significant inroads into the animal health market.

In 2006, we will be building on these achievements and demonstrating the real potential of this company. … We will be pragmatic in the execution of our approach, recognizing in major markets, CMQ may need to partner with organizations that have expertise in these markets to maximize commercial success.

It enables us to step up our marketing efforts to achieve further commercial sales to our current markets, South Africa, Malaysia and New Zealand. We have already seen our first full shipping container of product delivered to South Africa and another will leave within weeks. We are seeing a steady take-up of products including repeat sales in these markets".

Almost every reader will agree sale contracts are very important if not the most important measurable milestone. After drumming up shareholders hope of sales in telephone directory numbers, it is very odd sales was not one of the measurable milestones on Williams presentation.


And is the Chemeq company a 180% change? Let us examine the facts.

CMQ Board: In Dec 2005: Melrose (Chairman); Williams (CEO); Mangano (CFO); Stefannoni; Nicholls & Davies. 15 Jan 2006: Hopkins replaced Melrose as Chairman.
The Chemeq Board had been the same since January 06 other than for the resignation of Melrose on 23 August.

Employees: More than half the workforce were sacked in August. The only additions were McHenry and Gunst report to Williams. In other words, policies and directions still come from the executive directors and the rest of the board.


The board remained almost unchanged, 2 managers had replaced more than half the company employees. Is this a 180% change in the company? Has corporate governance improved? Has sales improved? Has profitability improved?

Some of the changes I see are:
o Reduction in ANZ Nominees share holdings by more than 12 million shares.

o Ex directors selling down their share holdings.

o Net asset value becoming negative in September 06

o “CMQ may need to partner with organizations cliché” replaced by “seeking new

o Strategic partners cliché”.

o Engaged in a legal dispute with CMQ’s most important strategic partner Inviro SA who accounted for 100% of reported sales in 04/05 and in excess of 85% in 05/06. This probably took the development of sales back by years. The reason sales fell of the milestone radar?

o The company may be in breach of the revenue covenant according to the auditors and if the financiers decide to cash in the bonds the company will be bankrupted.


Entering a production agreement is not helping CMQ immediate prospect if there are no sales. Sale is the key to any reasonable chance of recovery from the current dire position and glaringly this is not a milestone Williams mentioned in his impressive presentation.

Cheers