Message From The Chairman of Thermo Tech
It has been some while since I have been able to give attention to this message page. While I clearly stated in the beginning that I would try to update it regularly, I also said I would make no promise to do so on any schedule. Still, I do apologize for not being able to get to this important task sooner.
In the last days we have been able to see attention in the Malaysian press and to put out some official news by way of formal news release. Among other things I would like to expand on some of this for the benefit of our shareholders.
I am personally frustrated at the position in which we find ourselves just now. Management finds itself restricted in what it can reasonably discuss with shareholders through this web site, this message page and even in official news releases. As we get messages and feedback from shareholders, we see the frustration there as well. It has reached the point that even though management has launched a massive and very serious lawsuit on behalf of shareholders, in the British Columbia Supreme Court, we are accused of being in collaboration with the very people we are suing. Despite the money already spent and that committed to take the lawsuit forward, we hear that the lawsuit is not real. Where does this come from? Who spreads such untrue rumors?
We have already won small but important battles in the court. We are very serious and we do not underestimate those on the other side of the case. In fact it is this respect for their intelligence and their zeal to defeat our case that causes us to pause with much of what we would like to share with our supporters. I must state that I make NO accusation when I say that we intentionally guard what we say to prevent the defendants in the lawsuit from gaining benefit or some kind of comfort. I make NO accusation when I say we do not want to divulge our business plans other than in broad terms, lest we find interference with those activities that are needed to see our plans to completion. I simply say that your management has determined that it is prudent and in the interest of shareholders that we keep close, all information that does not have to be disclosed as material.
There are many things proceeding along that I would very much like to reveal concerning both the conduct of the lawsuit, which if we are successful, will free the Company to move forward very rapidly and concerning our business in Malaysia. I would very much like to talk in greater detail about our progress and our plans in Malaysia, but I would rather take criticism for not communicating well enough and deliver the business at the end of the day, than to satisfy demands for ongoing information and finish up with no actual business.
I think that some of the information shareholders want, would not be an issue under other circumstances. It would just be day to day business. Nobody would want to look at it with a magnifying glass. Never mind, I do understand why we are in this situation and why people do want this level of information.
Nobody would prosecute a lawsuit or negotiate business in public, yet some of the requests we get for information, were we to disseminate it, would amount to nothing less. Still, we understand. We understand the needs of shareholders and we understand the frustration. We understand it better than most people would imagine. We must deal daily with our own frustration as we sit with one of the world's best and most needed technologies, but find ourselves concentrating on fighting a lawsuit just so we can freely deliver and use it. Management holds shares in this Company, as do those who are not able to be party to the day to day work. We are all shareholders. We in management are both blessed and cursed in this regard. We are blessed that we, at least have some control and knowledge of what is happening. We are cursed in that we are as unable as any other shareholder to realize the growth in our business and share value that we all want.
I said I would expand on recent news. I hope that this will help with communication and the frustration.
Some were obviously pleased with our announcement regarding leasing of the Hamilton plant, but others weren't. Quite rightly, they were disappointed that the facility will not operate as a Thermo Master™ Mark III plant. We understand, but it was a business decision based on present circumstances. It has created an income from a facility that was frankly costing shareholder's money, just by sitting there. The fact that it was in this condition is addressed in our lawsuit. We stated that we wanted to concentrate on business in Malaysia, more or less from the beginning and would rely on a service provider for our North American operations. It seems that reliance was ill-founded and we were eventually obliged to take back the facility with a myriad of problems including many unpaid bills which we maintain were covered by contract. The lease agreement announced in our July 29, 2002 news release is a positive development for North American operations.
As far as the lawsuit is concerned, we are bound by the pace of the Court process and the rights of the parties to those processes. Nonetheless we have won two skirmishes in this war, when the Court denied petitions a) for a receiver and b) to disqualify our legal counsel as being in conflict. These things may seem small, but they are not. Other matters are proceeding and I hope we can announce them soon. There have been rumors around that there is a settlement between the parties. This is absolutely not the case. Perhaps it is my fault for indicating in an earlier message that the other side had it in its power to bring the lawsuit to an early conclusion. The door was and is open to meaningful dialogue, but there is no settlement under consideration.
In Malaysia, we are working steadily toward a solid business venture and meeting with good response. We were favored with attention in the English language press recently, perhaps because they have been hearing of our activities and progress. In any case, we have seen favorable news about our efforts and this can only be positive.
We have completed a very thorough market research, which gives us confidence about where our end products will fit in the Malaysian animal feed market. We have been able to meet with the feed integrators and give them a clear picture of what our product would mean in their business mix. We were pleased to learn that our own assumptions about market placement were quite accurate, even if they were somewhat conservative. On the basis that we can deliver the product we profiled to the industry, the study has slotted our market price range slightly above corn, which is the main ingredient in Malaysian animal feeds. It is also 100% imported.
We have contracted with a local engineering firm to assist us in getting the Mark III-P design ready on the ground in Malaysia. We have been working closely with one of the principles, Mr. Noel Wambeck, an expert widely recognized in the palm oil industry, not just in Malaysia but around the world.
We have spoken before of the match between a Mark III-P plant and a single oil mill. Unlike other markets where we must assemble sufficient waste to meet the plant capacity, the oil mill, just one mill, sited next door to our plant can provide full capacity raw materials on a year round basis.
What we can do in Malaysia, we can do in Indonesia and between these two countries they account for the vast majority of the world's palm oil production. Perhaps we were a little naïve or over enthusiastic about how fast we could develop this market. Maybe we underestimated the strain and the drain of our legal issues and the disappointment, the time and financial cost of having to take back responsibility for North American operations that we believed we had effectively dealt with over a year ago. Even still, we have continued to press forward through the swamp we seem to be in. We have continued with our efforts to build business connections and our base for a sound and long lasting presence here.
Frustration? Yes there is frustration, but it is not solely with the shareholders. The accusations of a small but vocal group of people, some of whom may not even be shareholders, is draining on our people. Our management, staff and consultants come every day to do their best to give everything they have to making a success and every day we hear the complaints and accusations. It is draining and disheartening to good people who do not have to do this. Even still, I do understand and I do have sympathy for the feelings of shareholders.
I said before that I would try to communicate effectively. Clearly, I have not been successful for a lot of reasons. Some of them are my fault. Let it be so. Some of them are in the imagination of others. I accept that and tell you that I understand how such a thing can happen. We are looking for ways to satisfy the thirst of shareholders for information. We are going to weigh very carefully, our instinct to hold back in case we may give away strategic information. We will consider the risks more carefully and try to put out more updates and provide more detail when we do discuss pertinent matters. Even as I state this, I know it will not satisfy everyone. I know and hope that most shareholders understand that there are those that do not want good news and sound information. They want nothing good for our Company. Their agenda is not the same as our regular shareholders although they may try to have us believe it is. There is not much any of us can do about that. I am thinking to take the position that such people will find a way to do harm no matter what we do. If we do not give them things to attack, they will create them for themselves. So, what does it matter if we give them small opportunities? I will not give them major things. That would be wrong. In the end, with our present policy of only putting out sound and solid information and only when appropriate, time is our friend. We will show that we are true and sincere in what we are trying to do. I have no idea how long that will take or what the amount of success must be before most people are satisfied. That really makes no difference to our policy. We will just continue on, convinced that it is the right way to build and sell our business.
I ask, and the Board and Management asks, for the continued patience of our shareholders as we undertake to do what we can to justify that patience and faith.
Ismail Radi
Chairman
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