Given the high crop prices, can kenaf compete?
A. Yes, but… While we like to include local farmers in our business model, there is a limit on how much we can pay for kenaf and still have an effective raw material cost. All of our financial modeling is based upon being able to produce kenaf pulp at a price that is competitive with wood pulp. The good news is that as oil and crop prices have risen, so has the price of wood pulp. Further to that is the fact that we can grow the crop ourselves and produce kenaf at a very competitive price to wood. We are currently developing the ability to lease farmland and equipment to produce our own raw material. This model will assure that we have raw material at an economically competitive price, and in a form that meets our processing requirements. In the future, we want to include farmers in our business value chain. Given the current concerns about corn as a bio-fuel, the effect on other food prices, and the cost of oil, it is hard to project exactly what prices will be like in the coming ye
