As I was predicting for the past few weeks, the international company has failed to secure the project.
Reason being, too many crocodiles are in the pond, wide opening their mouth to eat the company alive. They wanted to operate their sites in 9states, and this has trigger the alarm of these states' "chiefs". Their excessive demand have frightened this company, and now they decide to relocate their project to China.
Sad but as usual, this is what happening everyday on this lovely land. Helpless.
So, now we are on our own.
We have build our operation by ourselves, and seek market ourselves as well. Luckily I was planning ahead if this method failed to perform. My preparation wasn't wasted now, although I seriously hope it does.
My Contingency Plan
We have to start small and slow now, this few months, will be our testing phase.
According to our progression, we will have 2tanks which able to accommodate 5000fishes in total. Third tank will be ready by June. Before any further expansion, we will perform some observation. Understand their growth rate, feedings require, ecology, and do estimation.
By July/August, we will be able to come out with some rough estimation of time and cost. Then we can have actual and precise calculation and expansion plan.
Method of Expansion
This few tanks will be our capital. They will act like our cash flow, and ROI.
With precise growth rate, we can calculate their time, cost and ROI, at the same time, estimate free cash for further expansion.
Through the studies I'd made, I believed that we can grow a 600g to 700g fishes in four/five months, with condition that the fishes coming in is already 3/4inches in size, or about 50-80g in weight.
Average selling price will be RM8 to RM9.50 each pieces of fish. Cost will be control below RM4. Therefore, I can perform at least 1.5times expansion.
If the cost can be lower than 3.50 each, I might get a chance to perform 2times expansion.
Estimate 1
Estimate each 600g fish will consume 1.1kg of food. Average price is 2,20, plus electricity and etc become
RM3. Then there will be RM 5 remain.
If 5000 fishes, there will be sales of 40k, and cost of 15k. Remaining 25k.
If I can setup a tank to accommodate 5000fishes with less than 10k, then I can perform a 2times expansion.
Estimate 2
I have another idea, which to find market which accept 200-250g fishes, average price of rm4 to rm5.
Then, I can buy in a 3inches/50g fishes with 0.40 cost each. Rear for 2months and resell for rm4.
Each fish(200g) is estimate to consume 270g of food, average at rm2/kg, which cost 0.55.
Total cost is about RM1 each, and profit of RM3.
Further more, my 2 tanks is able to accommodate 16k pieces, total profit of 48k.
I can easily expand 2times, which is 10k for tank, and 16k for food, and remain 22k as cash flow.
Which mean I have a profit of 11k each month.
Practising this method, I can harvest 6times a year, and that mean expand 6times.
2 to 4, 4 to 8, 8 to 16, 16 to 32, which my target is only 30tanks for the first year.
Total harvest 240k fishes every 2months, profit of 720k each harvest, monthly 360k profit.
If this method works, then I can easily open an acre of land to cultivate full grown fishes.
There will be 2 sets of full grown fishes:
My 30tanks giving out 240k fishes every 2months, sending into 12 large ponds and rear another 4months.
There will be 24 large ponds, rotating every 2months.
Outcome is, every 2months, I'll have 240k large fishes (700g), price at 9.50 each, total sales 2.2mil,
each fish consume 1.26kg/1.3kg of food, easier 1.5kg, average at rm2, rm 3 each fishes. Margin of 6.50.
Total profit is 1.56mil every 2months.
Annual profit of 9.3mil.
If the second method works, and we are able to work for 4years, we will have about 40mil of profit.
Saturday, April 17, 2010
Friday, April 16, 2010
All Shits Revoke
I can only say this, "WHAT THE FUCK!"
I'm quite sick and fed up with my father's acts. Sometimes I find it very difficult to catch his mind and understand him. Rapid change is what suitable to illustrate his mind. Everyday new set of thinking and new set of decision.
The Fishery Project
It is total mess now. The new tank is not install yet, and the 10,000fishes in ponds are in danger everyday. His stupid partner, threw all 10,000fishes which is less than 2inches in size each, into a damn big pond, without protection from their natural predators. There are snakes, birds who visit them everyday. Few hundreds of fishes are loss every single day. FUCK YOU IDIOT. I really feel like fucking that old fag.
Dude, you are using my money to do good will, fuck you.
I can spend it for better purposes.
Is had been a month since we said we gonna' build the tank. Up till today, we have only finished the foundation preparation. All because, my old man is friggin' stingy. He don't want to hire cheap labour to do the works. Dude, it will only cause him two or three hundreds and all works will be done. Instead, he asked us to do ourselves, which consume fucking lots of time and energy plus unprofessional ways. What The Fuck.
It should have been setup by now! This is the reason why he is still a tiny business owner for the fact he has been doing business for 30years. HE DON'T UNDERSTAND "LEVERAGE".
Leverage your capital, leverage your time, leverage your work-force... LEVERAGE.
His way of business-doing, only money in-flow, no out-flow.
Dad, you should rob a bank instead. Still, you must first buy guns and masks!
Sigh, my plan, was 2years to complete my entire set of cultivation. It seems now, it will take 20years.
If there is no sign for improvement of progressing speed, I'll quit. No point wasting my time for this fella' who love to waste his own time. I have better stuffs to do, I have better chance to do more things.
