SCT - Scott Tech

[Snoopy]

Where does the joint venture between Silver Fern Farms and Scott's sit? (Robotic Technologies). Does half of the profit through the joint venture go to SFF? Our does the JV just cover the development?

Bob, the RTL joint venture with Siver Fern Farms owns all the IP relating to lamb processing that SFF have expressed an interest in. Any new IP is offerred to the joint venture first. If SFF are not interested, then that IP becomes owned by Scotts on its own. RTL I think is more of a 'paper company' in that they don't have many (any?) staff that are exclusively RTL.

If you go to note 26 of AR2015 you will see that Scott's carried out $1.201m of manufacturing work for RTL in FY2015. Scott's will have a made a 'contracting margin' on this work (perhaps 15%, Scott's ROE target?). RTL AFAIK, have no independent workshop of their own. So to answer your question directly I think that RTL is basically a development company that holds the relevent lamb industry intellectual property. In theory JBS do not have free access to RTL IP, despite controlling Scotts, because Silver Fern Farms has 50% of the shares in RTL.

But how would RTL get their contracting work done independently of Scotts (aka JBS) in the future? No independent staff! I don't think they can!

SNOOPY