Dax Cooke’s 12/29/2017 CEO Update
During the month of December, we have been busy planning for the year-end, setting the agenda for 2018, and celebrating a very productive 2017. The holidays are a reminder of everything we work for and they give us motivation for the following year. This season, during my visit to Pietrasanta, I have been reminded that the human spirit, combined with hope and direction, is perhaps the most powerful motivator and the greatest gift one can receive.
It was our second Christmas celebration at the farm. This year, we hosted 90 employees and spouses along with their 70 children for a total of 160 people! I was very much looking forward to this year’s event, given that we have accomplished so many things. As I woke up that morning and drove to the airport, I was reflecting on the first time that we visited the farm over 2 years ago. In November 2015, Peter Kern and I walked to the top of the highest mound at Pietrasanta and we knew immediately that we had found the right land. This year, as we arrived in Monteria, Peter and I were were picked up by Hernan, the farm manager. As we joked about the condition of the road the first time we visited and how much better it was now…then suddenly: Boom!!!
Running a little late for the party, we pulled into the farm and suddenly the car was mobbed by 70 kids chanting: “Thank you… Thank you… Thank you”. As I exited the car and was surrounded by children and parents shaking my hand and thanking me, I thought to myself, why are they thanking me? Not knowing how to react, I thanked everyone for the warm welcome and told them we had a great celebration for them.
Oscar, Peter, Andrea and I made our way to the corral, where the staff had prepared a stage filled with gifts and decoration. As the ceremony began, the eldest employee, Alejandro Pimenta, began by delivering a blessing. As he began, I was expecting a traditional blessing of a few minutes. However it turned out to be an incredibly emotional story of him thanking God for answering his prayers and bringing life to his community. As he passionately gave thanks, I suddenly realized why these people had been thanking me. We had given them something they had been praying for: hope and the prospect of a better future. As Alejandro went on, it became more and more obvious that our project is changing more than just the landscape; it’s changing the way people think and the prospect of a better future is bringing people together. If that isn’t impact investing, then I don’t know what is.
As I made my way to the stage to deliver my message, I couldn’t help but feel the emotion of the strong message Alejandro delivered. As I stood in front of the crowd looking at all of the faces, I had a rush of energy and a chill run up my spine. Battling a flu for the last 2 weeks, I was suddenly re-energized and ready to deliver my message. I explained to the people that they had an incredible opportunity in front of them. Everything that Alejandro had asked for is now possible, but it is just an opportunity. Opportunities require execution, and the world is watching. I explained to them that in most cases our investors are people, not institutions and that they have placed their trust in us to deliver on our commitments. My promise to the people was this: If we succeed, you succeed. Getting buy in from a team is critical and I am confident that we have the buy in of every last man and women at Pietrasanta.
Later in the day, we engaged in an incredible day of activities for the children and the employees. We had potato sack races, we played a softball game, and several other local games I don’t think have been named yet. Spirits were high and the moral was even higher, which gives me great excitement for the new year. As the day winded down, we presented 70 children with gifts this year. Soccer balls, toy trucks, dolls, and more. Every child received a gift and all had smiles as they went home that day.
PANAMA GOLDEN PINEAPPLE UPDATE
By Paul Vergara, COO Panama Golden Pineapple LP
Quality Pineapple Comes from Great Seed!
We began the month with a sole focus on developing enough seed for the scheduled surge of the pineapple plantation in January 2018. The first step was to begin cleaning all seedling plots, a slow process that required many hours of manual labor. After cleaning the seed plots, we were able to begin the process of removing seeds and laying them upside down to allow the sun to cure the seed.
By the end of the month, we have prepared around 250,000 seeds, which are more than enough for January’s planting schedule. The Pineapple planting start-up is scheduled for the month of January and, once we get started, the goal will be to plant around 60,000 seeds per week for 52 weeks.
By end of 2018, we will have more than 3 million plants on the ground. Likewise, the process of seed development continues year-round so that we can have enough seed for each month.
EQUIPMENT CALIBRATION: All nutrition throughout the pineapple fields is done via tractor spray boom. Therefore, the tractor spray boom is one of most critical pieces of equipment in the pineapple plantation and making sure that the spray boom is properly calibrated allows us to estimate the exact nutrition that plants are receiving. This is key to maintaining low costs and effective nutrition.