Paint Project
Ridiculously messy. One day saying wanna' improve quality, next day saying wanna' compete with price, then next day saying wanna' produce colour paste only.
Dad, pyramid doesn't build in a day, can you please focus to make your first brick?
Stick to it, until at least it has shaped? Don't to have to be complete, but at least has a shape, then only you start to think of something else? huh? Please don't always complify all the simple things?
God help me!
I'm quite sick and fed up with my father's acts. Sometimes I find it very difficult to catch his mind and understand him. Rapid change is what suitable to illustrate his mind. Everyday new set of thinking and new set of decision.
The Fishery Project
It is total mess now. The new tank is not install yet, and the 10,000fishes in ponds are in danger everyday. His stupid partner, threw all 10,000fishes which is less than 2inches in size each, into a damn big pond, without protection from their natural predators. There are snakes, birds who visit them everyday. Few hundreds of fishes are loss every single day. FUCK YOU IDIOT. I really feel like fucking that old fag.
Dude, you are using my money to do good will, fuck you.
I can spend it for better purposes.
Is had been a month since we said we gonna' build the tank. Up till today, we have only finished the foundation preparation. All because, my old man is friggin' stingy. He don't want to hire cheap labour to do the works. Dude, it will only cause him two or three hundreds and all works will be done. Instead, he asked us to do ourselves, which consume fucking lots of time and energy plus unprofessional ways. What The Fuck.
It should have been setup by now! This is the reason why he is still a tiny business owner for the fact he has been doing business for 30years. HE DON'T UNDERSTAND "LEVERAGE".
Leverage your capital, leverage your time, leverage your work-force... LEVERAGE.
His way of business-doing, only money in-flow, no out-flow.
Dad, you should rob a bank instead. Still, you must first buy guns and masks!
Sigh, my plan, was 2years to complete my entire set of cultivation. It seems now, it will take 20years.
If there is no sign for improvement of progressing speed, I'll quit. No point wasting my time for this fella' who love to waste his own time. I have better stuffs to do, I have better chance to do more things.
Paint Project
Ridiculously messy. One day saying wanna' improve quality, next day saying wanna' compete with price, then next day saying wanna' produce colour paste only.
Dad, pyramid doesn't build in a day, can you please focus to make your first brick?
Stick to it, until at least it has shaped? Don't to have to be complete, but at least has a shape, then only you start to think of something else? huh? Please don't always complify all the simple things?
God help me!
Wednesday, April 7, 2010
Project 2 - Update
Color Paste
The machine is almost stable, tomorrow will launch another round of testing.
We've checked the paste we produced half month ago and it seems to be just fine, just a little gelly, but it is consider normal for color paste. We found that none of the color has fluoculated or settled at the bottom. It is a very good sign of success.
If this continue to last for 2 to 3months, the color paste is consider succeed.
Paint
Beside of color paste, paint is still our major products. Tomorrow, we will be using our largest mixer to produce 200liters paint. It has been quite sometimes since we produce such amount of paint in a day. In fact, we believe it will takes less than half an hour to finish 100liters. While normally we spent few hours to produce this amount.
Also, through my findings of new formulation for galvanised steel paint, I have discovered a new material. Through several testing, it has shown very excellent result. It is not only suitable for galvanized steel, but in fact almost all surfaces. Plus, by adding this material into other resins, it improve their flexibility, toughness, and adhesion. This might be the answer to all unsolved problem. I named it VAB, but my dad named it CVB. No conclusion yet. It is now consider an additives to our formulation.
Strategy
Since we have solved so many problems that we've been having for the past few years, it is now time to re-take the market share. We will only need few more weeks to confirm all of our newly improved products. Then, we will massively promote our products. But I'm thinking to target large manufacturers. Through their recognition, we then will appoint agents to resell these products. We believe that some of the new invents will be gladly accepted by hardware stores as well.
If so, then the orders will not be less but massive.
The machine is almost stable, tomorrow will launch another round of testing.
We've checked the paste we produced half month ago and it seems to be just fine, just a little gelly, but it is consider normal for color paste. We found that none of the color has fluoculated or settled at the bottom. It is a very good sign of success.
If this continue to last for 2 to 3months, the color paste is consider succeed.
Paint
Beside of color paste, paint is still our major products. Tomorrow, we will be using our largest mixer to produce 200liters paint. It has been quite sometimes since we produce such amount of paint in a day. In fact, we believe it will takes less than half an hour to finish 100liters. While normally we spent few hours to produce this amount.
Also, through my findings of new formulation for galvanised steel paint, I have discovered a new material. Through several testing, it has shown very excellent result. It is not only suitable for galvanized steel, but in fact almost all surfaces. Plus, by adding this material into other resins, it improve their flexibility, toughness, and adhesion. This might be the answer to all unsolved problem. I named it VAB, but my dad named it CVB. No conclusion yet. It is now consider an additives to our formulation.
Strategy
Since we have solved so many problems that we've been having for the past few years, it is now time to re-take the market share. We will only need few more weeks to confirm all of our newly improved products. Then, we will massively promote our products. But I'm thinking to target large manufacturers. Through their recognition, we then will appoint agents to resell these products. We believe that some of the new invents will be gladly accepted by hardware stores as well.
If so, then the orders will not be less but massive.
