Correct Tony My calcs are approx and based on the $1m per year...

Correct Tony

My calcs are approx and based on the $1m per year estimate (rather than the quarterlies).

Like my initial assumption of a bag per day per household, you get to over 100m bags per year just from this contract to supply 5-7% of household in the Nanjing area.

BUT

We also hear in this announcement:

"The win follows the recent expansion of Cardia’s production capability with a move to a new factory in
Nanjing. The new factory has increased Biohybrid™ and Compostable bagmaking capacity to 100million bags per year, meeting the increasing global demand for Cardia’s carry and waste management bags, hygiene and nappy films and custom products."

SO

On the basis of the above reasonable assumption of one bag per day per household for the contract covering just 7% of the Nanjing population, Cardia exceeds its annual Composting bagmaking capacity out of this new factory...and it exceeds its global demand for Cardia's waste management bags alone (based on the above quote).

That does not compute.



So I scaled back my household usage estimate of those average sized bags to a measly one per week (seems way too few but anyway, just for the sake of the conservative argument), in order to conservatively estimate what the annual consumption of this contract equates to. Divide your 109,500,000 by 7 if you like and you get 15,642,857 bags per year or approx 16% of the annual factory capacity, that now has a capacity of 100m bags per year to meet increased global demand.

Well, if they expand the rollout to more than just 7% of Nanjing households (surely a reasonable expectation) to even 40% of Nanjing households (on the conservative estimate of one bag per week - which surely cannot be that low), they exceed the global demand for Cardia Bags out of Nanjing city alone.

As I said, something does not compute here. Either the global demand is out by a factor of maybe 100, or their planning is way out of kilter. And on the basis of our conservative numbers, the factory is only capable of turning over approx $6m of sales per year.  Surely they are not going to build a factory per contract.