Certified Legendary Thread China History in the Making

[Lockhart Road]

LR liked your post before so he’s still kicking around here. I really hope the club has brought him back in now that Koch has had his moment in the sun with Gupta, because I think they need his experience.

Mate, as things stand there is no way ‘the club’ is going to bring me ‘back in’. And there is no way I’m going to volunteer to come back in. Shane Smith, PAFC Chief Financial Officer and Head of Operations for China landed in Hong Kong yesterday for the Wanganeen / Riewoldt gig organised by AustCham HK which I had no intention of attending. He flew out today to Shanghai after making no effort to contact me, even though he had been told by my colleague that I was open for a beer at the end of the day. Such is the mindset of the executives of OUR football club who report to Keith Thomas who reports to Chairman Moi. In spite of this kind of pussiness I am still doing whatever I can for OUR club up here, even with both hands tied behind my back.

 

[Janus]

Mate, as things stand there is no way ‘the club’ is going to bring me ‘back in’. And there is no way I’m going to volunteer to come back in. Shane Smith, PAFC Chief Financial Officer and Head of Operations for China landed in Hong Kong yesterday for the Wanganeen / Riewoldt gig organised by AustCham HK which I had no intention of attending. He flew out today to Shanghai after making no effort to contact me, even though he had been told by my colleague that I was open for a beer at the end of the day. Such is the mindset of the executives of OUR football club who report to Keith Thomas who reports to Chairman Moi. In spite of this kind of pussiness I am still doing whatever I can for OUR club up here, even with both hands tied behind my back.

That's very sad. Some people are more concerned with making sure their egos are stroked and not bruised rather than simply doing what it takes and letting the achievements stand on their own merits.

 

[RussellEbertHandball]

3 weeks ago I went to Penfold's at Magill - took my brother in law from Qld and my old man who worked there between 1960-69 and a few years in the mid 80's. I have since then spent time looking at Treasury Wine Estates and their restructuring reducing their brands re international sales growth from about 50 to 15, concentrating on the higher end products the last 3 years, and shocked to see their market cap is now $11 bil when it was around $2bil, 4 or 5 years ago. Growth has been driven by restructuring, Penfold's and China. Today in The Australian Business section front section story - nothing new for Lockhart Road but CEO tells others things they must factor in;

Treasury's secret to cracking China

Treasury Wine Estates chief executive Michael Clarke, who has driven the global wine company’s juggernaut success in China, where drinkers are lapping up his portfolio of premium Australian and French wines, believes Australian food producers looking to make it big in the populous Asian nation must become “part of the fabric”. Coming off the back of a stellar December-half result, with earnings from Asia now accounting for almost half of Treasury Wine’s total group pre-tax profits, Mr Clarke said local food businesses looking to make it big in China must show long-term commitment to the region, backed up by investment and patience.
.....
“I think there a couple of lessons. I think you have to show that you are committed, that you go for it full tilt and not just put a toe in the water,’’ Mr Clarke told The Australian.One way Treasury Wine — whose leading wine brands include Penfolds, Wolf Blass and Saltram — has shown its commitment to China was in Mr Clarke’s decision to rip up its old distribution model. While the group had previously operated through a third-party distribution network in China, it decided to handle the pipeline itself and take its relationship right up to the front doors of wholesalers and retailers.

“We changed our model [in China] five years ago and said ‘we are going to be our own distributors. We are not going to rely on third parties but do it ourselves’. “And we would work with the market — wholesalers, retailers, state-owned enterprises. We work closely with state-owned enterprises, very closely, and so we are not a Chinese company but we have become part of the fabric of China with our team. “And therefore we have close relationships with our retail and wholesale partners.’’ Controlling your own distribution in China can also be highly profitable. “In China we use a wholesale model where we are the distributor. Unlike our competitors we do not rely on a third-party distributor to sell our brands and therefore we do not incur the approximately 50 per cent distributor margin. “Instead, we partner with retailers, wholesalers, and state-owned enterprises, and we actively manage those relationships directly, making decisions on how and where our brands are sold with specific portfolio and channel strategies.
.....
The success of that model in China speaks for itself when sifting through Treasury Wine’s most recent financial results. In the December half, sales into Asia, mostly driven by China, leapt 32.4 per cent to $393.8 million. Earnings from the region were up 30.9 per cent to $153.1m, representing almost 50 per cent of total earnings for the winemaker.
https://www.theaustralian.com.au/bu...t/news-story/62a04aa45a1155da559813183bea77ee

 

[RussellEbertHandball]

For those interested, Treasury Wine Estates 2019 interim results investor analyst presentations is linked below.

