CSS - Clean Seas Seafood

[truevalue]

Re: CSS - Clean Seas Tuna

"There's a commercial industry in the making of immense proportion," Mr Stehr said. "In years to come, it will be a billion-dollar industry."

.

A billion dollar industry? Even I am not that bullish. Will be interested to hear where this came from.

$1 billion over 4 years perhaps? Ill still take it!

 

[FI$H]

Re: CSS - Clean Seas Tuna

A billion dollar industry? Even I am not that bullish. Will be interested to hear where this came from.

$1 billion over 4 years perhaps? Ill still take it!

He said similar things in the past. billion dollar industry means annual production of ~50 000t per year given a wholesale price of 20$. I'm not sure if we'll get there quick but should 10 000t annual production stabilize and translate to 100 million $ profit p.a. then the market cap should be >1 billion.

When will they announce the quarterly results?

 

[tge oracle]

Re: CSS - Clean Seas Tuna

He said similar things in the past. billion dollar industry means annual production of ~50 000t per year given a wholesale price of 20$. I'm not sure if we'll get there quick but should 10 000t annual production stabilize and translate to 100 million $ profit p.a. then the market cap should be >1 billion.

When will they announce the quarterly results?

Truevalue /Fish,

Yes, I think Hagen is getting a little ahead of himself, although I must agree, I do see the potential for CSS in becoming a billion dollar industry, in fact, it may well exceed this value if the product is well managed, diverse in range and production scale is commensurate with global demand, which I beleive will be significant.
The one factor I see preventing this scenario is competition. CSS have substantial first mover advantage, others will see the potential and ramp up their efforts to achieve breeding success to compete for market share.

 

[BlueHshoeLvs CSS]

Re: CSS - Clean Seas Tuna

Truevalue /Fish,

Yes, I think Hagen is getting a little ahead of himself, although I must agree, I do see the potential for CSS in becoming a billion dollar industry, in fact, it may well exceed this value if the product is well managed, diverse in range and production scale is commensurate with global demand, which I beleive will be significant.
The one factor I see preventing this scenario is competition. CSS have substantial first mover advantage, others will see the potential and ramp up their efforts to achieve breeding success to compete for market share.

Oracle,

I think the jump they have on others is substantial and will give CSS at least a 5 year head-start on any competition. A new entrant will encounter similar growing pains of CSS (although no doubt the trailblazer saves those following a lot of headaches through Inadvertently revealing short-cuts, even if they don't disclose all of their important secrets) The mere fact that there is 18month - 2 year grow out period before getting product to market and that is AFTER jumping the huge hurdle of finding the magic formula of closing the life-cycle should give CSS a massive head-start.

I think now that CSS have achieved what appears to be a good formula that commercialising it is an achievable reality. Of course there maybe hiccups along the way, i.e. 1st attempt at commercial quantities later this year is not successful / issues with feed etc are more likely to be inconveniences and not show-stoppers!

My biggest concern is actually how the fish would be recieved in the all important Japanese market. In all the calculations i have seen the ultimate price achievable at market has been based on the wild-catch price. The Japanes are notoriously fickle about food and am fearful that there may be some type of back-lash to a "farmed tuna". Would the taste be different? especially if wheat based pallets are used as opposed to pilchards. Would the CSS bred Tuna need to be labelled as "farmed tuna" to the Japanese consumers? and therfore would the "farmed tuna" return a discount in price to wild catch tuna?

My thoughts to the above is that the introduction of the product will need to be managed very very carefully and marketed exactly right. You would not want a GM type scare compaign to gain traction. I realise that there would be other farmed species going into Japan with good level of acceptance, but we are talking about a high-end sashimi product here. Of course it is effectively a commodity and will be subject to supply and demand, if supply is short buyers/consumers will be less likely to be picky but if supply of "wild catch" tuna is plentiful then the differentiations in the product may start to occur.

I would be interested to hear the thoughts of oracle, turevalue, f$sh etc on this as it appears you guys have a good knowledge of seafood farming and it's general acceptance.

 

[truevalue]

Re: CSS - Clean Seas Tuna

BHLCSS i agree that the farmed v wild catch is a risk and in this species there are no true farmed products in the market. Hagen is getting the $20/kg price on his "ranched" tuna which has been sitting in a sea cage being fed pellets for 6 months however and it has been well recieved. I understand the Kinki bred tuna commands premium prices despite its farmed status.

On the competition front, the real head start CSS has is in the brood stock. It took 8-10 years in captivity for those fish to become sexually mature. There just arent any mature fish around that can be used as broodstock for a competitor. All the tuna caught in the wild nowdays are juvenile fish that are 7-10 years from sexual maturity. This is an example of how far sighted and patient Hagen has been since he put those tuna aside a decade ago, fed them, nutured them and then finally flew them into the onshore tank to breed.

