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Kevin Quon

 
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  • Solazyme Gains A Partner For Specialty Soap Production [View article]
    I rather not. Despite your opinion on the matter, I find it best to just leave the marketing to them - for better or worst. Last I checked, its working quite well when it comes to Algenist.
    Aug 29 12:55 PM | 2 Likes Like |Link to Comment
  • What A Successful Moema Launch Means For Solazyme [View article]
    "Here's the kind of in-depth look I was hoping for."

    You should probably look there then.
    Aug 27 10:27 PM | 3 Likes Like |Link to Comment
  • Solazyme Gains A Partner For Specialty Soap Production [View article]
    Rwratti,

    We compete with palm oil for a good number of markets, but not all markets - although it is true that most oilseed markets will be correlated to palm oil markets. As the highest yielding oilseed crop and producer of some of the most mid-chain oils, palm oil is very useful & inexpensive.

    What you should keep in mind, however, is that we're not trying to replace palm oil directly. Refer back to my article (http://seekingalpha.co...) for this comment by Rakitsky:

    "A lot of people ask me: 'Can you make a palm oil? Can you make a soy oil? Can you make a palm kernel oil?" And the answer is 'Yes, we can do all that'. But why would we? (To do so would be missing) our unique differential value in terms of creating compositions that have enhanced performance......"


    The point is that we're making oils that can replace higher value derivatives from that oil or other oils. Does a customer only want the 8% c8-c10 coming out of pko? We have an oil that can provide more than 60% of that. Think they'll pay more? A similar story goes w/ lauric oils.

    How about performance? Does the customer want the highest oleic oil out there without having to use antioxidants? We have an oil that outperforms almost everything out there even before considering the use of antioxidant packages. Think they'll pay more?

    A similar story goes w/ solid fat curve opportunities. JW previously asked me "how many oils can you name where theres a large enough supply of those oils, where they're produced efficiently enough in agriculture that they cost less than... you know... lets say $4000 - $5000/ton?" The idea being that there were probably less than a dozen out there (palm, pko, soy, rape/canola, tallow/lard, sunflower, etc...). Each of these have different solid fat curves useful for products, but the its the oils outside of this list that might have the certain curves ideal for many products. Because the oils we make relatively fall under the same price range you're talking about a huge opportunity in the structural fats market alone by being able to increase those opportunities with an affordable & customizable oil profile.

    So in short, are you missing something? No, those articles are both true. But you got to remember that palm oil isn't the oil or component we're necessarily replacing/supplementing. Personal care companies might be using palm oil to make soaps, but what they might really want is a particular fraction of that oil. Even before considering the savings from improved logistics, this is where a part of the enhanced value for SZYM's oils come into play.

    -Kevin
    Aug 22 01:24 PM | 10 Likes Like |Link to Comment
  • Solazyme Gains A Partner For Specialty Soap Production [View article]
    Sorry, it appears I overlooked that. It was supposed to be this article (for those who haven't been following along) :

    http://seekingalpha.co...
    Aug 20 10:57 PM | Likes Like |Link to Comment
  • Solazyme Gains A Partner For Specialty Soap Production [View article]
    Mykie,

    The very limited sales from Clinton are starting to appear on the financials. Look under product revenues & backout the stated revenue from Solazyme Consumer Products (aka Algenist). Last quarter this was about $3 million out of Clinton. In Q1 this was about $2.4 million out of Clinton.

    Three things to remember:
    1) its very early and the ramp hasn't accelerated yet (middle of s-curve).
    2) there is a timing delay between production and sales, some product being sold this q is still coming from last year.
    3) moema sales won't be accounted for on the financials until 2015 after the consolidation. until then, the loss from moema will be presented on the financials as part of the accounting for the JV.

    As to your first Q, sorry I do not know and every relationship is different. Without details from szym, we just wont know.

