Sorry, but I have to differ with your assessment h
Post# of 17862
Posted On: 10/30/2013 9:25:17 AM
Sorry, but I have to differ with your assessment here. You suggest that HIMR has only one real competitor and that HIMR's technology is far and away better - I think that is a fair paraphrasal. First, let me note that I think HIMR and its shareholders can be very successful without being the leader, without having the most productive technology or the most fiscally efficient technology, without having the most concessions, and shareholders can do great without an irrational hyperbolic move that can happen with a sub-penny (I'll go silent when the time comes - don't worry).
Companies that use divers with saws are sometimes serious competitors. It will vary with lake itself and the quality and cost of the local labor. Coast Eco Timber seems to have a good production rate using Kuna divers with saws. In an article on canada.com ("B.C. logging firm to cut timber submerged in Panama lake"), they discuss Coast Eco Timber's concession on Bayano as having a potential revenue of 15 million the first year. The thing that stands out to me in that article is that it notes she has a contract with a china owned mill to supply $2 million in logs a quarter. Since Coast Eco Timber is a retailer as well, we know they want wood for themselves, so this $8 million a year contract must be based on conservative estimates of what they can harvest using divers with saws.
Having developed better technology improves the long term upside, but also raises the risk when a company is struggling to accommodate the expense of that of that technology.
You refer to Triton's Sawfish as having a problem with its tether getting entangled. The only place I've read that, they were talking about during its development phase and said they worked out the problem. Further, that would seem to be a pilot error problem and it might be unfair to attribute to a technology if the pilot has the tools to avoid it. Sawfish has gone through enhancements thru its development, so a problem noted in an article dated 2005 may not be relevant to its current version - but again, the only time I see a problem discussed is in an article is when its developer is reminiscing about some challenges he faced in its early development. Also, you say that after the tree is cut it takes off like a rocket and Sawfish is helpless to do anything about it. Well....there is a safety issue there, but assuming that is manageable it isn't a problem that the tree goes to the surface on its own. They drill an airbag into it and inflate it before cutting which ensures it stays on the water's surface to be retrieved. Sawfish attaches below where it cuts, so the rising tree doesn't bother it at all, it just moves on to the next target, which is what you want. Sawfish holds 50 airbags, so after it uses those it has to be brought up to get more. They probably just wait to collect the logs when Sawfish is ready to come up. It doesn't seem too hard to manage the safety issue. (Wired 15.02: Reservoir Logs)
The depth of reservoirs will vary greatly and so, the advantage of a tethered ROV is that it is an any depth technology. A given Sawfish could be used for any concession. In some articles it says the Sawfish can harvest around 250 trees a day, in others it says more than a hundred a day. In some it says the Sawfish can get the cost of cutting and gathering comparable to land logging and potentially even cheaper than land logging using a feller buncher (the cheapest land method). On Oosta Lake, they put the operational costs around $40 per cubic meter compared to $50 per cubic meter for land harvesting using a feller buncher (in B.C. I suppose). Gathering and getting the logs to mill can be cheaper on water than land, so getting the cost of cutting and gathering water wood comparable to land logging can endure a higher cost for cutting.
For shallow reservoirs they have the SHARC. You say SHARC has a maximum depth of 30 feet, but on Triton's website it says up to 40 meters underwater. I think SHARC is like Tiger-Lynk in that it can operate at the depth it is built to operate at without there being a principled reason why it couldn't be built to go deeper. On Lake Volta, they use the SHARC because it is a shallow reservoir. On the deeper Lake Ootsa they use Sawfish. They worked Lake Kenyir in Malaysia for awhile as a subcontractor, which is a deep lake, and had three Sawfish there. The picture you paint is that they lean on SHARC because Sawfish doesn't work so well. I've read a lot of articles and the picture I see is just that they use their shallow technology for a shallow lake and their any depth technology for deeper lakes.
I think Tiger-Lynk is the more elegant technology with a labor saving and safety advantage. It seems like it would be much better for salvage operations than competitors due to its maneuverability. Also, the Kuna might just like it more than the divers with saws approach and be inclined to let us have another concession or two. We should expect with every concession that those awarding the concession will get most of their compensation through a royalty or tax on revenue. And so, if you can generate revenue faster, you are also generating income faster for those that award and you are more likely to win other concessions subsequently. Can it get the operational cost of underwater harvesting comparable to land harvesting for a given locale? I hope so. After you pay for the Tiger-Lynk, definitely. Maybe we should think of Tiger-Lynk (and its competitor technologies) as like a curse that can become a blessing if the expense can be skillfully accommodated. The hoped for concession at lake Bayano seems to have more than adequate profit potential to accommodate that and the accumulated liabilities.
