CSS - Clean Seas Seafood

Basilica · 12 May 2009

Re: CSS - Clean Seas Tuna

truevalue said:
Fi$h you could say that about any company listed on the market. If there are more buyers than sellers the price will rise. If there are more sellers than buyers the price will fall.

I think the point is that buyers at 55c can sell at 50% profit straight away. That is not normal supply and demand.

tge oracle · 12 May 2009

Re: CSS - Clean Seas Tuna

Having had time to carefully consider today's announcement I thought I should offer my take on the Cap raising.

Firstly, my initial response ( the one I trust most ) was dissapointment. Not with the Cap raising itself , but more the complete lack of detail on progress and quantity of SBT fingerlings produced and future outlook / plans for CSS.
I am dumbfounded that they did not provide specific details on this vitally important aspect of the company. I am well aware that they intend to release this information at the end of May, but I honestly thought that the Cap raising would ( should ) coincide with this timeframe.
Furthemore , there was no information on the new CEO, surely the ASX will require this to be released to the market officially, not just rely on the aqauculture portal for investor information.
This is vitally important information for investors to make an informed decision on whether, or not , to participate in the share offer. I trust they will release this information forthwith.

I am pleased they have garnered support from larger shareholders for the placement but I would like more details on who participated.
I was hoping that Simplot would significantly raise their stake or another major aquaculture investor like Webster would jump onboard. I think this would have been disclosed if it had been the case, as they did with the last share issue.
In my view , it is very impotant to have this type of investor onboard as they will help support the future growth of CSS , have a good understanding of the aquaculture industry, and are more likely to invest for the long haul, indeed, I think CSS will need an investor such as this to succeed, as TGR did.
It will certainly add a lot more confidence to CSS investors.

I have no issues or concerns with the actual Cap raisining details and I am pleased they went for a larger raising ie. 24M.

More information please CSS.....and don't wait too long!

nathanblack · 12 May 2009

Re: CSS - Clean Seas Tuna

im not a holder of CSS but enjoy reading this thread. im a bit surprised with the timing. if an announcement is due end may, and that announcement COULD be positive to SP. Why not wait til then to do cap raising? i total agree that a discount is expected in cap raisings, but why not try for the highest possible price if that means waiting a couple of weeks?

kenny · 13 May 2009

Re: CSS - Clean Seas Tuna

Welcome to us worriers here at CSS Nathan

I can see your point tge about being disappointed with the announcement and the lack of detail regarding the current SBT batch. It seemed to me that the management have been careful not to direct the focus too much on the numbers of fingerlings etc in this first run as they probably expected the numbers to be less than impressive.

I think Hagen made a tactical error in the media interview by revealing the unimpressive number of fingerlings. The important factor for the researchers at CSS may well be the survival of a viable number of fingerlings at each stage to achieve beyond reasonable doubt proof of concept for future commercial SBT raising. Announcing X number of surviving fingerlings at regular intervals diminishes the memory of the fact that this is still a process breaking new ground and at risk of running into unforeseen obstacles. Like Tank Wall Collision Deaths

I am also waiting to see who took up the placement and whether there is a new strategic investor in the mix. Webster is an interesting thought tge. I haven't followed them at all but vaguely recall management there were bemoaning the fact that their holding in Tassal Group was not being rewarded in the Webster share price and that they would consider selling the holding to release value. Hardly sounds like an outfit keen to invest further into aquaculture.

Cheers,

Kenny

tge oracle · 13 May 2009

Re: CSS - Clean Seas Tuna

I wouldn't be so sure about that Kenny, Webster still own 20.6% of TGR. They would have no problem in finding a buyer for that stake, IMO, if they wanted out. I am not suggesting they will take a stake in CSS but I would certainly like to see them do so. Even better, Simplot increase their stake.
We'll soon see.

kenny · 13 May 2009

Re: CSS - Clean Seas Tuna

tge oracle said:
I wouldn't be so sure about that Kenny, Webster still own 20.6% of TGR. They would have no problem in finding a buyer for that stake, IMO, if they wanted out. I am not suggesting they will take a stake in CSS but I would certainly like to see them do so. Even better, Simplot increase their stake.
We'll soon see.

I agree Simplot increasing their holdings would be a vote of confidence from the US food giant. Wouldn't even cost them much.

