Fodder King

Producing and suppling the highest quality fodder at the best value

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INDUSTRY

Agribusiness

STATUS

Trading

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Public

Investment Highlights

Company Overview

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Investment Highlights

Using patented technologies

Producing high quality fodder products, which are marketed for supplementary and intensive livestock production

Company Overview

Applying technologies to harvesting and processing lucerne, clover, cereal and other fodder crops, enables Fodder King to produce consistently higher average quality fodder under a wider range of weather conditions than previously possible.

Specialised hay making processes yield much greater productivity of capital and labour, enabling the company to be more competitive in satisfying its customers needs. As a result demand outstrips the Companys ability to supply by a large margin.

Fodder King contracts farmers to supply them with various fodder crops to a specified standard, ready to harvest. It purchases the crops then carries out the harvesting, processing, marketing and product distribution. The grower is paid a guaranteed price with a bonus depending upon yield and market conditions.

Fodder King has met the challenge to overcome the limitation of weather, which normally restricts hay production to a small portion of the day and only under ideal conditions. It has successfully broken this barrier, producing high quality hay consistently throughout the day.

The economies of scale, made possible by the new technologies, will boost the profitability of the Company as production volume grows. In the meantime, its own production is supplemented by a product broking service.

THE PRODUCTS

Fodder King's production consists of legume, cereal and pasture hays in different bale sizes. Further processing yields products such as cubes, super-compressed bales, chaff, meal, mats and pellets. To date Fodder King has contracted other companies to further process its hay to a specification. In the future Fodder King expects to undertake these value adding activities as part of its own production operations.

THE CUSTOMERS
Fodder King's customers participate in all the major livestock industries in Australia. Fodder products are essential for production feeding of beef and dairy cattle, deer, goats and horses. Some of Australia's leading thoroughbred studs are Fodder King customers.

Fodder King has made it easier and less expensive for customers to buy fodder. Only Fodder King customers can be confident of delivery when specifying the type, quality and packaging format of fodder they require.

THE MARKET
Fodder King hay and value added products are marketed and distributed under the Fodder King label to local and export markets. The Company's goal is to become the leading supplier of fodder products in Australia and the country's leading exporter.

The market for fodder products in Australia is valued at more than A$750 million per annum ex-farm. The Australian fodder industry is fragmented, with numerous small producers, traders and distributors. Fodder King has the potential to service a large percentage of the market by utilising its unique competitive advantages, including customer preference for the Company's products relative to its competitors.

Asian countries import in excess of A$1B of forage products per annum. Little of this presently comes from Australia. Fodder King plans to expand into these export markets. Already, regular orders are being received from South East Asia. Trial shipments of lucerne hay have been successfully delivered to the Middle East and Japan. As Fodder King is now receiving regular overseas enquiries, sourcing enough of fodder crops is the principal hurdle to achieving rapid growth in exports.

Demand for Fodder King's products, both domestically and overseas, continues to exceed the Company's current production capacity.

COMPARATIVE ADVANTAGES

Fodder King's methods enjoy a number of sustainable strategic advantages over those of its competitors:

higher average nutrient content hay, gives customers better value;
higher average quality, means higher average prices;
lower costs of production from greater productivity, when at full equipment capacity, without loss of quality;
lower risks for Fodder King, for growers, and for customers;
lower delivery costs with a denser product;
improved profit margins, when at full equipment capacity, which are expected to gradually improve with increasing scale of operations;
brand loyalty because customers get a better deal with consistency, quality, reliability and service.

SUPPLY

Securing sufficient supply of crops to ensure Fodder King's growth, requires successfully introducing change to the established methods of operation currently employed by farmers in Australia.

By working with Fodder King, individual farmers can effectively manage 600 hectares of irrigated fodder crops, whereas using conventional harvesting methods the individual farmer is often restricted to about 60 hectares. This major advance in production capability, presents opportunities for large scale irrigation farmers to become Fodder King growers amd to rotate lucerne with existing products.