 

[tge oracle]

Re: CSS - Clean Seas Tuna

BHLCSS,

I agree with Truevalue's sentiment, acceptance of farmed SBT will not be an issue. I am a regular traveller to Japan and from my experience Japanese consumers are very accepting of farmed product , provided quality is maintained.
You only need to look at the success of Hiramasa ( sashimi ) kingfish to understand the acceptance and potential of farmed product.
The whole issue of farmed vs wild really comes down to husbandry. The farmed stock must be well kept, nourished/fed and handled. Provided these important processes are complied with the end result is a high quality farmed product.

Truelvalue has a point re-broodstock, however, there is plentiful wild broodstock available if you know where to look and have the authority to catch them ( quota's / permits etc. ). As for the logistics of transporting wild catch broodstock to your SBT/NBT facility, well, that's where the real problem lies!
Fortunately, they can only be caught in very remote locations.

I think future competition may come from inducing younger broodstck to breed. There would appear to be significant advances in artificial insemination / spermiation of SBT / NBT.

Either way, CSS is in the box seat. They will have established SBT production on a commercial scale and secured important customers / markets before competitors can get off the ground.

 

[BlueHshoeLvs CSS]

Re: CSS - Clean Seas Tuna

BHLCSS,

I agree with Truevalue's sentiment, acceptance of farmed SBT will not be an issue. I am a regular traveller to Japan and from my experience Japanese consumers are very accepting of farmed product , provided quality is maintained.
You only need to look at the success of Hiramasa ( sashimi ) kingfish to understand the acceptance and potential of farmed product.
The whole issue of farmed vs wild really comes down to husbandry. The farmed stock must be well kept, nourished/fed and handled. Provided these important processes are complied with the end result is a high quality farmed product.

Truelvalue has a point re-broodstock, however, there is plentiful wild broodstock available if you know where to look and have the authority to catch them ( quota's / permits etc. ). As for the logistics of transporting wild catch broodstock to your SBT/NBT facility, well, that's where the real problem lies!
Fortunately, they can only be caught in very remote locations.

I think future competition may come from inducing younger broodstck to breed. There would appear to be significant advances in artificial insemination / spermiation of SBT / NBT.

Either way, CSS is in the box seat. They will have established SBT production on a commercial scale and secured important customers / markets before competitors can get off the ground.

T'Value / Oracle,

Thanks for your insights, no doubt with your different views on brood-stock that competition will find a way to succeed, fingers crossed that is long way off. Your feed-back on Japanese acceptance of farmed product is very reassuring.

So now it's just a matter of time right......?!

 

[FI$H]

Re: CSS - Clean Seas Tuna

T'Value / Oracle,


So now it's just a matter of time right......?!

time, money, know-how and luck is probably all it takes...



A lot will depend on the next pre-commercial run, I guess. But keep in mind that the YTK business will provide significant amount of capital in future years so I do not regard delays at this stage as a worst case scenario.

 

[truevalue]

Re: CSS - Clean Seas Tuna

time, money, know-how and luck is probably all it takes...



A lot will depend on the next pre-commercial run, I guess. But keep in mind that the YTK business will provide significant amount of capital in future years so I do not regard delays at this stage as a worst case scenario.

Pre-commercial? As far as I am aware the next run in December is an all out, shoot for the stars, ball tearing, rip snorting, 50 million eggs in, see what we can get out run.

We have done the time, raised the money, established the know-how and had the luck. Lets get this baby off the ground!

 

[FI$H]

Re: CSS - Clean Seas Tuna

Pre-commercial? As far as I am aware the next run in December is an all out, shoot for the stars, ball tearing, rip snorting, 50 million eggs in, see what we can get out run.

We have done the time, raised the money, established the know-how and had the luck. Lets get this baby off the ground!

Newspapers reported 25000 fingerlings as a benchmark for the next run but that could be a minimum target. Is everything in place to grow-out 200-300 000? If yes, full steam ahead!

 

[tge oracle]

Re: CSS - Clean Seas Tuna

Regarding today's announcement, I am pleased that they have cleared the balance sheet for FY10 but I am dissapointed that they made no mention of the YTK business achieving positive cash flow in H2/09. They had forecast that the YTK business would be accretive during this period.
The " clearing of the decks" has provided somewhat of a smokescreen for the YTK business progress during H2/09.
I would like more detail on how YTK is performing financially as, IMO, it must be able to contribute to cash flow in a positive fashion to help cover expenses for SBT production in the initial stages.
There will also be the need for Capraising but the more YTK contributes the less Cap required from investors.

Any other views on this ?

 

[truevalue]

Re: CSS - Clean Seas Tuna

Hi Oracle,

The reduction in kingfish numbers next year is positive for cashflow in two ways; 1) Sales volumes will be greater than production volumes for the first time ever meaning YTK will contribute to rather than consume cash, especially if they can deliver on the $8m pa in savings in feed costs and labour efficiency; and 2) the less # of YTK will allow for more space for SBT without additional capex needing to be spent.

