for Asia Agriculture
Deputy General Manager Melanie Wu at the 34th National Plant Protection Fair,
Chengdu, Sichuan, November 2018
The Company is a specialty liquid fertiliser manufacturing, distribution and sales business with the majority of its operations being conducted in China but has the rights to operate in 19 other countries in the greater Asia region. The Company currently has small scale sales occurring in Thailand, Cambodia and Vietnam through distributors in these countries and has previously sold specialty fertiliser products in Sri Lanka and Myanmar.
The liquid fertiliser products which the Company holds exclusive rights to manufacture and sell in the Asian Territories have been developed and continuously improved by RLF Australia, (RLF Products) an Australian fertiliser company that has been operating in Australia for over 25 years and which has tried and tested key RLF Products in the Australian market over this time. The Company has in place a perpetual Operating Agreement and Distribution Agreement, under which the Company benefits from RLF Australia’s knowhow and expertise in manufacturing the RLF Products and has been granted exclusive rights to distribute the RLF Products in the Asian Territories.
The Company manufactures, packages and distributes a range of specialty liquid fertiliser products (RLF Products) under the Distribution Agreement and Operating Agreement with RLF Australia. RLF Australia is a fertiliser company that operates in Australia and has developed the RLF Products and has established a manufacturing, distribution and sales network for the RLF Products in Australia. The Company’s business currently operates predominantly in China, but the Company also has the rights to operate in 19 other countries in the greater Asia region.
There are approximately 80 product formulations that the Company has access to under its licensing arrangements. At present, the Company has 16 RLF Products registered and being sold in China, comprising the below.
|BSN Superstrike Seed Priming Fertiliser||Dynamo Fertigation Range||Zinc Plus Foliar Fertiliser||Silica Plus Foliar Fertiliser|
|BSN Ultra Seed Priming Fertiliser||Plant Milk Fertigation Range||Caltro High Calcium Foliar Fertiliser||Potassium Plus Foliar Fertiliser|
|Fruits+Veggies Plus Ultra Foliar Fertiliser||PowerPK Foliar and Injection Fertiliser||Caltro Fertigation||Boron Plus Foliar Fertiliser|
|Broadacre Plus Ultra Foliar Fertiliser||Rapid Zinc Foliar Fertiliser||Calcium Plus Foliar Fertiliser||Plasma Power Foliar Fertiliser|
The Company’s main business is situated in the City of Kaifeng located in Henan, a Province in central China. From there, the Company services 25 Provinces of China and exports to other Asian countries. The Company operates from a large 12,000 square metre (approx.) leased facility that houses formulation, packaging, storage and distribution services. The Company currently employs more than 100 people in its integrated manufacturing and sales business.
The Company has the rights to operate in China, as well as 19 other countries in the Asia region.
In recent years it has been working on establishing the distribution of RLF products into the greater-Asia region. Typically, this has been through the establishment of local Distribution Partnerships with agricultural distributors and retailers.
It takes time however, to establish distribution into new markets because the sales cycle typically involves product trials and evaluation programs, and sometimes lengthy government product registration procedures. This is often before products are sold to the market. Once in the market, a progressive sales ramp-up that may take many years is the typical pattern.
The Distribution Rights Agreement allows the Company to conduct its business in the countries identified on the world map.
The Operating Agreement provides for items such as, but not limited to:
The terms and conditions of these agreements are fully detailed in the Prospectus.
The Company has already embarked on these relationships in several Asian countries.
General Benefits of Specialty Fertilisers
The benefits of specialty fertilisers, such as the RLF Products, is that they:
|(a)||contain chemical characteristics intended to facilitate a more efficient uptake of nutrients into and within crops;|
|(b)||can improve efficiency in farming practices by providing chemical nutrition to crops which is proven to be a more effective method;|
|(c)||are easy to apply and can often fit into existing farm practices;|
|(d)||can be applied in a mixture with other agricultural chemical products such as pesticides (if chemically compatible), lowering the farmer’s application costs;|
|(e)||are typically applied with the intention of increasing crop productivity such as yield and quality (noting that results are subject to the individual circumstance of each crop situation);|
|(f)||can reduce the potential for nutrient loss to the environment through ground run-off, as application is typically through the leaf or seed and therefore bypasses the soil;|
|(g)||can result in increased natural soil quality achieved when a physically larger root system is developed and results in more microbial activity in the soil which remains after the crop has been harvested; and|
|(h)||can reduce the impact on the environment given their on-farm resource and|
|(a)||a 10-year history of strong product performance in China through demonstration and evaluation trials and on-farm use by the Company’s farmer customers;|
|(b)||key RLF Products have been demonstrated to result in the development of a larger and stronger root masses of plants which has a number of positive agronomic and soil benefits;|
|(c)||application methods for the RLF Products generally fit into existing farmer practices; and|
|(d)||the formulation of key RLF Products have been demonstrated to be chemically compatible with other agricultural products and chemicals such as pesticide, herbicides and fungicides. This allows RLF Products to be mixed with other agricultural products which the farmer can then apply to crops as a mixture in a single application, allowing farmers to save on time and costs associated with application.|