    Best,
    Kevin
    Aug 20 10:55 PM | 2 Likes Like |Link to Comment
  • Solazyme Gains A Partner For Specialty Soap Production [View article]
    Reference to RSPO's concept of sustainable palm oil: http://bit.ly/1liyUSX

    It's hard to consider this an alternative to SZYM's product... rather its a whitewashed term hoping to prevent future forest destruction with existing palm plantations. The fact remains that alternatives to palm are needed for growing demand. This is why Ecover had its internal debate & still decided to go with SZYM thereby freeing itself from the palm dilemma. Sadly, there really aren't too many options out there given the oil's structure & cost profile... but this is good for SZYM's algal oil at least.
    Aug 20 10:47 PM | 2 Likes Like |Link to Comment
  • Solazyme Gains A Partner For Specialty Soap Production [View article]
    I believe there was previous talk about soaps/personal care products that continue to work after their application. So imagine something like a lotion that continues to work longer (ie. keep hands softer)... or soap/shampoo, etc. That'd be my best guess. Drug delivery might be taking it a bit far considering the external application nature of the products.
    Aug 20 10:41 PM | 2 Likes Like |Link to Comment
  • Solazyme Gains A Partner For Specialty Soap Production [View article]
    Hi Bill,

    Unless the oils sold here qualify under their industrials/chemicals/... segment, I'm merely referencing the skin & personal care segment targets that they've stated several times over. These were last stated to be >60% gross margins on average. Perhaps some of the average margin can be made up from another product in the same segment, I don't know.

    At the same time, who's to say how SZYM or Stephenson PC will sell these products. On their packaging link they have options for going as for down as 10 kg kegs for liquid options. Given the more specialized nature, maybe SPC plans on marketing at a higher margin in smaller quantities than bulk wholesale. Just a thought. In any regard, we don't know and I'm just going off of the best information I have available. Willing to be corrected if anyone has more solid proof that leads elsewhere.

    Best,
    Kevin
    Aug 20 10:28 PM | 4 Likes Like |Link to Comment
  • Highlights From Solazyme's Q2 2014 Conference Call [View article]
    futuretrade,

    I agree with what sddd said. Also, the use of seawater is a very strong pursuit by many companies in this industry. But for SZYM, I highly doubt it's a priority. SZYM's all about tailoring and controlling product design - the last thing it'll probably want to do is to introduce more technology risk over the coming years. That would be like having a pharma company switch to seawater over pure water filtered water (why introduce unpredictable contaminants into the mix unless its for a really basic commodity tat's accepted with a flexible quality range [maybe biofuels?]). The point being, that right now its best for szym to focus on quality of product and reliability of production rather than on lowering cost.

    But that's not to say its impossible many years down the road. After all, SZYM continues to do strain improvement and it is always trying to improve upon its algae strains. I know they've done research on increasing productivity amidst higher salinity - but this might have more to do w/ the environments of cellulosic sugars.

    -Kevin
    Aug 17 12:12 AM | 1 Like Like |Link to Comment
  • Highlights From Solazyme's Q2 2014 Conference Call [View article]
    Proterro is coming along. I wish them the best, but I think it would be presumptuous to think they'll have any impact on SZYM in the near future. I personally can't imagine anything of relevance for the next 5 years even. Although I believe they might start getting deals to create larger plants within 2-4 years. Just my two cents on the issue.
    Aug 17 12:02 AM | 1 Like Like |Link to Comment
  • Highlights From Solazyme's Q2 2014 Conference Call [View article]
    Mikestesla,

    While the initial sales were really just a taste for investors to know that the company is meeting its early expectations, it might be dangerous to hold onto the figure at this point in time. It's also likely the reason why the company isn't willing to update them regularly. ASP's are somewhat irrelevant at this point in time when the company is spending more time sampling product around to prospective customers. ASPs are only really useful when compared to costs too, which are also yet to be established (although they can be relatively predicted based on current data). For that matter, the company has been satisfied in reestablishing the statement that "target margins continue to be inline with prior expectations" again & again & again. Margins are the key after all. Part of the reason is that Solazyme is currently offering upside gains for long-term commitments and long-term partners. You see that in several of their larger agreements. This is especially the case any time you see the idea of setting prices around the cost of production. Even this latest Akzo agreement had that term in there.

    The problem with investors is that we're so focused on profits - (sell product at its highest potential price, make it at its lowest cost, and sell more of it!) But the dynamic of a well-thought out enterprise is about securing a long-term foundation upon which to then expand out. Solazyme is doing that right now. It's why they emphasize that right now its about execution and how they have to show their reliability.

