How has the Company Performed?
RLF in China operates with a predominantly Australian executive supported by Chinese
management and personnel.
The business has been materially operating since 2009. At this time, the Company was the first Australian Specialty Fertiliser company to have invested directly into the set-up of its own manufacture, packaging and distribution facilities. It also established its own local sales and technical support teams.
Today, the systems used in the development of the business have been based on the successful operations and execution of product sales and delivery. During this period, the Company has demonstrated its ability to scale the manufacture and supply of increased product demand.
The reputation of RLF in China is now based on many years of selling product into this
marketplace, to a wide range of returning customers.
Financially, the Company has steadily increased its operating performance year by year, and detailed Financial Information is contained within the Prospectus.
What are its Strategies Going Forward?
The Company’s operational strategy is relatively straightforward, as it is about expanding existing functions of the business through the increased investment in people and physical resources.
The expectation is that increased resourcing may result in an accelerated expansion of the existing business. The Company believes that by expanding the existing business it will be able to reach more of the market, and therefore have more potential for sales.
Its operational strategy is based on six actions:
- Employ more people in sales and customer support roles to expand the points of contact in the distribution channels which might result in more opportunity to increase sales through these channels.
- Release more Specialty Liquid Fertiliser products into the market (through R&D and product registrations) to develop more sales opportunities from the introduction of the new product lines.
- Establish a team of people focused on customer support and sales of the Company’s seed treatment products into the seed company or seed distributor markets.
- Establish and support sales through new and existing Distributor Partnerships in the other Asia markets outside of China.
- Capital investment in the manufacturing, packaging and distribution segments of the business to manage future supply requirements.
- Increase funding to marketing programs, such as field demonstrations and evaluating trials, farmer meetings, distributor meetings, electronic and print media, attendance at tradeshows and training resources.
Key Advantages of Specialty Fertilisers
The fertiliser market in which the Company operates is an emerging part of Asian farmers’ fertiliser practice. Demand for specialty fertilisers across Asia is growing as speciality fertilisers are proving to be an effective and viable alternative to conventional fertilisers and traditional practices which also align with many of the new policy directives introduced by Asian governments to address sustainable agricultural outcomes.
The Company is seeking to introduce farmers to the potential of specialty fertilisers because of their many agronomic advantages. These advantages can be categorised as improved application efficiencies and improved crop outcomes, as outlined below.
- Ease of application, together with the potential to mix with a wide range of crop protection products can deliver savings in time and labour, as well as with the reduced cost and number of applications required. This reduction in the cost of crop inputs increases the potential for greater agricultural productivity for the farmer or grower
- More efficient nutrient uptake in plants – because of the science and technology applied in the development of products – brings potential for reduced nutrient losses to the environment as they are typically applied with a foliar spray. Another important agronomic benefit is the value-add potential of increased natural soil quality which could be achieved when a physically larger root system is developed creating more microbial activity in the soil which remains after the crop has been harvested.
Specialty fertilisers are low impact with resource and labour-saving attributes that commonly deliver quality crops and produce that attract better financial returns at market.
Specialty fertilisers are a specialty product rather than a commodity product which differentiates them from other products within the fertiliser market. As a result, there are less direct competitor formulators and a lower number of specialty fertiliser products in the fertiliser marketplace, creating potential for better margins for the Company.
The RLF Products have up to a 25-year history of development and farmer use and provide a comprehensive range of nutrition products for most crop types, soil or plant therapies and for specialised agronomic growing situations which makes them attractive from a