Routine Update - Fishery
It has been few days without any new progress, all of sudden, things start moving again. It was a little chaos, a lot of new decisions and more complications involved. Due to certain reason, our cultivation biz can only last for 6years, start at April 2010. When is April 2016, we have let go the entire operation, or sell it off. It is so sad, but it has to be done.
Ambush
During the last update, I was saying that we will not do share operation with our neighbour. But, before we actually convey our message to him, he already made some moves. This cunning fox ordered 10,000 fries from breeder without informing us. So now we are forced to provide the capital to rear these fishes. This is a lesson for us, we have to be careful with this man. He is not a good partner, he is using us.
Fortunately, my dad made a smart move. He ask him to spare us 3,000pieces to test our tank. So, at least, we won't lose so much to him. So, we are now sharing 7,000fishes together. Expect 7months to harvest. Probably by Nov or Dec.
New Plan
Due to some incidents, we have decided to only operate this business for maximum 6years. So, we are having a very tight schedule to work things out, and get the best result out of it before we sell it. The reason is a little extraordinary and very personal which I will not disclose here. It has nothing to do with the nature of this industry, it was pure personal matter.
No matter, even if I can make a billionaire with this biz in the long-run, I have to let it go in just 6years. So, I've rearrange the entire plan to follow the pace.
We are now still waiting for the confirmation from the group, at the same time, we are building our testing phase. We've been clearing up the area to install tanks for the past two days. Although we haven't finish the clearing process, but we've done 2/3 of the area. Now we just have to finish it in this few days before the actual foundation getting install before tanks arrival.
If the group confirm with us, we will loan about 200k to 300k, plus some personal investment to start. The entire operation will be 2 to 5acres of land, although I wanted to have 10acres, but it seems quite unreachable due to the available of fingerlings stocks.
Because, if I operate 10acres of cultivation, I'll need 1.5mil fries each month, which I don't think I can get it easily. Therefore, I've downsize my cultivation to 2acres - 5acres. Even if 3acres is more than enough.
Structuring
Each acre will consist of 24ponds, size 20 x 80ft, 1600sqft, or fewer number of ponds but larger in size.
We will buy or prepare the 2months old fishes to put into these ponds. 24ponds will be divided into 4phases.
I'm expecting to my harvest cycle of each pond will be 4months. Dividing 24ponds into 4phases, will enable harvesting 6ponds per month. Resulting every month supplies.
Pond:
Generally, this size can accommodate 11,000 fishes (700gm).
But by using our new found technology, our pond will accommodate 22,000fishes.
2000 prepare for losses, and 20,000 expect to be harvest. Total of 14tons of production.
If each kg is given RM10, then we will have 140,000 sales per month.
Cost exclude building pond is expect to be 40,000. Margin available will be 100,000.
Resulting 600,000 each month per acre. If I can have 3acres will result a 2mil margin monthly.
Tactical Operation:
Due to limited capital, I've planned to have 4ponds at the begin. These 4ponds will act as the first batch of rotating supplies for each month. It can be tripling expand during each harvest, but I will take pre-caution of excess rapid growth. I'll only expand by doubling method (1 + 1).
For the first 4months, expecting each pond provide margin of 100k, so I'll start expanding from the very month, by adding one more pond. Then, 5th month, another 100k cash in, and add another pond and so on.
So, by the 8th months, I'm having 8ponds, which is 2ponds per harvest, and will be adding 2ponds each harvest.
By 12th month, we are having 16ponds.
By 16th month, 32ponds.
By 20th month, suppose 64ponds, but I might stop at 48ponds (2acres)
By 24th month, 128ponds (5acres), or I might stop at 72ponds (3acres).
Estimate:
Lets just use 2acres and 3acres for estimation.
Make it easier, use 24months as completion.
2acres are believe to harvest 12ponds a month, resulting 1.2mil margin monthly.
while 3acres will harvest 18ponds a month, and resulting 1.8mil margin monthly.
Each year will be 14mil / 21mil.
If 24month completion, there will be another 4years to harvest, and generating 56mil / 84mil at the 6th year.
When we sell it, we expect the total return will be 80mil to 100mil.
Technology Transfer
Now, because I'll have to stop my operation on the 6th year. I've decided to sell my technology after my expansion completed. I might not asking for cash term, but requesting some percentage of ownership/profit. And planning to have the percentage as long as the cultivation last.
Thus, I'll act as consultant to any incoming partners, and by far, I have no decision on limit yet.
Therefore, my total return might not be restricted by 80 to 100mil. It will be more and lasting.
It is all now waiting for the confirmation.
Ambush
During the last update, I was saying that we will not do share operation with our neighbour. But, before we actually convey our message to him, he already made some moves. This cunning fox ordered 10,000 fries from breeder without informing us. So now we are forced to provide the capital to rear these fishes. This is a lesson for us, we have to be careful with this man. He is not a good partner, he is using us.
Fortunately, my dad made a smart move. He ask him to spare us 3,000pieces to test our tank. So, at least, we won't lose so much to him. So, we are now sharing 7,000fishes together. Expect 7months to harvest. Probably by Nov or Dec.
New Plan
Due to some incidents, we have decided to only operate this business for maximum 6years. So, we are having a very tight schedule to work things out, and get the best result out of it before we sell it. The reason is a little extraordinary and very personal which I will not disclose here. It has nothing to do with the nature of this industry, it was pure personal matter.
