Rubicon

[winner69]

Yes we will be reading the presentation with interest. Sadly I think many of us are losing faith in the guys/troughers running this operation. They have shown us no indication they care much for us small SH and are not really yet doing anything concrete to make this the great company it should be. It is a real disappointment but I am still hanging in there.

Investing is often about believing a story and keeping the faith.

Hang in there might be best option

[THEONE]

12 months ago people were talking like Rubicon was going to make them rich...Now it is the end of the world.

As far I can see if you believed the story 12 months ago, you should still believe it now...

The company seems much the same...if this trade agreement is resolved...Then maybe the timing would be ok for an IPO?

I

[Biscuit]

...As far I can see if you believed the story 12 months ago, you should still believe it now...

Or, if you don't believe the story now, maybe you were wrong about it 12 months ago?

[Leftfield]

12 months ago people were talking like Rubicon was going to make them rich...Now it is the end of the world.

Not quite the end of the world....however some of us consider our money as a precious scarce commodity and only put our $ in shares that are trending up, or performing better than the NZX 50.

By taking my money out of RBC there have been better gains elsewhere in the last 12 months ( think ATM and even PLX) while RBC has lost value had I held it.

Should the RBC story change, I'll be back. But until RBC prove themselves, I'm happy to have my money performing, not sitting idle.

[winner69]

Ive never worked out why there’s been so much hype around Arborgen .......after all all they do is grow seedlings and hock them off......and because the seeds are apparently so special the gathering of them looks rather labour intensive if the videos are anything to go by.

But then again I often don’t see the whole picture.

[SilverBack]

Its not about the seeds. It is about beating the competition with a superior product. Mr Ford could not make money on a single Model T but he made a fortune selling 100,000 of them even though there was a factory full of people adding components to the vehicle. Actually, Arborgen sells plants, not seeds. It grows "seedlings" and sells them by the millions.
Arborgen has to succeed with a superior tree for timber or for pulp and trees grown from seedlings. So, what drives demand for Arborgen's seedlings?
Firstly, marketing itself with a superior product. When did we last see any announcement about an industry presentation?
Secondly, meeting demand. What causes a demand for seedlings? The need for new trees to replace milled or damaged trees (as in windblown) of course. Trees are milled to feed into pulp and paper mills, or for building construction, or for crating (e.g. pallets).
Thirdly, what delay is there after losing a tree or felling it and replacing it? 12-24 months? I guess it depends on the country and I am not a forester but my observation from driving through forested areas in NZ is that they stay fallow for a good while.
Commercial forests do not increase in size very much, although carbon sink initiatives may start to change that. However, replacement planting which drives Arborgen sales opportunities will be more or less in line with the consumption of mature trees but subject to the replanting delay.
Drivers for timber are mostly building construction and pulp while the USA is Arborgen's big market. Tree destruction through hurricane or other strong winds must also provide demand for seedlings for replacement planting with a longer delay to allow for removal and sale of windthrown timber.
The other factor to affect timber sales is competition from other countries. Remember when Russia was felling its "endless" taiga of firs. The NZ forestry market was heavily impacted even though the Siberian timber was low grade.

It does indeed appear that Arborgen has little awareness of Rubicon shareholders and Rubicon has little management. Hence the neglect of shareholder information, other than statutory. What is the point of retaining Rubicon as a holding company any longer? May as well list Arborgen in the USA with an ADR setup for overseas investors and wind Rubicon up.
A pox on Rubicon and its management is all I can say at this point.

[Leftfield]

Good post SilverBack.

I would like a good environmentally friendly 'green' stock in my portfolio, but need to be convinced that RBC offers a 'leading edge'.

