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Monday, March 05, 2007

Conforce (CFRI) rolls out EKO-FLOR trial order

I just caught this one:

Oceanex (OAX-UN.TO) a very small (roughly 20,000 containers in Q4) shipping company is placing a trial order for Conforce's new EKO-FLOR. If all goes well, Oceanex is expected to place more orders during 2007.

And here's something to think about: Conforce is setting the amount of EKO-FLOR to be shipped during 2007 by allocation. This means there's more demand than capacity and Conforce is picking and choosing customers. That being the case, why would they pick some tiny shipping company as the first one?

Since volume will be determined by allocation, Conforce will have revenue and earnings projections for the year very soon, by March 23, 2007.

UPDATE same day:
I'm thinking that the reason EKO-FLOR is going to be on allocation is because supply is very small and not because demand is very high. Nothing wrong with that at this point, but it would be mild good news, not great news. If we see a big shipper making a trial order, that would be very good. Two would be wonderful.

I'm much more interested in the upcoming 2008 projections than 2007 (both due March 23). This year they will be ramping up. Next year I'm hoping they'll be in full production at multiple sites.

How does Conforce look to you now?
How does it look? I'd roughly the same, but a bit worse. I expect dilution in ramping up EKO FLOR, especially with them out of cash now (the cash situation may be a timing issue). But I've always expected dilution. Nothing significant has changed in my view.
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