No matter, even if I can make a billionaire with this biz in the long-run, I have to let it go in just 6years. So, I've rearrange the entire plan to follow the pace.
We are now still waiting for the confirmation from the group, at the same time, we are building our testing phase. We've been clearing up the area to install tanks for the past two days. Although we haven't finish the clearing process, but we've done 2/3 of the area. Now we just have to finish it in this few days before the actual foundation getting install before tanks arrival.
If the group confirm with us, we will loan about 200k to 300k, plus some personal investment to start. The entire operation will be 2 to 5acres of land, although I wanted to have 10acres, but it seems quite unreachable due to the available of fingerlings stocks.
Because, if I operate 10acres of cultivation, I'll need 1.5mil fries each month, which I don't think I can get it easily. Therefore, I've downsize my cultivation to 2acres - 5acres. Even if 3acres is more than enough.
Structuring
Each acre will consist of 24ponds, size 20 x 80ft, 1600sqft, or fewer number of ponds but larger in size.
We will buy or prepare the 2months old fishes to put into these ponds. 24ponds will be divided into 4phases.
I'm expecting to my harvest cycle of each pond will be 4months. Dividing 24ponds into 4phases, will enable harvesting 6ponds per month. Resulting every month supplies.
Pond:
Generally, this size can accommodate 11,000 fishes (700gm).
But by using our new found technology, our pond will accommodate 22,000fishes.
2000 prepare for losses, and 20,000 expect to be harvest. Total of 14tons of production.
If each kg is given RM10, then we will have 140,000 sales per month.
Cost exclude building pond is expect to be 40,000. Margin available will be 100,000.
Resulting 600,000 each month per acre. If I can have 3acres will result a 2mil margin monthly.
Tactical Operation:
Due to limited capital, I've planned to have 4ponds at the begin. These 4ponds will act as the first batch of rotating supplies for each month. It can be tripling expand during each harvest, but I will take pre-caution of excess rapid growth. I'll only expand by doubling method (1 + 1).
For the first 4months, expecting each pond provide margin of 100k, so I'll start expanding from the very month, by adding one more pond. Then, 5th month, another 100k cash in, and add another pond and so on.
So, by the 8th months, I'm having 8ponds, which is 2ponds per harvest, and will be adding 2ponds each harvest.
By 12th month, we are having 16ponds.
By 16th month, 32ponds.
By 20th month, suppose 64ponds, but I might stop at 48ponds (2acres)
By 24th month, 128ponds (5acres), or I might stop at 72ponds (3acres).
Estimate:
Lets just use 2acres and 3acres for estimation.
Make it easier, use 24months as completion.
2acres are believe to harvest 12ponds a month, resulting 1.2mil margin monthly.
while 3acres will harvest 18ponds a month, and resulting 1.8mil margin monthly.
Each year will be 14mil / 21mil.
If 24month completion, there will be another 4years to harvest, and generating 56mil / 84mil at the 6th year.
When we sell it, we expect the total return will be 80mil to 100mil.
Technology Transfer
Now, because I'll have to stop my operation on the 6th year. I've decided to sell my technology after my expansion completed. I might not asking for cash term, but requesting some percentage of ownership/profit. And planning to have the percentage as long as the cultivation last.
Thus, I'll act as consultant to any incoming partners, and by far, I have no decision on limit yet.
Therefore, my total return might not be restricted by 80 to 100mil. It will be more and lasting.
It is all now waiting for the confirmation.
Tuesday, March 30, 2010
Project 2 - Restructuring Paint MFG Biz
This project has been proposed and postponed since mid of last year, June, 2009.
The History of All Cause
My family has spent the past 20years in paint manufacturing business, and fortunately gained a lot of knowledge and experiences to know this industry from head to toe. In this 20years, I have to admit that there are times when our business was extremely good, and we are like monopoly a certain market in the region, but that has made us went into mismanagement.
The Cause
For the past 10years, there are no market expansion, no new product development, no new machinery investment, and in fact, no improvement in manufacturing method. Logical sense, we are going backward. Unfortunately, my dad is not aware of it, and for the past few years, I was fighting for my own career, and I too ignored it.
So, the outcome is, new competitors came into market, to make the situation worse, some of these competitors were actually our reselling-agents and they stole our method. Over the past 2years, 30% or more of our business has been stolen, and it is increasing. Some of them even outbeat us, and became leader in this region. And sadly, they spread rumours that our company is closing down, and took more of our clients.
The Story Begins
It was last June when I got to know about this. My dad was struggling with his employees problem. My dad wanted them to improve and become more systematic, but these people refuse to compromise. They are used to the old method, they are in their comfort zone and not willing to change. Worst, when my dad trying to implement new formulation and method, they sabotage the process. End up, some of them got fired and some of them quit their jobs.
Left only one worker and my dad in the factory, lead to unable to complete the orders in time, and result in losing more customers. It was the worst time for our factory, and all the while my father just being silent until he fell sick due to overload. After then only I found out that this situation is at critical stage. Only two way for us, we change or we fail.
My Decision
No matter how it is, this is my obligation as a son to help my father. I've decided to drop everything I have outside, and return to this downfalling business. I've spent all my time to study about the industry, the tech and etc, and frankly I couldn't get much information. This is an industry that very little percent of people in the world would ever step their foot in.
Still, I'd managed to digged some information from my father before I officially join him.