    However, to add to futuretrade's point, its important to understand that Solazyme is in a unique situation from most manufacturing businesses. Their margins will improve over time. To borrow a quote from Painter in my prior visit:

    " If you look at some of these industries where you have a high volume product that coming to the marketplace. What will usually happen is that with more and more volume you'll see your average selling prices coming down. We have this interesting ability with the platform and the ability to tailor the oils in that our expectation is that you will have higher valued oils coming in. So you'll have your average selling price continuing to go up over time. But at the same time, as we continue to gain efficiencies and we start to move into second generation feedstocks as well, those all impact your costs and start to move in an opposite direction. So over time we'll actually see our margins improve." -Tyler Painter (http://bit.ly/NLwWu8)

    The key takeaway about all of this is to understand that ASP's don't really matter. It's all about margins & volume. Solazyme remains confident about their prior stated target margins, and that's good news for investors now. Regardless, they're also believe that their margins will actually improve over time rather than deteriorate. If you're investing for the long-term, that's the key point to appreciate.

    If you're looking for what product is actually selling for, you'll have better luck in understanding the target markets Solazyme is pursuing. Look at the cost of high oleic oils, C8-C10 acids, metalworking fluids, drilling lubricants, food products, cocoa butter, and etc. They're all over the map. Cocoa butter is selling for over $8k/MT for instance. I've found drilling lubes going for $2000-$3000k/MT. Etc.

    As a whole, things are mostly attached to crude oil. But crops are also attached to crude. Again, it comes down to margins - the gap between sugars (dextrose/cane) vs. oil-based products.

    It's too simplistic to think that Solazyme should trade right alongside the price of crude oil. It may be that the market will one day react that way... but it isn't now.

    Best,
    Kevin
    Aug 11 10:55 PM | 4 Likes Like |Link to Comment
  • Highlights From Solazyme's Q2 2014 Conference Call [View article]
    P.S. That video was from IFT 2014. It's an industry conference placed on by one of the most reputable trade groups for food. SZYM won their award there for HSHO. Again, its not for frequent visitors to the grocery store like you and me but rather for large corporate players and their representatives.
    Aug 7 12:16 AM | Likes Like |Link to Comment
  • Highlights From Solazyme's Q2 2014 Conference Call [View article]
    They're just beginning to sell to large scale commercial manufacturers, not to people like you & me. Those manufacturers will eventually incorporate the ingredients into products that you & I already eat.

    Barring an announcement, I doubt we'll even know when the product hits the shelves or know what it's in (unless you pay attention to labels).

    If you're looking for the protein, Twin Labs' Clean Series - Veggie has our protein in it, along with several other proteins. There are a few other brands as well.

    One more point. Recall that SZYM only has Peoria making the algal flours. The plant only has 1800 MT (of oils) of capacity at its disposal. That's very small. It's still very early in the game - now is the time for large companies to product sample in order to create new product formulations.

    To me, the more promising application in the short-term would be the production of the HSHO out of Clinton for use in the food markets. The fact that the award-winning oil has now been brought under the AlgaVia umbrella suggests that it'll be among the first AlgaVia products that should hit the food market. (right now I believe HSHO is primarily used for metalworking lubricants).
    Aug 7 12:13 AM | 3 Likes Like |Link to Comment
  • Highlights From Solazyme's Q2 2014 Conference Call [View article]
    It's primarily interest expense due to new notes offering plus some one-time conversion expenses. Check out the 10-q.
    Aug 5 06:37 PM | 2 Likes Like |Link to Comment
  • Highlights From Solazyme's Q2 2014 Conference Call [View article]
    Snake,

    9 million product revenue; 6 million was algenist. Assuming 2k/MT- 2.5k/MT asp, i'd guess that 1200-1500 MT was sold from Clinton. But recall that product isn't immediately sold once made (otherwise some costs wouldn't be hidden in R&D costs from 2013). Therefore, probably about 1200 - 1500 MT sold in Q1 if i had to guess, but who's to really say how much was made in Q1.

    -Kevin
    Aug 2 06:45 PM | 1 Like Like |Link to Comment
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