sinking fast now, page-14

Bacci,

A few comments, most soda ash sales are held under lengthy contracts which I think is the value of its customer / distribution network. It will be difficult for anyone else to undercut ash imported by SASS as it is mined / refined ash not manufactured. Only the Chinese would be in a position to challenge and their soda ash costs more to produce than ash from USA and I,m sure that SASS would be aware of this advantage and make sure it is maintained.
Under the terms of the banks support (per PSH statement) $68m of debt interest is to be capitalised until 2017 meaning PSH will pay interest on only circa $40m for the first 4 years of the SASS agreement.
My understanding is that the volume of CO2 required for bicarb production will require only 2 of the existing kilns to operate and then at relatively slow rates, meaning the volume of limestone / coke required will be quite small per their historical usage and will impact costs of delivery of both I would assume.
Again from Penrice statements the cost of imported soda ash is some $40/te cheaper than they could produce, this should also mean the cost of producing Bicarb from imported ash should be lower than has been the case previously (assuming they are successful in producing it via that route), hence profitability might improve in this area.
It does seem to me that the amount of staff required to run the reduced operation is higher than one might expect but maybe over time other reductions will occur possibly by natural attrition??.
The issue with Ridley might be of concern but time will tell.
It seems to me PSH / SASS have 4 years to re-establish the structure and profitability of the business at which time some arrangements will need to be made with regards to long term debt, I suspect some rationalisation around the JV might occur but who knows.
I must admit that although I,ve followed the trials and tribulations of this company for many years and often written it off as an investment option, it seems to me that there is a much improved potential outlook now which for me
justifies the risk at such a low cost per share, so I intend to hang on to our holding and may possibly increase it as I invest long term rather than trade.

As always it is up to individuals to make decisions based on their own research