I've found that paint is merely an modified glue with colour. The properties of paint, to make it so called adhese/ stick on any surface are due to the type of 'glue' that you're using. The whole matter is about the colour properties. Then I understand why most of the manufacturers in this market are doing 'coatings' but not paint. Because, paint is difficult while coatings is merely a transparent layer of protection to surface. I finally see where is our stand and our advantage, as we've been dealing with colours ever since we started the business.
Potential
Come to my suprise is that, most of the coatings manufacturers outside do paint as well, but they don't produce the colour themselves. They bought something called 'colour-paste' from other producer. What they do is, the mix the colour into the glue they produced, and became paint.
It is not that they do not know how to produce colour, but is because it is complicated and difficult to control. Plus, the machines in the market are expensive, and high maintenance. It is more practical for them to buy the colours. In fact, all of our competitors now are buying the colours.
There I see the chance. There I know how we are going to strike back. I'm going to produce mainly colour paste.
Our Differences
Since there are so many others outside, how come we are able to produce colours without their hassles?
This is a little bit of history, my dad was a mechanical engineer, and he used to have a buyer from Japan who order large quantities of colour paste every month, and demanding for a fairly lower cost than ordinary market value. My dad invented his own machine during that time when he was fighting to get this client. He was head on with a few large company at that time, think of the paints in the market now, you name it, they are all in the same fight. End up, my dad won the contract.
Due to his low maintenance of machine, he is able to offer lower price. And that is why, he stopped progressing. He was too proud of himself.
My New Game Rules
So now, since the market has already developed into this new trend, "everyone can make paint".
I've planned a new strategy, I'll create more paint manufacturer instead of killing them off. I'm doing this for a win-win scenario.
To those who steal:
I'll sell the colour paste, indirectly pull certain % of profits from their business, as a compensation for us, also they are able to get cheaper and reliable source.
To those new comer:
I'm giving out technology, how to produce paint and technical support, as long they are buying colour paste from us. For this, we are able to capture larger market, plus back-fire those who stole from us. This is business.
Resulting
Through this, I can predict that instead of losing business, we are actually growing. Furthermore, matching colour for paint is actually a very difficult process. It consume a lot of time and need professional technique, plus there are high possibility of getting complaints from customers and needed to provide after sales service all the time.
So, by selling single-tone paste to professional manufacturers, we can reduce the hassle of services, we can reduce the works of matching colours, save more professional labours, save time. These 'saves' are the most critical point in business nowadays. You save, you win.
We can concentrate mainly in producing colour paste. The quantities are bulk, to sell and personal use, the delivery is limited. We do not have to travel the entire region just to send a few tins to several customers. The machine will be very simple to operate, even foreign workers can operate it according to instruction and formulation.
Re-start
This plan has been made around June-July 2009. But because I'm not yet ready to be in the factory, therefore it has been postpone for several months. One new machine has been built, and ready to perform testing since September 2009.
I finally join my father in March 2010, due to two reason. First, I find that I've delayed enough. Second, due to another project is about to launch.
Last 2 weeks, I've tested the new machine, and it resulted a success. There are only a few little minor problems to be modify then it will be fit to operation. With new formulation and new machinery, the paste produced are very fine compare to our previous production using old machines and methods. It is considered par quality with those selling in the market now, and yet we can have the same % of margins even if we market it with lower price.
We have decided to use these paste our own for 2months to see its result. If it is perfect, then we will start by selling basic black and white paste which the market consume the most. Yes, every colours you see, need to be tone by black or white. We will conquer the market with this 2 basic colours, then later introduce other basic colours such as red, blue, green, yellow, brown and maybe violet.
With this approach, I can see we are not only limited to regional business but capable to expand our market into northern and central region, capture the market of our competitors' origin suppliers.
As now, we are still in testing phase, more updates will be record here as results shown.
The History of All Cause
My family has spent the past 20years in paint manufacturing business, and fortunately gained a lot of knowledge and experiences to know this industry from head to toe. In this 20years, I have to admit that there are times when our business was extremely good, and we are like monopoly a certain market in the region, but that has made us went into mismanagement.
The Cause
For the past 10years, there are no market expansion, no new product development, no new machinery investment, and in fact, no improvement in manufacturing method. Logical sense, we are going backward. Unfortunately, my dad is not aware of it, and for the past few years, I was fighting for my own career, and I too ignored it.
So, the outcome is, new competitors came into market, to make the situation worse, some of these competitors were actually our reselling-agents and they stole our method. Over the past 2years, 30% or more of our business has been stolen, and it is increasing. Some of them even outbeat us, and became leader in this region. And sadly, they spread rumours that our company is closing down, and took more of our clients.
The Story Begins
It was last June when I got to know about this. My dad was struggling with his employees problem. My dad wanted them to improve and become more systematic, but these people refuse to compromise. They are used to the old method, they are in their comfort zone and not willing to change. Worst, when my dad trying to implement new formulation and method, they sabotage the process. End up, some of them got fired and some of them quit their jobs.
Left only one worker and my dad in the factory, lead to unable to complete the orders in time, and result in losing more customers. It was the worst time for our factory, and all the while my father just being silent until he fell sick due to overload. After then only I found out that this situation is at critical stage. Only two way for us, we change or we fail.