Oh and Webster finding a buyer for TGR was never an issue. I think they would prefer to hold it and have the market reflect the value of the holding in the Webster share price.

Cheers,

Kenny

Basilica · 13 May 2009

Re: CSS - Clean Seas Tuna

kenny said:
I think Hagen made a tactical error in the media interview by revealing the unimpressive number of fingerlings.

I think he made legal and a tactical error.
and the timing of one day before a trading halt that was likley to reduce the share price makes it difficult to forgive.

Do we know when the institutions will officially own the newly created shares yet? So we can see who bought them on the ASX announcement.

Basilica · 13 May 2009

Re: CSS - Clean Seas Tuna

The announcement of the CEO today.
2 interesting points.

1. Marcus made the announcement not Hagen, First time i can rember that happening.

2. quoted numbers for eggs and lavae but not fingerlings?
Maybe some dissappointments with the fingerling numbers?
As nathanblack said last night if it was good news they would have stated it with the Cap raising to boost share price. Again i am not disturbed by the small number, If hagen had not connected lavae number with adult tuna neither would the market. (The risks of counting your tuna before they hatch ... or is that chickens)

13 May, 2009
Company Announcements
Australian Securities Exchange Limited
CLEAN SEAS TUNA APPOINTS CEO
Publicly-listed Australian aquaculture pioneer Clean Seas Tuna Limited has appointed Mr Clifford Ashby as Chief Executive Officer to support the company’s strong growth and accelerated penetration of global markets with the pending commercialisation of propagated Southern Bluefin Tuna.
Mr Ashby joins Clean Seas with a management background in listed horticultural companies in Australia and an international corporate finance career in South Africa and the UK.
Clean Seas Managing Director, Mr Marcus Stehr said the Stehr family welcomed Mr Ashby to the company, adding his experience in managing
publicly-listed primary production companies, new market development and international finance would assist Clean Seas as it expanded production and international distribution of its sustainable fin fish species Yellowtail Kingfish and Southern Bluefin Tuna.
This month, Clean Seas reported the success of its ongoing Southern Bluefin Tuna larval rearing trials based on 35 days of continuous spawning by its SBT broodstock, the production of more than 50 million fertilised eggs and 30 million larvae; and production of SBT fingerlings.

dkam · 13 May 2009

Re: CSS - Clean Seas Tuna

From the CSS management point of view I can see why they don't want to wait for more results on the fingerlings before the cap raising.They know how to keep fingerlings alive, however, I assume they're more interested in the limits. How far they can drop the temperature vs survival rates, etc.

So, I'm guessing they don't want to get caught up on the number of fingerlings and the survival rates of each batch.

FI$H · 14 May 2009

Re: CSS - Clean Seas Tuna

I expected that they'd get hammered today. Glad that they did not. Hagen's constant state of euphoria rather than viciousness are probably the reason for recent management inadequacies. The important thing is that they seem to be very confident that they can produce a commercial quantity of fingerlings and keep them alive. Last year they only had a small amount of larvae but knew they could produce millions the year after. Seeing how expensive it is to place the new shares it was probably a good idea to raise 25 million. They couldn't have asked for a higher price given that the stock was trading around 30c not too long ago. So, things could be worse and my fury has calmed down a bit.

What do you make out of this statement?

“We believe the tuna have the potential to reach 10 kg in the first year, 20kg in the second year and up to 40kg in the third, although we may elect to sell the first of our fish as early as July next year.”

Were larger tanks always factored in as a necessity for commercialization or did they believe they could do it all in the old smaller ones? Will the new tanks be able to hold a commercial quantity of fingerlings or do they have to upscale?

truevalue · 14 May 2009

Re: CSS - Clean Seas Tuna

FI$H said:
I expected that they'd get hammered today. Glad that they did not. Hagen's constant state of euphoria rather than viciousness are probably the reason for recent management inadequacies. The important thing is that they seem to be very confident that they can produce a commercial quantity of fingerlings and keep them alive. Last year they only had a small amount of larvae but knew they could produce millions the year after. Seeing how expensive it is to place the new shares it was probably a good idea to raise 25 million. They couldn't have asked for a higher price given that the stock was trading around 30c not too long ago. So, things could be worse and my fury has calmed down a bit.

