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Sukari Tamu.
MaichBlack
#41 Posted : Wednesday, November 25, 2009 1:43:00 PM
Rank: Elder


Joined: 7/22/2009
Posts: 7,459
@ Njung'e - From your posts,I can tell not only are you a sukari investor but a keen (maybe more than your average investor) follower of the goings on at sukari. Now,in your opinion (disclaimers not withstanding),what would be the best time to board the Sukari bus? At what price range?

Any other SKerian with some solid info is also free to reply. I want to be in the bus with the likes of Wendz,Guka,Mukiha etal. No problem even if I'll be at the back of the bus. LOL.
Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
Njunge
#42 Posted : Wednesday, November 25, 2009 2:20:00 PM
Rank: Elder


Joined: 2/7/2007
Posts: 11,935
Location: Nairobi
@Maich,
Best price range?....5 cents to 10 cents....lol.That won't happen but as Mukiha says,maybe it's time to take position ( Disclaimer X 2 applies )

Old man about town....
Nothing great was ever achieved without enthusiasm.
mwanahisa
#43 Posted : Wednesday, November 25, 2009 2:38:00 PM
Rank: Elder


Joined: 6/2/2008
Posts: 1,438
@Njunge. MSC H1 2009 (July-Dec 2008) EPS was a mere 11 cents. The full EPS for the FY ended June 2009 after discounting the tax credit according to my calculations came to 59 cents hence EPS for H2 2009 works out to 48 cents. Assuming that MSC is able to maintain the same level of profitability for H1 2010 as that of H2 2009 then profits go up by a factor of 48/11 hence my 400%. The computation actually results in an increase of 336% - but a brother should be allowed some level of overexuberance!

I actually expect more robust performance given:

i) the cogeneration;

ii) greater sugar production as a result of of the better weather (assuming El Nino is not wreaking havoc in Western - I stand to be corrected here); and

iii) better sugar prices at the retail end in H1 2010 relative to H1 in the 2009 Financial Year.

@Mukiha,Yes. In my view investors should seriously consider taking positions in MSC at these prices in view of the proposed projects going forward.

My big worry is that COMESA safeguards are coming off pretty soon and I wonder whether MSC will be completely ready for them. All the same I believe the fear regarding the COMESA sugar coming into the market is in the price. Hence,there is a still lot of room for the share price to run up. BTW other sugar counters listed on the Johannesburg Stock Exchange i.e. ILLOVO and TONGAAT HULLET trade at PE Multiples above 12. Now that SCOM has 'behaved' perhaps some BRAVE foreigners might just try to get into another counter with the kind of liquidity (in terms of shares) that Mumias has.



Opportunity calls but few respond.
VituVingiSana
#44 Posted : Wednesday, November 25, 2009 10:22:00 PM
Rank: Chief


Joined: 1/3/2007
Posts: 18,117
Location: Nairobi
@Njunge - LOL... Like I said this can fill a book... One more shot at this...

Think of it as a road... Thika Rd with multiple 'turn off' or exit points for cars.You start from Thika... no entrances leading to the road... only exits... (Mumias is a net supplier. Along the way are net users)

If 1,000 cars start off in Thika & filter out along the way to Ruiru,Kasarani,Wundayi (representing towns like Eldoret,Kisumu,Nakuru) but by the time the remainder reach Muthaiga Roundabout there are only 200 cars... no traffic jam... things are a-OK.

If there a few (100 cars) leave the road between Thika & Muthaiga then there will be 900 cars backed up at the roundabout if all these cars are headed to Westlands (Nairobi being the ultimate destination for power) via Forest Rd. The backup is coz the 'size' of the road narrows as well as 'hurdles' like the roundabout (technical concerns).

The cars represent the 'electricity/electrons',the road the transmission cables,the exits the users in the towns,the roundabouts the hurdles,transformers,loss factors,etc

There is a 27km single circuit transmission cable from Mumias-Musaga (132 kV transmission line). This line was upgraded during 2009 but there needs to be further strengthening/upgrading along the way to other towns after Musaga.

Please remember the big kahuna is & remains Nairobi (50%+ of all electricity consumption) with MOST of the 24hour large users e.g. BAT,EABL,etc.
Mt.Kenya (aka Central) has a higher consumption per km square vs Western region. Includes Thika with Bidco.

Sugar mills do NOT use much/need much 'on-grid' electricity. They burn bagasse for steam production which is a 'waste' product . Mumias burns the 'excess' to produce extra steam to run tubines to produce (& sell) electricity to KPLC. Mumias has been off-grid for many,many,many years. All their employees get 'free' electricity.

Pan-paper as you point out is history. Part of Panpaper's 'heat/steam' needs came from burning waste (wood/cellulose). Industries need 'steam' not electricity as such... There will be a need for some electricity but 'steam' production is the largest use for paper/sugar production.

Peak demand in 'West Region' is 217 MW. That is PEAK. Mumias problem is supply not taken up during the night (off-peak). West region covers a huge area. It includes areas all the way south of Mumias like Kisii,etc... as well as north towards Elgon,Turkana...

Anyway... there are hardly any large scale INDUSTRIAL users (except sugar firms but see above) in the West region that run 24 hours... and no need to run 24 hours in this economy...

Hydro turbines are much harder to start up & shut down (than steam) so KPLC has to take their power. Turbines at dams (kiambere,kindaruma) are behemoths. If they allow you to see these (security is tighter nowadays) you will be in awe. HUGE... and noisy!!! But a nice rhythmic feel to them. They start up slowly,pick up speed & stopping them takes a while... so you can't switch them on/off like a light switch...

Diesel plants are easier (than steam) to cycle up or down...

All said & done... I hope KPLC can find ways of using Mumias electricity before using IPPs. The best way remains increasing off-peak usage in Western Kenya. KPLC needs a new pricing scheme for that area! Mumias has the capacity to produce another 25MW from bagasse.

Greedy when others are fearful,Very fearful when others are greedy - to paraphrase WB
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
Njunge
#45 Posted : Thursday, November 26, 2009 5:07:00 AM
Rank: Elder


Joined: 2/7/2007
Posts: 11,935
Location: Nairobi
@VVS,
I am wiser now........can i pay some fee??......lesson fee??...lol.

@Mwanahisa,
You summed it up in a simple nice way and you have your facts very right.In a long time MSC are way ahead of target in sugar production and sales.Something unseen since 2005......I am predicting 200% to 300%.

Old man about town....
Nothing great was ever achieved without enthusiasm.
VituVingiSana
#46 Posted : Thursday, November 26, 2009 5:52:00 AM
Rank: Chief


Joined: 1/3/2007
Posts: 18,117
Location: Nairobi
@njunge - Some firms enter into an agreement which entails being paid a 'minimum' whether the goods/services are supplied or not to cover fixed costs.

IPPs providing thermal energy as an 'emergency' provider often do so since they still have to pay for the equipment. The variable is generally fuel. The disadvantage to KPLC is that they have to pay even if they never 'use' or buy the power.

Best solution for Mumias is to encourage local consumption. In 3 years,we will start getting power from Bujangali as well. It will benefit Mumias since KPLC is building new transmission lines on the Kenya side to the border. These will interconnect to Mumias.

Greedy when others are fearful,Very fearful when others are greedy - to paraphrase WB
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
VituVingiSana
#47 Posted : Wednesday, December 02, 2009 12:48:08 AM
Rank: Chief


Joined: 1/3/2007
Posts: 18,117
Location: Nairobi
@njunge -

http://www.businessdailyafrica....8/-/t6g1g0z/-/index.html

KPLC responds to Mumia's claims
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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