Companies that use divers with saws are sometimes serious competitors. It will vary with lake itself and the quality and cost of the local labor. Coast Eco Timber seems to have a good production rate using Kuna divers with saws. In an article on canada.com ("B.C. logging firm to cut timber submerged in Panama lake"), they discuss Coast Eco Timber's concession on Bayano as having a potential revenue of 15 million the first year. The thing that stands out to me in that article is that it notes she has a contract with a china owned mill to supply $2 million in logs a quarter. Since Coast Eco Timber is a retailer as well, we know they want wood for themselves, so this $8 million a year contract must be based on conservative estimates of what they can harvest using divers with saws.
Having developed better technology improves the long term upside, but also raises the risk when a company is struggling to accommodate the expense of that of that technology.
You refer to Triton's Sawfish as having a problem with its tether getting entangled. The only place I've read that, they were talking about during its development phase and said they worked out the problem. Further, that would seem to be a pilot error problem and it might be unfair to attribute to a technology if the pilot has the tools to avoid it. Sawfish has gone through enhancements thru its development, so a problem noted in an article dated 2005 may not be relevant to its current version - but again, the only time I see a problem discussed is in an article is when its developer is reminiscing about some challenges he faced in its early development. Also, you say that after the tree is cut it takes off like a rocket and Sawfish is helpless to do anything about it. Well....there is a safety issue there, but assuming that is manageable it isn't a problem that the tree goes to the surface on its own. They drill an airbag into it and inflate it before cutting which ensures it stays on the water's surface to be retrieved. Sawfish attaches below where it cuts, so the rising tree doesn't bother it at all, it just moves on to the next target, which is what you want. Sawfish holds 50 airbags, so after it uses those it has to be brought up to get more. They probably just wait to collect the logs when Sawfish is ready to come up. It doesn't seem too hard to manage the safety issue. (Wired 15.02: Reservoir Logs)
The depth of reservoirs will vary greatly and so, the advantage of a tethered ROV is that it is an any depth technology. A given Sawfish could be used for any concession. In some articles it says the Sawfish can harvest around 250 trees a day, in others it says more than a hundred a day. In some it says the Sawfish can get the cost of cutting and gathering comparable to land logging and potentially even cheaper than land logging using a feller buncher (the cheapest land method). On Oosta Lake, they put the operational costs around $40 per cubic meter compared to $50 per cubic meter for land harvesting using a feller buncher (in B.C. I suppose). Gathering and getting the logs to mill can be cheaper on water than land, so getting the cost of cutting and gathering water wood comparable to land logging can endure a higher cost for cutting.
For shallow reservoirs they have the SHARC. You say SHARC has a maximum depth of 30 feet, but on Triton's website it says up to 40 meters underwater. I think SHARC is like Tiger-Lynk in that it can operate at the depth it is built to operate at without there being a principled reason why it couldn't be built to go deeper. On Lake Volta, they use the SHARC because it is a shallow reservoir. On the deeper Lake Ootsa they use Sawfish. They worked Lake Kenyir in Malaysia for awhile as a subcontractor, which is a deep lake, and had three Sawfish there. The picture you paint is that they lean on SHARC because Sawfish doesn't work so well. I've read a lot of articles and the picture I see is just that they use their shallow technology for a shallow lake and their any depth technology for deeper lakes.
I think Tiger-Lynk is the more elegant technology with a labor saving and safety advantage. It seems like it would be much better for salvage operations than competitors due to its maneuverability. Also, the Kuna might just like it more than the divers with saws approach and be inclined to let us have another concession or two. We should expect with every concession that those awarding the concession will get most of their compensation through a royalty or tax on revenue. And so, if you can generate revenue faster, you are also generating income faster for those that award and you are more likely to win other concessions subsequently. Can it get the operational cost of underwater harvesting comparable to land harvesting for a given locale? I hope so. After you pay for the Tiger-Lynk, definitely. Maybe we should think of Tiger-Lynk (and its competitor technologies) as like a curse that can become a blessing if the expense can be skillfully accommodated. The hoped for concession at lake Bayano seems to have more than adequate profit potential to accommodate that and the accumulated liabilities.
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