I got a random email today touting Plandai Biotechnology (PLPL) as an investment. They specialize in plant extracts from crops on their private farm in South Africa. I've never heard of plant extracts but somehow these highly concentrated forms of green tea and other goodies are useful as healthy ingredients. I'll look for these things the next time I shop at Trader Joe's.
The key personnel as listed today do not mention anyone with professional experience in agriculture, although their advisors have experience in the life sciences. Just remember that advisors don't run a company. I once tried to mentor an entrepreneur who wanted me to do all of his work for him. I said no and we parted ways because that's not how advisory relationships work. People who say they own an idea are responsible for making it a business.
Marketing these extracts to Big Pharma or the food sector comes down to more than just having contacts in distribution chains. I don't know what the size of the market is for plant extracts but if they plan to sell in the US they'll need USDA and/or FDA approval. Plant product imports are subject to USDA controls. Dietary supplement manufacturers must notify the FDA of any new ingredients they use in products. The sole source farm in South Africa is also a concern. South Africa ranks 69th on Transparency International's Corruption Index and 74th on the Heritage Foundation's Index of Economic Freedom. Those rankings don't matter so much for South Africa's diamond producers but they do matter for something non-strategic like agribusiness.
This stock has been publicly traded since 1995. The price pretty much fell off a cliff in August 2008 and it's been all downhill from there. Read their 10-Q for May 20, 2013 to learn that they did a share exchange in 2011 that totally reinvented the company. Their balance sheet showed $575K cash on hand but a net loss of over -$1M (unadjusted), so they will be in a perpetual state of raising capital for some time if they want to survive.
Plandai isn't the right fit for my portfolio. It wasn't the right fit for my inbox either, so I deleted that email message.
Full disclosure: No position in PLPL at this time.
The key personnel as listed today do not mention anyone with professional experience in agriculture, although their advisors have experience in the life sciences. Just remember that advisors don't run a company. I once tried to mentor an entrepreneur who wanted me to do all of his work for him. I said no and we parted ways because that's not how advisory relationships work. People who say they own an idea are responsible for making it a business.
Marketing these extracts to Big Pharma or the food sector comes down to more than just having contacts in distribution chains. I don't know what the size of the market is for plant extracts but if they plan to sell in the US they'll need USDA and/or FDA approval. Plant product imports are subject to USDA controls. Dietary supplement manufacturers must notify the FDA of any new ingredients they use in products. The sole source farm in South Africa is also a concern. South Africa ranks 69th on Transparency International's Corruption Index and 74th on the Heritage Foundation's Index of Economic Freedom. Those rankings don't matter so much for South Africa's diamond producers but they do matter for something non-strategic like agribusiness.
This stock has been publicly traded since 1995. The price pretty much fell off a cliff in August 2008 and it's been all downhill from there. Read their 10-Q for May 20, 2013 to learn that they did a share exchange in 2011 that totally reinvented the company. Their balance sheet showed $575K cash on hand but a net loss of over -$1M (unadjusted), so they will be in a perpetual state of raising capital for some time if they want to survive.
Plandai isn't the right fit for my portfolio. It wasn't the right fit for my inbox either, so I deleted that email message.
Full disclosure: No position in PLPL at this time.
