Coffee, as f have pointed out you on several previous oceasion2, a very uncertain crop, the success or failure of which is el pendent upon whether favourable weather experienced the time the blossom is setting the period when the berries are ripening. Insect pests, such as the borer, can also do incalculable harm to the crop, event when the weather conditions have been favourable.
In our present financial condition we are in no position to survive 1 sequence of bad years and aa alternation of good and bad years would simply mean that we should continue to get in and out of debt and the prospect of being able to declare a dividend would be extremely remote.
Tt is too early yet to give you any estimate of what the 1929 crop likely to amount to, but, up to the present time, weather conditions have not been unfavourable.
Should the option ultimately be exercised, the company will receive at least approximately Tls. 267,000, which will enable us to pay off all our indebtedness and have in hand a sum of something over Tls. 100,000 for working capital.
This will put us in a financial vouibon swag enough to mae any emergency that may arise and sill also render available for distribution any profits that may be earned.
For these reasons, and also because the price suggested is a very generous one, your directors recommend you to grant the option asked for.
The Reason for Purchase Before I sit down it may interest you to know the reason why these People are prepared to suggest a Price that on the face of it looks a very satisfactory one to pay for Panawangan in its present state of development.
fe have at the highest point our estate an area of approxi 200 acres that are cleared of jungle growth but not planted. Owing to the elevation, this arca is eminently suitable for tea and it is aurrounded by between 3,500 and 7,000 acres of similar land that is at present utilized for various cultures by natives.
The jea of the prospective buyers is to erect a tea factory on these 200 acres and to distribute tea seedlings to the natives which thes in turn will plant on their own land.
In course of time the green leaves will be harvested and sold to the factory at a price of from four to eight cents per pound (wet), the price usually depending upon competition for the green leaf arising from other estates that may happen to be in the neighbourhood, case of Panawany chance of competition, as the estate completely isolated, Assuming that only 38,500 acres of native land are planted with tea, the potential crop will be in the neighbourhood of two million pounds, the profit on the sale of which will have the effect of turning it into an extremely valuable property.
You may say that, if this is the case, why not do the work ourselves, but 1 must point out that, to reach this desirable end, it will be necessary to spend at least another: Guilders 260,000 on a tea factory, the planting up of the part of the 200 ares not occupied by the factory. and on nurseries for supplying tea plants to the natives, and our present financial position precludes us surring any such further expenditure, That concludes my remarks, gentlemen, and I thank you for having listened to me so patiently. T also hope that 1 have made the to you and that you ith your directors that Feasons a sale of Panawangan Estate is desirable.
The Resolution There were no questions, and the following resolution was passed unanimous That, in the opinion of this meeting, itis desirable to grant an option for six weeks from date to certain responsible parties in Java to purchase the whole area of Panawangan Estate at a minimum. price of Guilders 427,500 net to the company.
Text read from the printed page and cleaned; old type leaves the occasional error.