Q&A with Pan American Fertilizer (CNSX: PAF) President and CEO, Mr. Randy Wright
Tell me about Pan American Fertilizer and describe the type of fertilizer that you produce.
Pan American Fertilizer (
CNQ: C.PAF,
Stock Forum) is a Canadian Company dedicated to providing fertilizer for the South American market. Currently, we’re focused on a specific type of fertilizer called Calcium Sulphate (also referred to as “Agricultural Gypsum”). Our process is simple; we extract surface material, crush it and send it through a screening process, which results in two types of fertilizer product. The first is 2x4mm granular Calcium Sulphate and the second is 100 mesh minus powder form Calcium Sulphate. Both can be used as either stand alone fertilizer or within a custom blend (dependant on client specifications and requirements).
What is this fertilizer used for and what is unique about it?
This fertilizer is specifically used to replace the sulfur in the soil, lost through over-farming or just through farming products that are hard on soil. Crops such as soybeans are hard on soil and farmland used for this purpose benefit from our product. Our fertilizer replenishes the soil and it is also a natural (non man-made) product, with no chemical residual effects.
Where do you see the greatest demand? Is there a demand, both local and international, for this product?
We believe that our current market area is where the demand lies; specifically Argentina, Brazil, Paraguay and Bolivia. As the world’s population increases, so too does the requirement for food. The demand for a fertilizer that remediates soil, enabling continuous re-use of the same farmland, will also grow.
Can you explain why have you chosen to base your extraction operations in Argentina?
Argentina provides us with a unique opportunity. The Calcium Sulphate we are extracting there has almost no salt. Other Calcium Sulphate deposits tend to be high in sodium, but this is not true of the Calcium Sulphate we have been processing. This is of key importance, as high levels of sodium can result in soil degradation and may impact plant growth.
What is your flagship project? And what stage is the project at?
Our Flagship project is the Santiago Del Estero project in Argentina. We are currently extracting and selling our high quality product to customers, both locally and internationally.
What do you think you could do with that project over time?
Over time we will increase growing our sales channels, increasing our extraction capacity and expanding distribution into other countries, as well as adding complimentary products to our distribution networks.
Can you tell us about your distribution strategy?
We have entered into an agreement with a local distributor, Mamasu. Mamasu has already established a distribution network for Agricultural products. Accessing their distribution network provides us with an immediate boost in our capability of selling our product on a large scale, both nationally and internationally.
What are the key challenges that you face in your business?
Right now there is a lot of interest in our company and our products, meaning there is an opportunity to grow very large and rapidly. Controlled growth is a challenge as we do not want to grow so fast that we are unable to sustain ourselves, and we also don’t want to send the wrong message by backing away from key opportunities.
Are you actively involved in supporting the local community? Do you have strong community relations?
We are actively involved in supporting the local community; we employ local people and provide training. This, in turn, puts money back into the local economy. We facilitate sponsorship programs for schools in the area, partnering them with schools in Buenos Aires, and we enjoy being involved with local leaders and their initiatives. As our company grows we envisage greater involvement with the local community, and see it is a long-term gain for our operations within the area.
What do you hope to achieve in 2013?
Our focus for 2013 will be to increase the public awareness of our company within North America and Europe, and continue to grow our market share within South America. It is our expectation that we will experience continuous organic growth this year, and our confidence in meeting our expectations is demonstrated in the milestones we have set for 2013.
Why should investors be thinking of investing in Pan American Fertilizer?
Investors should think about our company as we are growth oriented. We have been publicly listed for 8 months and in that time have met all our milestones. We are on track to meet the milestones we have set for this year and plan on sustainable growth by adding, over time, new fertilizer products.
In addition to this, as we continue to mature, and in alignment with our core business model of increasing cash-flow by extracting and selling fertilizer related products, once primary growth milestones are reached, it is the Company’s medium to long-term intended goal, that subject to legal and contractual restrictions, we will be able to declare a dividend to shareholders.
Actual declared dividends are subject to the discretion of the Company’s Board of Directors and may vary from the intentions stated depending on, among other things, the Company’s earnings, financial requirements and other conditions existing at such future time.
Is there anything else you would like to say?
To date we are on track with our projected milestones. We’re pleased to be supplying a high quality product for which there is a real demand, and our clients are happy with the consistency in quality that we are able to supply. As a result of hard work Pan American Fertilizer is positioned to be the largest supplier of Calcium Sulphate within Argentina. Our overall goal is to meet our objectives and we always strive to surpass expectations, wherever possible.
Disclosure: Pan American Fertilizer is a Stockhouse client.