Wednesday, February 23, 2011
China Agritech: Getting Wayne Tsou of Carlyle to explain Chinese excellence in nanotechnology production
Obviously these staff are super-strong - as just filling and sewing closed the fertilizer bags and loading the trucks would be problematic. My previous posts have focused on the Herculean efforts of staff just loading trucks - and only at the Anhui plant. The rest of the company of course has to be much bigger than that.
It also appears that the manufacturing is considerably more sophisticated than I thought. For example [China Agritech has] combined innovation and technology in [their] liquid and powder products utilizing nano-honeycomb embedding technology and microelement deep complexing, which makes them more environmentally friendly and effective with a higher content of nutrients than traditional organic fertilizers.
This is pretty sophisticated stuff. Most companies doing nano-production measure their output in something ranging from thimbles to maybe one or two tonnes. A123 has - as I have blogged about earlier - had enormous expenses in scaling their manufacturing.
But China Agritech is special. It does nano-prodution using sophisticated things I do not understand (like nano-honeycomb embedding technology and microelement deep complexing) on the scale of hundreds of thousands of tonnes per annum. And it does it with minimal staff and just over $6 million in plant and equipment.
Whilst I do not understand how they do it fortunately we have a highly qualified guide. His name is Wayne Tsou - and he is the managing director of Carlyle Asia Growth Partners. He is of course entirely suited to the job. He not only has a Juris Doctor from the Harvard Law School - he is a scientist! He has a Master of Science from CalTech and a Bachelor from University of Michigan. Sure he is an electrical engineer by training - but so is my business partner and I don’t hold that against him...
Anyway Wayne Tsou has (at least before the controversy) vouched in the press for China Agritech and their technology. To quote: "we [Carlyle] are encouraged by the Company's current operations and future outlook. Carlyle always has been active in investing globally in technologies and companies focused on sustainable development. We intend to continue to provide resources and assistance to help China Agritech achieve its strategic goals and expand in the Chinese agricultural market."
Fine words - and as Carlyle is a fine firm I presume those words are backed by actions and that Carlyle really is in there helping China Agritech with its technology. And that Wayne Tsou can explain what is meant by nano-honeycomb embedding technology and microelement deep complexing.
I only wish he would.
You see I have approached Mr Wayne Tsou to answer questions about Carlyle’s involvement in China Agritech and what contributions Carlyle made to their technology. Like the other Carlyle participants in this well promoted stock Mr Tsou has been strangely silent.
Nonetheless Carlyle is a reputable firm - and if they say they are dealing with someone who can manufacture nano-products on a vast scale without much in the way of staff or capital equipment it is not for me to disbelieve them. If they think investing in nano-honeycomb embedding technology and microelement deep complexing makes sense - then I presume they did some due diligence.
But I am an ornery mongrel. I remain short.
The content contained in this blog represents the opinions of Mr. Hempton. You should assume Mr. Hempton and his affiliates have positions in the securities discussed in this blog, and such beneficial ownership can create a conflict of interest regarding the objectivity of this blog. Statements in the blog are not guarantees of future performance and are subject to certain risks, uncertainties and other factors. Certain information in this blog concerning economic trends and performance is based on or derived from information provided by third-party sources. Mr. Hempton does not guarantee the accuracy of such information and has not independently verified the accuracy or completeness of such information or the assumptions on which such information is based. Such information may change after it is posted and Mr. Hempton is not obligated to, and may not, update it. The commentary in this blog in no way constitutes a solicitation of business, an offer of a security or a solicitation to purchase a security, or investment advice. In fact, it should not be relied upon in making investment decisions, ever. It is intended solely for the entertainment of the reader, and the author. In particular this blog is not directed for investment purposes at US Persons.