Situation Report, May 2022

The company is now on a very solid footing. We have backup personnel in every area. We have engaged a high-level financial company to look after the finances and prepare the company for eventual listing should that be the wish of the shareholders. After 3 months, we now have established procedures and slowly adding more. Indeed, everything is in place except for finance. We still need to sell shares, and right now would be a good time to sell a lot.

Why?

Well, the vanilla crop in Madagascar is failing… vanilla prices are up from $265 to $450 already. Given the finance, we can buy up carefully selected green beans process them and potentially make a great deal of money. I say potentially, because something can always go wrong, which is why we don’t want to buy too much. Very likely, we shall buy 200kg of green, re-sell that to another processor for a profit and buy more. The price of green beans is already high and likely to go very high when other processors get desperate for vanilla. We are not ready to purchase just yet, because the vanilla isn’t ripe. But next month, oh yes. The green vanilla price is currently around Rp220,000 per kg, about $17. After drying and processing, this would give us an average cost of $80 per kilogram. We expect this price to go up, but we expect to be able to buy for less than Rp400,000.So, I would like to ask you shareholders to help. We need more shareholders! Please tell your investor friends about us. They can download the latest prospectus from the website or we would be delighted to send them a copy. Indeed, we attach it to this report. Current share price from us is Rp1,500,000 and we expect that to rise to Rp1,600,000 on the 1st of July. I am reluctant to say what that is in USD or sterling, for those currencies seem to be weakening. This is a really good time to be commodities!

Vanilla.

The new method of working with farmers and paying them in rice for the land is generating lots of interest, but the two latest gardens are 20% profit share deals.Garden 20 is actually owned by a shareholder, and she is giving us 80are to work with while planting another 80are with porang, a new crop that gives a large root harvest every 2 years. It is in demand in Korea, but we are at present unimpressed by its potential. She may ask us to take over the area if the porang does not work, and the neighbour on the other side has indicated his interest to give us a similar size. We expect to plant this with 4,000 vanilla vines, and the extensions with another 4,000 each. We have cleared the land and put in half the bricks for the raised bed.

Garden 21 is near Tampaksiring, and the landowner cannot grow rice at present because of the collapse of the subak, that system of little canals that feed Balinese ricefields. The land has no water. Plus he has to employ his father in law, so he is happy to do a 20% deal with us and give us the father in law! This is 28 are and ex-ricefield which pleases me. We expect to plant 2,000 vines here, maybe more. This provides us with interesting experimentation, because although the land is beautifully flat, there is no vehicular access with the collapse of the bridge beside the subak. So, we are building a compost bin and making our own compost with no ability to get cocopeat there. We may even keep a cow there, to provide extra nutrients in the compost. The raised bed will at first have nothing holding it up; later we may use bamboo. We cannot get bricks to the location.

Garden 19. Half of this already has the trees cleared. The remainder is waiting on a larger chainsaw to cut down some large trees by the river. We have a compost bin in place, made of wood, and the raised beds are being created from fallen logs. The first compost is rice straw and some vanilla has been planted already. This is where we have planted vetiver grass, to stop landslides. I am a little worried there isn’t enough sunshine, but we shall see.

The other gardens are all growing really well, with good strong vines loving the horizontal growth we are demanding. Lot of pruning work to get the trees into the right shape.

We are trialling lots of fruit and flower trees, looking for alternatives to Gliciridia as support and shade. Avocado works well, but takes a LONG time. We are also getting a hive of bees, for we wish to experiment with training them to pollinate the vanilla. We know how to do it, and although the reports are that it cannot be done, we have found that the established literature on vanilla tends to be very wrong… We shall see.

We are considering and doing further research into a plan to make our own cocopeat by buying coconuts and making coconut oil. We can also make charcoal. The cocopeat may prove to be subsidised by these activities. Still being researched.

Lobsters

We now have a thousand breeding females, albeit very young. Production has started, though, with those pregnant females expected to provide around 1,000 babies.

When will they be ready? Well, conventional wisdom is about 7 months, but they are growing much faster than expected.

This table below shows the stock we have in each pond.

The males in A3 are exploding! They are gaining 50g in a month. It seems to be a combination of cooler, clean water and abundant natural food, especially insects. We are indebted to Willie, of Willie’s Worms in Australia, for telling us their simple worm rearing technique. We have 2 pits on trial, first harvest this week. Lobsters love worms!

We have enjoyed a constructive meeting with one of Bali’s top restaurants, Locavore, who are keen to offer our Royal Blue Lobsters to their diners. They are going to come back to us with their size preference, but I expect they will want to sample the different sizes first. It looks like we will be able to offer lobsters ranging from 100g to 250g. Early days, but we can easily do 100g, 125 and 160g. 10, 8 and 6 to the kg.

Administration

We are very pleased to have poured a concrete slab in the upper courtyard of our processing facility, which makes a perfect area for drying vanilla in the sun. We have also widened our front driveway for future truck access and and have begun renovation of the main building to make it secure.

Sadly, one of our early shareholders passed away last month and her shares go into her relatives name. Since a name change request was handled by an independent Notaris, our new AKTA with new shareholders has been delayed. It will be distributed as soon as it is available.