What do you make out of this statement?

“We believe the tuna have the potential to reach 10 kg in the first year, 20kg in the second year and up to 40kg in the third, although we may elect to sell the first of our fish as early as July next year.”

Were larger tanks always factored in as a necessity for commercialization or did they believe they could do it all in the old smaller ones? Will the new tanks be able to hold a commercial quantity of fingerlings or do they have to upscale?

Hi Fi$h, They found out in the recent trials that the tanks they had were too small. They had thought they would be ok based upon what the Japanese had done, but they turned out to be too small for SBT. The new larger tanks will give them the capacity they need for a commercial run in December.

The growth rates they quote are based upon the growth rates achieved by the Japanese with NBT. It remains to be seen whether SBT grow as quickly (there have been subtle differences between the species) but management say the growth achieved so far has matched their expectations.

FI$H · 14 May 2009

Re: CSS - Clean Seas Tuna

So the 4 million for the new water system are unexpected... it might be an advantage in the long run because it will be easier to maintain good water quality for better growth in them. Can they sell the old system or use it for something else? What impact will the new CEO's sallary have?

truevalue · 14 May 2009

Re: CSS - Clean Seas Tuna

FI$H said:
So the 4 million for the new water system are unexpected... it might be an advantage in the long run because it will be easier to maintain good water quality for better growth in them. Can they sell the old system or use it for something else? What impact will the new CEO's sallary have?

I suppose that is true. The old system could be used (or may have been used) for kingfish. I am not sure.

New CEO salary - hard to say but I suspect low(ish) base salary of say $200k and some attractive performance based incentives (options, bonuses) if he achieves certain hurdles.

tge oracle · 14 May 2009

Re: CSS - Clean Seas Tuna

With the first Cap raising out of the way I would like comment on an aspect of CSS's future not previously discussed or considered ( I think ! ).
This is not based on any factual information just purely speculation on my part.

In reference to my earlier posts on SBT fingerling numbers and desire to see Simplot ( John West ) increase their stake in CSS I would like you to consider this aspect of SBT propoagtaion that goes way beyond , IMO , the Sashimi market for farmed SBT. In fact I believe Simplot's investment in CSS has nothing to do with the Sashimi market.

Most investors are only focusing on the Sashimi potential for CSS' s SBT but I believe an equally profitable and considerably larger market lies in premium canned SBT, fresh SBT portions marketed to restaurants ( worldwide - as they do with YTK ) and other variations for fresh SBT which can be sold in fish markets, vacuum packed for long life etc.

Consider this, canned tuna is the most widely purchased and consumed seafood in the world, nearly every country consumes tinned tuna. The tuna used is mostly skipjack, longtail, alabacore etc. and is of an inferior quality when compared to SBT.
CSS will be able to grow SBT to 2-4kg in about 4-6months , which is ideal for tinned tuna. If they can propogate SBT on a scale achieved this season there wil be ample stock left over for Sashimi production , which will require 24-36mths.
They will be able to produce on scale and in a very short time frame which in real terms could make this more profitable than Sashimi. Tinned tuna is quite expensive when you consider the amount of tuna in a can, it is mostly water or oil etc.

I do believe there is an enormous market for premium tinned tuna products and that CSS has the potential to become a global giant in this sector.

Once again , I have a vested interest as I own CSS shares and will be participating in the Cap raising so view my comments with an appropriate level of suspicion and caution.

kenny · 15 May 2009

Re: CSS - Clean Seas Tuna

Hi tge,

Would the demographic that regularly buys canned tuna be interested in changing to SBT-in-a-can? Would it be worth the marketing to differentiate on a taste/quality/health angle and charge a premium? Canned tuna is popular as it is considered an inexpensive and convenient way to have seafood. Would most of the customers actually notice enough difference in taste to change buying habits?

Simplot would probably do better to hold off and await until commercialisation is more imminent before negotiating a supply contract or joint venture I think.

Cheers,

Kenny

tge oracle · 15 May 2009

Re: CSS - Clean Seas Tuna

kenny said:
Hi tge,

Would the demographic that regularly buys canned tuna be interested in changing to SBT-in-a-can? Would it be worth the marketing to differentiate on a taste/quality/health angle and charge a premium? Canned tuna is popular as it is considered an inexpensive and convenient way to have seafood. Would most of the customers actually notice enough difference in taste to change buying habits?

