Thread: Rubber trees 101

Province of Udon. 80 kms from Udon city, and 85 kms from Nong Khai town.
Awoke this morning to clear blue skies. Forgot what a blue sky looked like.
June we tapped when we could, morning, afternoon, evening, middle of the night, still only 25% output from previous June's.
Problem also these days, the best plantation, with the biggest, tallest trees, takes forever to dry out, especially if there is never any daytime sunshine.

These people are unbelievable at times, 2 guys rock up about renting the sheds at the factory, to buy and store rice.
Bell has been talking with them for over an hour, I keep out of these things, does my head in with all the non questions and non answers.

Anyway I finally go out to see what the deal is, no deal of course, yet, so I ask 2 simple questions, how long do you want to rent the sheds for, rice harvest is only about 2 months and how much rent will you offer.
Blank look,. think I had asked a question on particle physics.

Another hour of talks and the guys head off to inspect the factory, but more of the story comes out, now it's not just rice, but timber and cassava and they will need to install a big drive on/off truck scale.
They had tried to rent a cassava place down the road, already, had the truck scale, sheds etc but turns out the place wasn't legal and the government closed it down.

Ergo why they came to see us, but they don't seem to have any idea as to what they want legally, said I'm happy to rent the place monthly, cash in hand, but if you are not legal and the government comes, you are out, minus all the money you spent for setting up.
If a legal lease, say 3 years, registered with the land office etc then I have to pay the taxes on that income, which means you have to pay the rent set by the land office for the tax department, which will not be cheap, plus you will be paying your own company taxes.

That's the third set of wannabe business men this year, all have big plans, but no money, must think farangs are stupid and don't understand anything.

But if they generally deal with Thais, they can find an easy stooge. A tale of good money can open the door and fear can stop them being moved on. Rules and regulations, what are they.

Originally Posted by OhOh

But if they generally deal with Thais, they can find an easy stooge. A tale of good money can open the door and fear can stop them being moved on. rules and regulations, what are they.

There is a problem out my way, rules, tax, permits never existed when it was all dirt and goat tracks..

Times have changed, just because you can still buy/sell pick up truck loads of rubber, cassava etc with out getting licenses, paying taxes, doesn't mean you can open a factory and no one will notice.
First people to take note are the legal dealers, it goes up the chain from there.

I have EPA, health and safety, factories certification and land zoned for industrial use, this all costs to set up.
Thais think I am stupid enough to rent them the place at the same cost as farmland, or they go and build on some farmland, thinking no one cares, but the tax collectors care.

Farangs get caught in this no one cares attitude, that's why many get burnt, big difference between using a pick up to transport goods and using a 20 ton truck.

Anyway the prospective renters have not returned, same as the sugar processing factory guy from 3 months ago.

What was in your business plan that covered this possibility of reduced demand/lower prices?

Originally Posted by OhOh

What was in your business plan that covered this possibility of reduced demand/lower prices?

Never really had a plan to cover the 2009 GFC, didn't see that coming, but we we fortunate in the fact, even though the factory is non profitable now.
This is an economic development area and we get special treatment through the SME department, meaning we can keep legal at a fraction of the cost you need to pay elsewhere.

100 rai of rubber trees keep us above water, so plan for the factory is sit it out, hope the world economy picks up, or a real buyer or investor comes along.

10 rai of industrial land with all the permits, on a main road, just needs the right business to come along, plus the money to invest.

If things in the rubber world pick up, then no problem opening up the factory again and trading our way out, but I am loathed to borrow from the bank to start up, as the markets are too unstable.

Up to Buddha, at the moment.

Another factory buyer phoned today, but this is a real buyer, they already own 2 large rubber processing factories.
He was more interested in the licenses and permits than the factory itself, they are coming out next week and want to see the company papers etc.

^Thai?

Originally Posted by OhOh

^Thai?

Thais up front, but who knows, could be anyone pulling the strings.

I visited their new factory near Chong Mek, last year, no Ma and Pa operation.

If they are interested, it goes over to our accountant to do the necessary due diligence etc.

Up to Buddha.

they do that not you, they are paying not you, and due diligence for what a large shed in a field, please get real?

Originally Posted by mykthemin

they do that not you, they are paying not you, and due diligence for what a large shed in a field, please get real?

You would be an employee for someone else.
So tell us where you live, could be interested in buying, say a supermarket that covers 40 KM radius and no one can come to compete.

Due diligence is both parties agreeing to a fair price or a share agreement, selling a company not a house.

Enjoy your weekend off from the 9 to 5, come Monday, I'll get out of bed when I feel like it.

You are not as bright as you think, I have lived here retired with correct financial planning and proper long term visa not doing border runs every 90 days because I am not potless. you have no idea what due diligence is? it is nothing to do with price it is to do with checking legalities and outstanding liabilities and the seller only needs to ensure that the buyer can pay, were you a failed traffic warden with the iq you have?

Originally Posted by mykthemin

You are not as bright as you think, I have lived here retired with correct financial planning and proper long term visa not doing border runs every 90 days because I am not potless. you have no idea what due diligence is? it is nothing to do with price it is to do with checking legalities and outstanding liabilities and the seller only needs to ensure that the buyer can pay, were you a failed traffic warden with the iq you have?

... yawn...

You actually got any rubber trees? If not, why are you posting on here?

yes have over 100 rai and am about to cut 50% down and plant more sugar cane and yawn to you!

and it is purely a hobby I do not see any of the money, it is pocket money for my wife and the land for my son in the future.

Originally Posted by mykthemin

they do that not you, they are paying not you, and due diligence for what a large shed in a field, please get real?

100% correct.

Originally Posted by mykthemin

you have no idea what due diligence is?

in this day and age you can still be broadsided after you have recieved the cash

Originally Posted by mykthemin

and it is purely a hobby I do not see any of the money, it is pocket money for my wife and the land for my son in the future.

That's a lot of pocket money...
Does she get a monthly allowance as well?

yes of course. I have plenty and planned my life here properly, not hoping it works like most with absolutely no idea.

Originally Posted by mykthemin

yes of course. I have plenty and planned my life here properly, not hoping it works like most with absolutely no idea.

Sounds like you are one hell of a planner ,your good lady must really love you for it

yes and my son he will be very wealthy one day.

Originally Posted by mykthemin

yes and my son he will be very wealthy one day.

Yeah like your good lady I'm sure they will be appreciative on how you have set them up for life with your diligence

Originally Posted by mykthemin

yes of course. I have plenty and planned my life here properly, not hoping it works like most with absolutely no idea.

wow,nothing like a bit of self praise, eh? You are appearing to clever to be busying yourself with some rubber farmers. Or.......????

Originally Posted by mykthemin

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yes have over 100 rai and am about to cut 50% down and plant more sugar cane and yawn to you!

Really, never heard of anyone cutting good rubber to do sugar.

Originally Posted by mykthemin

and it is purely a hobby I do not see any of the money, it is pocket money for my wife and the land for my son in the future.

Today's exchange rates you give your wife around 20,000 pounds pocket moeny.

Originally Posted by thaiguzzi

That's a lot of pocket money...
Does she get a monthly allowance as well?

Originally Posted by mykthemin

yes of course. I have plenty and planned my life here properly, not hoping it works like most with absolutely no idea.

She needs more then 20 grand pounds a year and you make up the difference.

Originally Posted by mykthemin

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yes and my son he will be very wealthy one day.

If your so well off now, there's no one day, he's already rich.

I and others would be interested in the cost/profit benefits of going over to sugar, plus how much you are getting for the rubber lumber.