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Red flags, page-2

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BarrelSitter

275 Posts.

75

16/10/18

10:37

Post #: 36136570
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Originally posted by Rothbard: ↑

OGA's announcement of 12 October raised several concerns.

The first was the standard of the writing. As I previously posted, the announcement contained numerous grammatical errors and other instances of poor quality writing, and it was illogical at one point.

Now I don't expect abalone fishermen to necessarily have great writing skills. This could be why OGA (perhaps quite sensibly) outsourced quality control to a locally-based media consultant. But that decision appears to have let them down.

This brings me to a second and potentially more serious concern: OGA's stated 'philosophy of supporting regional businesses, who use workers from the local community.'

The worry is that this philosophy will have broader implications for the company's performance. For example, the 12 October announcement detailed the appointment of a builder to construct OGA's processing facility. OGA appointed a 'regional business'. Did OGA's philosophy perhaps lead it to reject the tenders of some other bidders - who may have submitted superior proposals - partly on the basis that they were not located in the region?

The third concern is that the website of the builder that OGA selected reveals a focus on being 'eco-friendly, creative and sustainable'. It's all very well being eco-friendly, creative and sustainable, but what's being built is a processing facility, not a dream home. The question is whether OGA shareholders will end up footing the bill for unnecessary and inefficient 'creative' and 'eco-friendly' features.

To sum up, I'm detecting a leftist culture at OGA. I may be mistaken. However, aquaculture has enough inherent challenges without being hampered by a leftist corporate culture and problematic company philosophies. I'm not prepared to take on that additional risk. I'm out.

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You are entitled to your view.
What matters is the attitude of our customers. We are selling a unique free-range product to a market which is notoriously fastidious in food matters.
As with other eco-products, the market is prepared to pay a premium. The difference in price between free-range and farmed abalone is of the order of 2:1.
https://www.sydneyfishmarket.com.au/seafood-school/seafood-info/species-info/species-details?specieID=134&fishID=42#.W8Ug22gzaUkhttps://www.sydneyfishmarket.com.au/seafood-school/seafood-info/species-info/species-details?specieID=134&fishID=42#.W8Ug22gzaUk

quotes $100/kg for free-range, while

http://www.abc.net.au/news/2017-06-09/abalone-farming:-when-lying-down-on-the-job-is-good-for-business/8601272

quotes $40/kg for farmed.

OGA Price at posting: 14.0¢ Sentiment: Buy Disclosure: Held
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