My Decision
No matter how it is, this is my obligation as a son to help my father. I've decided to drop everything I have outside, and return to this downfalling business. I've spent all my time to study about the industry, the tech and etc, and frankly I couldn't get much information. This is an industry that very little percent of people in the world would ever step their foot in.
Still, I'd managed to digged some information from my father before I officially join him.
I've found that paint is merely an modified glue with colour. The properties of paint, to make it so called adhese/ stick on any surface are due to the type of 'glue' that you're using. The whole matter is about the colour properties. Then I understand why most of the manufacturers in this market are doing 'coatings' but not paint. Because, paint is difficult while coatings is merely a transparent layer of protection to surface. I finally see where is our stand and our advantage, as we've been dealing with colours ever since we started the business.
Potential
Come to my suprise is that, most of the coatings manufacturers outside do paint as well, but they don't produce the colour themselves. They bought something called 'colour-paste' from other producer. What they do is, the mix the colour into the glue they produced, and became paint.
It is not that they do not know how to produce colour, but is because it is complicated and difficult to control. Plus, the machines in the market are expensive, and high maintenance. It is more practical for them to buy the colours. In fact, all of our competitors now are buying the colours.
There I see the chance. There I know how we are going to strike back. I'm going to produce mainly colour paste.
Our Differences
Since there are so many others outside, how come we are able to produce colours without their hassles?
This is a little bit of history, my dad was a mechanical engineer, and he used to have a buyer from Japan who order large quantities of colour paste every month, and demanding for a fairly lower cost than ordinary market value. My dad invented his own machine during that time when he was fighting to get this client. He was head on with a few large company at that time, think of the paints in the market now, you name it, they are all in the same fight. End up, my dad won the contract.
Due to his low maintenance of machine, he is able to offer lower price. And that is why, he stopped progressing. He was too proud of himself.
My New Game Rules
So now, since the market has already developed into this new trend, "everyone can make paint".
I've planned a new strategy, I'll create more paint manufacturer instead of killing them off. I'm doing this for a win-win scenario.
To those who steal:
I'll sell the colour paste, indirectly pull certain % of profits from their business, as a compensation for us, also they are able to get cheaper and reliable source.
To those new comer:
I'm giving out technology, how to produce paint and technical support, as long they are buying colour paste from us. For this, we are able to capture larger market, plus back-fire those who stole from us. This is business.
Resulting
Through this, I can predict that instead of losing business, we are actually growing. Furthermore, matching colour for paint is actually a very difficult process. It consume a lot of time and need professional technique, plus there are high possibility of getting complaints from customers and needed to provide after sales service all the time.
So, by selling single-tone paste to professional manufacturers, we can reduce the hassle of services, we can reduce the works of matching colours, save more professional labours, save time. These 'saves' are the most critical point in business nowadays. You save, you win.
We can concentrate mainly in producing colour paste. The quantities are bulk, to sell and personal use, the delivery is limited. We do not have to travel the entire region just to send a few tins to several customers. The machine will be very simple to operate, even foreign workers can operate it according to instruction and formulation.
Re-start
This plan has been made around June-July 2009. But because I'm not yet ready to be in the factory, therefore it has been postpone for several months. One new machine has been built, and ready to perform testing since September 2009.
I finally join my father in March 2010, due to two reason. First, I find that I've delayed enough. Second, due to another project is about to launch.
Last 2 weeks, I've tested the new machine, and it resulted a success. There are only a few little minor problems to be modify then it will be fit to operation. With new formulation and new machinery, the paste produced are very fine compare to our previous production using old machines and methods. It is considered par quality with those selling in the market now, and yet we can have the same % of margins even if we market it with lower price.
We have decided to use these paste our own for 2months to see its result. If it is perfect, then we will start by selling basic black and white paste which the market consume the most. Yes, every colours you see, need to be tone by black or white. We will conquer the market with this 2 basic colours, then later introduce other basic colours such as red, blue, green, yellow, brown and maybe violet.
With this approach, I can see we are not only limited to regional business but capable to expand our market into northern and central region, capture the market of our competitors' origin suppliers.
As now, we are still in testing phase, more updates will be record here as results shown.
Routine Update - Fishery Cultivation
Nothing new, just a little change of plan.
Sharing?
Become non-sharing. Before, we thought that we will operate our testing phase together with our neighbour, who has a ready-made pond, which capable to accommodate up to 20,000fishes at once. But now, since we have consider the pros and cons of joint-venture, and the personality of this neighbour, we've decided to drop the origin plan.
It is not that we are selfish, but at this stage, every aspect is unknown. We cannot estimate the outcome.
The exact duration, exact production, exact costing regarding utilities, feedings and other materials or labour cost and man-power needed. It is very difficult to decide how we are going to share the margins, especially this neighbour does not offer financial venture. He only offered to share us the pond, and we will have to pay for feedings.
Which is quite unfair to us in a way. We have to invest a lot equipments cause we plan to only transfer the fishes into the pond once they reach certain size, and they will only stay two months in the pond before market. Before they are in the pond, the fishes will be under our hand for at least four months. It is like a landlord offer a land for farmer, and enjoy 50% of the harvest, which in general case is ridiculous. We do not deserve this, especially if our operation made a success model. He will eventually gain access to all technical information, enjoy the fruitful harvests and at the end, he will operation his own and evict us from the pond. We have no bargain power at all.