MAINTENANCE: Equipment must be repainted and maintained yearly to ensure proper functioning. Thus, our bedding maker just got a facelift and it is ready for the hard work ahead.
NEW EQUIPMENT: In January, we expect to receive our new preparation tractor that will help us prepare the soil more effectively throughout the year.
SOIL PREPARATION: Our goal in December and January is to prepare as much land as possible for plantation. Because our soils are high in clay content, it is best to prepare them while it is moist and, since the rainy season normally ends in December, we are currently preparing the soil at a rapid pace.
As of this Update, we have already prepared some 10 hectares and another 10 should be ready by the end of January.
Preparation involves using equipment like the Mulcher for incorporating the organic material into the ground and the Disk Harrow as well as the Subsoil Plough in order to loosen up the soil. All of this equipment passes multiple times over the same area until the soils are loose enough for the bed-maker equipment to do its job.
CHRISTMAS IS HERE: We took some time to celebrate and here are some pictures from this year’s Christmas party! All employees received traditional gift bags with many goodies to take back home.
After a short break at end of the year, we are ready to get started and make the best of the New Year!
GP Agro Timber Mill
Earlier this month Operations Manager Oscar Baracaldo together with our Timber Advisor Juan David Gaviria visited Pietrasanta for the year-end report of our forest as well as to finalize the due diligence on the new property where our new sawmill will be located.
As reported by the team, our 14 and 9-year-old forest growth rates have continued as expected and preparations for our thinning’s have been initiated. Simultaneously, our team is implementing a forestry plantation modeling software, which will allow us to locate every tree, to permanently monitor all plots, and to keep a close eye on all forest outputs. Furthermore, we have set our thinning schedule to meet the launch of the new sawmill, allowing us to process the wood ourselves. Sawmill development will start middle of January and we expect to be fully operational by August 2018.
During 2017, we completed a thorough study of the market conditions of processed teak wood to assess the feasibility of constructing a processing mill vs selling raw wood. We have been working with local and foreign wholesalers, whom have confirmed the strong demand of processed teak in both European and American markets. Our research has given us a green light on moving forward with the processing mill. We will be establishing the mill under the GP Agro SAS entity in Colombia, which will give both GP I and GP II investors participation in the new venture.
Our team is finalizing the terms of land lease/purchase in order to begin the construction of the 8000 sq structure in early February. We have also pre-ordered the primary equipment for processing. The sawmill line will be operated by up to 15 employees which will initially give us the capacity to process up to 6.36m3 per hour with an average of 118 logs per shift and a final output of 50.94 m3 which will be comprised of 80% rough blocks and 20% of finish wood. We are projecting the amount of finished wood to increase over the next 3 years. Our forecasts project a significant increase in distributions to GP investors.
The accounting team is finalizing year-end distributions for both GP I and GP II investors this week. Likewise, we have a cattle sale pending on December 30th, which will be included in the year-end distribution. Once we have a final number, we will send out distribution statements. Afterwards, we anticipate distributions to go out during the first 2 weeks of January.
Pietrasanta Year-end Valuations
There has been much speculation surrounding the addition of the sawmill and how it will affect the valuation of GP I and GP II shares. Although we have not finished the valuation report for 2017, we expect significant increases due to the additional revenue that will be generated by the mill. Our team will be preparing the 2017 annual report, which will include the valuation and summary of movements from this year. We anticipate its publication in early March.
by Oscar Baracaldo
AgInvestor’s AGX trading module is ready and has been tested with live transactions. Although we had projected to roll out earlier this year, we decided to incorporate additional safety measures, which include SMS and Identity verification to provide an extra security layer to all parties involved. This release of AgInvestor, which will roll out mid-January 2018, will include the long-awaited AGX module to allow current Farmshare holders to list their units in this marketplace. The trade process is very standard as the seller and buyer go through a 3 step process; Negotiation, Purchase & Transfer. Once a trade has taken place, both parties will have records of their transactions and the funds will be aggregated and allocated accordingly. AgInvestor will allow the receiving party to download an updated Farmshares Title Certificate at any time and from anywhere with great ease.