the cream went sour, page-2

GPASAS

Decided to dig deeper because I would love to have a case for re-investing. Some of the strangest facts came to light:

1. 20% of the revenue ( Quarry and mineral) generates 60% of the EBITDA. 80% of the revenue only generates 40% of the EBITDA.

2. Produces up to 300,000 tons of soda ash and Penrice supply approximately 80% of the local market needs. That isnt a direct relationship as I understand Penrice imports some of its needs so that it has the ability to marginal cost it supply. They wouldn't give me figures.

3. They consider themselves a low cost producer - almost choked on that one. Then when I looked at it with very few if any Soda ash plant upgrades I realised that that may well be the gap. Contacted a friend of mine in the chemical industry who disagrees with Bacci. He believes that you will never replace a Solvay plant but that you would make upgrades which would reduce staffing costs and control it more. He has experience on old refineries and says that there is a whole industry around upgrading via technology without changing the core plant and equipment. He believes that that exists in Solvay process plants as well.

4. Given this than something must be pretty wrong in this plant at the moment and I have decided to approach them to discuss their business.

I own a few only to be on the register.