Simplot would probably do better to hold off and await until commercialisation is more imminent before negotiating a supply contract or joint venture I think.

Cheers,

Kenny

I think there is a market for premium products in all food types. Just look in the local supermarket at the different prices for eggs, milk , meats, bread......the list goes on! They range from the basic product to premium with very significant price differentials.

I believe Simplot would already have marketing ideas. My speculation goes way beyond just premium tinned tuna , I am also thinking about various packaged SBT portions which could be could be marketed in the frozen or fresh fish section of the supermarket / fish shops. Also, as a major supplier of SBT to restaurants.

I agree Simplot will wait until there is certainty with breeding before making a major move into CSS. But I suspect this may not be far off, particularly, if there is significant breeding succes in Nov/Dec.

truevalue · 15 May 2009

Re: CSS - Clean Seas Tuna

tge oracle said:
I think there is a market for premium products in all food types. Just look in the local supermarket at the different prices for eggs, milk , meats, bread......the list goes on! They range from the basic product to premium with very significant price differentials.

I believe Simplot would already have marketing ideas. My speculation goes way beyond just premium tinned tuna , I am also thinking about various packaged SBT portions which could be could be marketed in the frozen or fresh fish section of the supermarket / fish shops. Also, as a major supplier of SBT to restaurants.

I agree Simplot will wait until there is certainty with breeding before making a major move into CSS. But I suspect this may not be far off, particularly, if there is significant breeding succes in Nov/Dec.

Interesting thoughts Oracle. That will be a different angle for the new CEO. I doubt the Stehr family would be thinking about putting their beloved tuna into cans. They would be thinking about them getting top grading at the Tokyo Fish Market.

I certainly think that when they get to a certain scale they will need new markets so as not to have too much impact on the farmgate prices they receive for their wholefish. I dont know if that level is 5000 tonnes? 10? 20?

They have to be a bit careful. This is Armani not Target and they are much better off selling 10,000 tonnes @ $10-$15/kg margin than 50,000 tonnes @ $2-3/kg

Basilica · 15 May 2009

Re: CSS - Clean Seas Tuna

tge oracle said:
Consider this, canned tuna is the most widely purchased and consumed seafood in the world, nearly every country consumes tinned tuna.

Is that true or speculation Oracle?
Tin tuna is the morst boreing seafood possible. it it really the most sold?

kenny said:
Hi tge,

Would the demographic that regularly buys canned tuna be interested in changing to SBT-in-a-can? Would it be worth the marketing to differentiate on a taste/quality/health angle and charge a premium?

I do not think they will convert that market. Tap into the Red Salmon market is the only possibility, They already pay more than premuim fresh Salmon.

truevalue said:
They have to be a bit careful. This is Armani not Target and they are much better off selling 10,000 tonnes @ $10-$15/kg margin than 50,000 tonnes @ $2-3/kg

If they did, they would do both. 10,000t to shashimi and rest to cans. But i would prefer the rest is dumped on woolworths, just so i can buy frest SBT for $10 / kg .

FI$H · 15 May 2009

Re: CSS - Clean Seas Tuna

even thinking about canned bluefin is blasphemy. if it is true that sbt can grow up to 10kg in 12 months than it should be possible to grow them to 6-8 kg over the summer months till june/july 2010. kingfish reach 5-6kg after 18 months and are sold with a 3$ per kg margin. with a 5-7$ margin 200 000 tuna of that size could create a profit of ~5 million $ in only one summer. by then the ytk division will contribute a healthy profit which should bring them in a far better position to raise the capital needed for 10 000t annual production. to me this looks like an attractive option.

kenny · 15 May 2009

Re: CSS - Clean Seas Tuna

I would like to think that there would be surplus production to feed into any cannery venture. Possibly the ones the John West rejects so to speak

The key market will always be the Japanese sashimi market for the premium margins. Fresh portions for the retail chains etc would be a good angle too but why are there not many similar products out there? Hopefully insufficient supply rather than logistic/cost concerns.

Have they considered the Omega-3 market from tuna oil I wonder too? Companies like Clover Corporation extract it for food boosting.

Cheers,

Kenny

CSS - Clean Seas Seafood

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