This whole announcement highlights the stupidity of current accounting standards that forces companies with regenerating assets such as wine companies (vineyards) and agricultural companies (cattle, fish etc) to revalue their inventories every year to "market value". This has the effect of massively distorting reported profit every year as inventories are revalued up and down as market prices change. All other manufacturers report profits based on historic cost of goods sold and if Cleanseas were able to report on this basis their profit would be quite good in the second half.

All up the announcement is typical of that which occurs when a new CEO is appointed. The result will be lower reported profits today but higher reported profits in the future.

 

[tge oracle]

Re: CSS - Clean Seas Tuna

Thanks Truevalue, I was just hoping for a little more detail on YTK sales and profitability. I agree , the outlook for YTK does look good based on today's announcement and accept that accounting protocols do make it difficult to be more specific with financial predictions etc.
Perhaps the new CEO will provide more details once he has settled in.

 

[FI$H]

Re: CSS - Clean Seas Tuna

The forecasts come as the first tuna fingerlings from Clean Seas' 2009 trials reach 30cm at 125 days of age. It has retained about 40 fingerlings to continue its research at the Arno Bay Hatchery.

http://www.news.com.au/business/story/0,27753,25854315-462,00.html

Do you interpret downsizing of the YTK business really as a shift of focus to SBT or a failure of that business model? Are the larger tanks with curtains the new hatchery they refer to?

I'm also confused by:
Clean Seas Tuna Ltd (ASX:CSS) today warned it would incur a net loss of about $6m for the second half of the 2009 year, compared with the first-half net loss of $6.6m.
http://www.americanchronicle.com/articles/yb/133500081

CLEAN Seas expects to post a loss of $6 million for the financial year after writing down the value of a number of sectors within its business.
http://www.portlincolntimes.com.au/news/local/news/general/clean-seas-6m-loss/1582244.aspx

Didn't they suggest a strong profit in H2/2009 and a near break-even for 2009? How did they go from ~6M profit to 6M of loss in H2? The write downs don't sum up to 12M.

 

[truevalue]

Re: CSS - Clean Seas Tuna

Didn't they suggest a strong profit in H2/2009 and a near break-even for 2009? How did they go from ~6M profit to 6M of loss in H2? The write downs don't sum up to 12M.

Mulloway WD - 2.2
YTK WD - 4.9
ME Costs - 1.2
SBT Dev Costs 3.7

Total $12m

We have to wait for the result to come out but it does look like on the "operating" side of the business they made a $6m profit in the second half.

 

[tge oracle]

Re: CSS - Clean Seas Tuna

Mulloway WD - 2.2
YTK WD - 4.9
ME Costs - 1.2
SBT Dev Costs 3.7

Total $12m

We have to wait for the result to come out but it does look like on the "operating" side of the business they made a $6m profit in the second half.

Yes, agreed Truevalue, but why not elude to this in the annoumcement, they don't have to be specifc just an indication that YTK is generating postive revenue would suffice until the results come out. It will add a lot of confidence to current investors and, more importantlly, those wishing to invest in CSS.

In regards to FI$H's concerns about YTK fingerling production, I am not concerned by this move as all businesses have had to reduce inventory levels in the current market conditions, no matter what they are producing. It makes perfect sense to produce a product that is commensurate with demand. If demand increases , then so can production.

We all look forward to the successful commercial production of SBT, but I would still like to see YTK accompany that success as YTK does satisfy demand accross a broader product range, albeit at lower margins. When times get tough it is important to have a product that can sell when premium products are off most consumers shopping lists i.e. SBT.

Let's wait for the numbers and accompanying commentary before we all jump to conclusions.

 

[truevalue]

Re: CSS - Clean Seas Tuna

Positive article on CSS and Kinki collaboration

http://www.worldfishing.net/news/news_story.ehtml?o=3132

Quarterly Cashflow out. Cash inflow looks ok. Big increase in working capital - $14m - hopefully that includes the new SBT hatchery tanks.

 

[FI$H]

Re: CSS - Clean Seas Tuna

Thank you oracle and true value! Today's release seems to be better received than yesterday's and we're back to where we were. Let's hope they'll finish the new hatchery in time.

 

[truevalue]

Re: CSS - Clean Seas Tuna

A good article on the state of the world Blue fin Tuna population as well as a discussion on the scientific hurdles facing CSS and other wouldbe producers of Bluefin.

Interesting that CSS is getting more and more support from the greenies which is a big turnaround from the Green stance just 2 years ago when they were hailing this project as completely environmentally unsustainable. Now they are "The Saviour" of bluefin.

http://www.wired.com/wiredscience/2009/07/tunafarms/

 

[tge oracle]

Re: CSS - Clean Seas Tuna

Earlier on in this thread there was reference made to MPA by Green08. I advised that I was not invested in this company and, although I believe they have a great product I had a number of concerns about MPA that precluded any intention to invest. I won't go in to detail now but the recent announcement concerning cash flow etc raised by the ASX in regards to MPA should be of concern to investors.

Disclosure - I don't own and never have, MPA shares, but this has a similar ring to AAQ. I am not a financial adviser and this is only my humble opinion , but , Invesors beware!