[winner69]

Its not about the seeds. It is about beating the competition with a superior product. Mr Ford could not make money on a single Model T but he made a fortune selling 100,000 of them even though there was a factory full of people adding components to the vehicle. Actually, Arborgen sells plants, not seeds. It grows "seedlings" and sells them by the millions.
Arborgen has to succeed with a superior tree for timber or for pulp and trees grown from seedlings. So, what drives demand for Arborgen's seedlings?
Firstly, marketing itself with a superior product. When did we last see any announcement about an industry presentation?
Secondly, meeting demand. What causes a demand for seedlings? The need for new trees to replace milled or damaged trees (as in windblown) of course. Trees are milled to feed into pulp and paper mills, or for building construction, or for crating (e.g. pallets).
Thirdly, what delay is there after losing a tree or felling it and replacing it? 12-24 months? I guess it depends on the country and I am not a forester but my observation from driving through forested areas in NZ is that they stay fallow for a good while.
Commercial forests do not increase in size very much, although carbon sink initiatives may start to change that. However, replacement planting which drives Arborgen sales opportunities will be more or less in line with the consumption of mature trees but subject to the replanting delay.
Drivers for timber are mostly building construction and pulp while the USA is Arborgen's big market. Tree destruction through hurricane or other strong winds must also provide demand for seedlings for replacement planting with a longer delay to allow for removal and sale of windthrown timber.
The other factor to affect timber sales is competition from other countries. Remember when Russia was felling its "endless" taiga of firs. The NZ forestry market was heavily impacted even though the Siberian timber was low grade.

It does indeed appear that Arborgen has little awareness of Rubicon shareholders and Rubicon has little management. Hence the neglect of shareholder information, other than statutory. What is the point of retaining Rubicon as a holding company any longer? May as well list Arborgen in the USA with an ADR setup for overseas investors and wind Rubicon up.
A pox on Rubicon and its management is all I can say at this point.

Silverback ....you haven’t convinced me that Arborgen is that special or unique (if that was your intention)

The seedlings (plants) might be special but are they that special they will command a premium price over a long period of time.

The videos showing how they collect seeds gives me the heebie geebies - seems very labour intensive.

And you have outlined the risks very well.

Will watch with interest - one day it might worth a punt

[ari]

Originally Rubicon was set up to also establish and commercialise selected emerging technologies....yeah right. As for US listing surely the conditions are better now than for failed attempt in 2010.
Fletchers were never really shareholder friendly...Fletcher Energy and Capstone comes to mind.....

[SilverBack]

Silverback ....you haven’t convinced me that Arborgen is that special or unique (if that was your intention)

The seedlings (plants) might be special but are they that special they will command a premium price over a long period of time.

The videos showing how they collect seeds gives me the heebie geebies - seems very labour intensive.

And you have outlined the risks very well.

Will watch with interest - one day it might worth a punt

Yes, Arborgen's MCP seedlings do command a premium price but recognise that they also sell large quantities of OP seedlings (open pollination). If you could refer to the 2018 presentation http://rubicon-nz.com/media/1414/18-...esentation.pdf then Slide #19 shows a price graph (tried copying into this post but exceeds max size).
The MCP process is no doubt expensive but since the company can produce many thousands of seedlings from one seed using cloning, then that cost will be much reduced on a per seedling basis.
Arborgen indicate that their compelling strategic advantage is the genetic database that they own. This contains the results of trials and research over decades in a number of different countries. They state that it would be very difficult for a competitor to put a similar database together and of course, Arborgen will continue to progress its own findings. Arborgen used to have several multi-national owners from the forest and paper industries who contributed their own genetic libraries and although they sold out of Arborgen they left the libraries behind. With the genetic libraries, Arborgen is able produce more quickly and reliably, seedlings adapted to particular purposes, climates and environments.
If you refer to slide #8 then you will find the significant economic advantages to forest owners by using Arborgen premium seedlings.
I thought RBC was worth a punt last year after it became the holding company for just Arborgen, while Arborgen with new significant shareholders was freed from the inertia imposed by the old industry holders but it is taking longer for net profits to come through. The hurricane had an impact both on Arborgen plantations but more so on its customers in the southern USA, while the Brazil market is still building up.