Instead...
We will build several tanks for testing, including the 3tanks that we'd bought, and later will add another cement tank, to make it four tanks in total. We estimate will have the fishes in tank for at least 4 to 5months before we market them. Furthermore, we will not keep the fishes from 'fry' stage, which I recommended to my dad before.
We will have our stockings which already at growing stage, about 2months old, 3-4inches in length, weight unknown.
Benefits
1) Larger size stockings
Although it will be more costly, but it will save us 2months of operation, which in the long-run, we are able to increase the harvesting frequents, which in general, each tank is able to produce at least 3harvest in a year.
As business is all about cashflow, with more frequent in-flow of cash, operation made easier and it too produce more faster expanding.
2) Sites
Even if later, we wanted to make it a large scale cultivation, with the success model in hand, also harvesting cash-flow at the same time, we can easily arrange agreement with any interested parties and we have stronger bargain power. We are able to layout the costing and ROI. Mutual benefitial agreement can be strike with this approach.
Furthermore, we can too have our own ponds being constructed if we wanted to. Then there will be no leakage of technology and technical information. We are likely to adapt this way unless we are not able to find any strategically and environmetally friendly area.
3) Partnering
We will only deal with one partner, which is a very simple partnership. We are the supplier, they are the buyer. There will be no hanky-panky things in between. There will be no worries of by-passing or any other. This will create a long-term steady and sustainable partnership.
4) Decision Makings
There is no need for votings. Most of the time, partnering in a business can create a lot of chaos. Be it financially or operational. There will be people who doens't want to involve into works but expect to have equal returns, or not willing to re-invest into a larger scale and so on. Each of these issues are capable to cause a break-down, and eventually dissolve.
Since this business has prove to have its value and unpredictable and unlimited potential, we rather spend more time to expand on our own, than giving chance for chaos to come in.
New Conclusion:
We will be going on our own. Smaller scale but same return as we do not need to split our margins. We will launch our testing phase within April, and expect to complete by August. Layout of statistic growth, costing and other issues will be recorded to perform analysis and improvement modifications.
Also, if the result is good as we estimate during the first two months of operation, and the group is able to confirm with us during April or May, we might straight pour in a large sum of investment and kick start this cultivation business.
Time will tell, and we'll see.
Sharing?
Become non-sharing. Before, we thought that we will operate our testing phase together with our neighbour, who has a ready-made pond, which capable to accommodate up to 20,000fishes at once. But now, since we have consider the pros and cons of joint-venture, and the personality of this neighbour, we've decided to drop the origin plan.
It is not that we are selfish, but at this stage, every aspect is unknown. We cannot estimate the outcome.
The exact duration, exact production, exact costing regarding utilities, feedings and other materials or labour cost and man-power needed. It is very difficult to decide how we are going to share the margins, especially this neighbour does not offer financial venture. He only offered to share us the pond, and we will have to pay for feedings.
Which is quite unfair to us in a way. We have to invest a lot equipments cause we plan to only transfer the fishes into the pond once they reach certain size, and they will only stay two months in the pond before market. Before they are in the pond, the fishes will be under our hand for at least four months. It is like a landlord offer a land for farmer, and enjoy 50% of the harvest, which in general case is ridiculous. We do not deserve this, especially if our operation made a success model. He will eventually gain access to all technical information, enjoy the fruitful harvests and at the end, he will operation his own and evict us from the pond. We have no bargain power at all.
Instead...
We will build several tanks for testing, including the 3tanks that we'd bought, and later will add another cement tank, to make it four tanks in total. We estimate will have the fishes in tank for at least 4 to 5months before we market them. Furthermore, we will not keep the fishes from 'fry' stage, which I recommended to my dad before.
We will have our stockings which already at growing stage, about 2months old, 3-4inches in length, weight unknown.
Benefits
1) Larger size stockings
Although it will be more costly, but it will save us 2months of operation, which in the long-run, we are able to increase the harvesting frequents, which in general, each tank is able to produce at least 3harvest in a year.
As business is all about cashflow, with more frequent in-flow of cash, operation made easier and it too produce more faster expanding.
2) Sites
Even if later, we wanted to make it a large scale cultivation, with the success model in hand, also harvesting cash-flow at the same time, we can easily arrange agreement with any interested parties and we have stronger bargain power. We are able to layout the costing and ROI. Mutual benefitial agreement can be strike with this approach.
Furthermore, we can too have our own ponds being constructed if we wanted to. Then there will be no leakage of technology and technical information. We are likely to adapt this way unless we are not able to find any strategically and environmetally friendly area.
3) Partnering
We will only deal with one partner, which is a very simple partnership. We are the supplier, they are the buyer. There will be no hanky-panky things in between. There will be no worries of by-passing or any other. This will create a long-term steady and sustainable partnership.
4) Decision Makings
There is no need for votings. Most of the time, partnering in a business can create a lot of chaos. Be it financially or operational. There will be people who doens't want to involve into works but expect to have equal returns, or not willing to re-invest into a larger scale and so on. Each of these issues are capable to cause a break-down, and eventually dissolve.
Since this business has prove to have its value and unpredictable and unlimited potential, we rather spend more time to expand on our own, than giving chance for chaos to come in.
New Conclusion:
We will be going on our own. Smaller scale but same return as we do not need to split our margins. We will launch our testing phase within April, and expect to complete by August. Layout of statistic growth, costing and other issues will be recorded to perform analysis and improvement modifications.
Also, if the result is good as we estimate during the first two months of operation, and the group is able to confirm with us during April or May, we might straight pour in a large sum of investment and kick start this cultivation business.
Time will tell, and we'll see.
Monday, March 29, 2010
Getting Ready
I've spent my weekend discussing with a few friends.
So far, all of them are optimistic and confident with my proposal.
The Sites
At the moment, they are willing to give out their land, convert into cultivation site. There are several locations from these friends, which is :
1) Malacca - about 80acres available - of course I don't need all.
2) Johor - more than 100acres available, which I might only need less than 10%.
3) Pahang - 30acres available.
4) Penang - 30acres.
These are all rubber and palm oil estate, and water source, and capable to convert into fish farming. I'm shock to find out one of the friend is already starting to cultivate himself, but he doesn't have the right knowledge and method to build a large scale farming.
So, if I get the confirmation, these areas are ready to launch.
New Equipments
When I got home, my dad told me he already acquire a few tanks which the size is 6m x 5m, to launch our medium size testing phase. It is like the size of a small lap pool. I'm wondering if I can keep one to use as a private pool to myself... haha, well, I guess we don't need those used fiber tank anymore.
Beside, he already bought the water jet pump, which capable to produce extra oxygen.
General jet pump only able to provide H202 or H2O3. But this one is H2O5.
Which mean, with a similar size of tank, I can keep double amount of fishes, and that actually save up a lot of land used.
The Feeds
We have a conclusion to use chicken diets, fish pellets, fish meal, trouts and copra waste, which so happen we have the access to the sources. That will help reduce the feeding cost from about 45% to 25%. If we can successfully cultivate them as normal growth rate, then we can easily doubling expand our farm from each or 2harvests.
Bio-Filter System
This one is tricky. From all equipments, this is the most expensive one. Generally we can get one from the market at no more than 2000, but because we are having a very large scale farming soon, those are not suitable.
So happen again, there is a friend who have this filter system, but he has no extra time or cash to launch his own farm. We are now working the possibility with him to join us. If he agree, (which I don't see any reason for him to not agree), then we can start already.
First Farm
We are planning to work out an acre size farm at the beginning, this will take less than a year to complete, as we wanted to save capital and start small. Then, we will expand another 2acres, altogether 3acres. Estimate will be complete in less than 2years, with a production of 100 to 150tons monthly.
After this is done, then we will launch larger scale at another area and other states.
Back-up Plan
No matter if the confirmation is coming or not, we are still going to start the cultivation. I've contact with some friends who are rich with connections, and if I need to export these fishes, I use their help to get all certifications done, and export to middle-east. As some of them already exporting poultry into middle-eastern market, so I guess I can easily hop in.
But, I hope this is not necessary.
So far, all of them are optimistic and confident with my proposal.
The Sites
At the moment, they are willing to give out their land, convert into cultivation site. There are several locations from these friends, which is :
1) Malacca - about 80acres available - of course I don't need all.
2) Johor - more than 100acres available, which I might only need less than 10%.
3) Pahang - 30acres available.
4) Penang - 30acres.
These are all rubber and palm oil estate, and water source, and capable to convert into fish farming. I'm shock to find out one of the friend is already starting to cultivate himself, but he doesn't have the right knowledge and method to build a large scale farming.
So, if I get the confirmation, these areas are ready to launch.
New Equipments
When I got home, my dad told me he already acquire a few tanks which the size is 6m x 5m, to launch our medium size testing phase. It is like the size of a small lap pool. I'm wondering if I can keep one to use as a private pool to myself... haha, well, I guess we don't need those used fiber tank anymore.
Beside, he already bought the water jet pump, which capable to produce extra oxygen.
General jet pump only able to provide H202 or H2O3. But this one is H2O5.
Which mean, with a similar size of tank, I can keep double amount of fishes, and that actually save up a lot of land used.
The Feeds
We have a conclusion to use chicken diets, fish pellets, fish meal, trouts and copra waste, which so happen we have the access to the sources. That will help reduce the feeding cost from about 45% to 25%. If we can successfully cultivate them as normal growth rate, then we can easily doubling expand our farm from each or 2harvests.
Bio-Filter System
This one is tricky. From all equipments, this is the most expensive one. Generally we can get one from the market at no more than 2000, but because we are having a very large scale farming soon, those are not suitable.
So happen again, there is a friend who have this filter system, but he has no extra time or cash to launch his own farm. We are now working the possibility with him to join us. If he agree, (which I don't see any reason for him to not agree), then we can start already.
First Farm
We are planning to work out an acre size farm at the beginning, this will take less than a year to complete, as we wanted to save capital and start small. Then, we will expand another 2acres, altogether 3acres. Estimate will be complete in less than 2years, with a production of 100 to 150tons monthly.
After this is done, then we will launch larger scale at another area and other states.
Back-up Plan
No matter if the confirmation is coming or not, we are still going to start the cultivation. I've contact with some friends who are rich with connections, and if I need to export these fishes, I use their help to get all certifications done, and export to middle-east. As some of them already exporting poultry into middle-eastern market, so I guess I can easily hop in.
But, I hope this is not necessary.
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