Asia - mainly China - made up for 26% of revenue and accounted for 42% of EBIT in the 2nd half of 2018.

https://www.tweglobal.com/-/media/F...esults-Investor-and-Analyst-Presentation.ashx

The analyst in the embedded video below in the August 2018 announcement of full 2018 results story in the Tsier, says that TWE is likely to be bought out by private equity and Penfold's (Grange), Australia's only true internationally recognized luxury consumer brand, will be lost to foreign owners. Wonder if the Chinese who have wanted to buy Penfold's in the past, will make a bid?
https://www.adelaidenow.com.au/busi...p/news-story/fb7d6a28cd2ac637cbb5811a0d51561f

 

[RussellEbertHandball]

From Friday's event in Hong Kong at the Australian Chamber of Commerce which IRRC Lockhart Road and Robin Robbins were asked to help set up before Christmas and before LR got the chop.

https://www.austcham.com.hk/albums/21

In the build up to the AFL match between St Kilda and Port Adelaide in Shanghai on June 2, AustCham was proud to host AFl legends Nick Riewolt and Gavin Wanganeen on Friday, 1 March 2019. It was a rare opportunity to sit in an intimate setting to get to know the players, as well as hear their thoughts on the upcoming 2019 season. Many thanks to Port Adelaide Football Club, AFL and to our venue sponsor Mr Wolf for supporting the event.




That is our Head of Operations China & CFO Shane Smith on the far right. Don't know who that is on far left. Maybe a St Kilda official.

 

[Rising Power]

Don't know who that is on far left. Maybe a St Kilda official.

Looks like George Ezra

 

[RussellEbertHandball]

Looks like George Ezra

The Saints always seem to have the biggest list of celebrity supporters, especially from the arts.

 

[Grave Danger]

From Friday's event in Hong Kong at the Australian Chamber of Commerce which IRRC Lockhart Road and Robin Robbins were asked to help set up before Christmas and before LR got the chop.

https://www.austcham.com.hk/albums/21

In the build up to the AFL match between St Kilda and Port Adelaide in Shanghai on June 2, AustCham was proud to host AFl legends Nick Riewolt and Gavin Wanganeen on Friday, 1 March 2019. It was a rare opportunity to sit in an intimate setting to get to know the players, as well as hear their thoughts on the upcoming 2019 season. Many thanks to Port Adelaide Football Club, AFL and to our venue sponsor Mr Wolf for supporting the event.

View attachment 629633


I believe that is our Head of Operations China & CFO Shane Smith on the far right. Don't know who that is on far left. Maybe a St Kilda official.

View attachment 629635

I checked out the AustCham 'our team' link...

https://www.austcham.com.hk/aboutus/austcham-team

 

[Ishikawa]

3 weeks ago I went to Penfold's at Magill - took my brother in law from Qld and my old man who worked there between 1960-69 and a few years in the mid 80's. I have since then spent time looking at Treasury Wine Estates and their restructuring reducing their brands re international sales growth from about 50 to 15, concentrating on the higher end products the last 3 years, and shocked to see their market cap is now $11 bil when it was around $2bil, 4 or 5 years ago. Growth has been driven by restructuring, Penfold's and China. Today in The Australian Business section front section story - nothing new for Lockhart Road but CEO tells others things they must factor in;

Treasury's secret to cracking China

Treasury Wine Estates chief executive Michael Clarke, who has driven the global wine company’s juggernaut success in China, where drinkers are lapping up his portfolio of premium Australian and French wines, believes Australian food producers looking to make it big in the populous Asian nation must become “part of the fabric”. Coming off the back of a stellar December-half result, with earnings from Asia now accounting for almost half of Treasury Wine’s total group pre-tax profits, Mr Clarke said local food businesses looking to make it big in China must show long-term commitment to the region, backed up by investment and patience.
.....
“I think there a couple of lessons. I think you have to show that you are committed, that you go for it full tilt and not just put a toe in the water,’’ Mr Clarke told The Australian.One way Treasury Wine — whose leading wine brands include Penfolds, Wolf Blass and Saltram — has shown its commitment to China was in Mr Clarke’s decision to rip up its old distribution model. While the group had previously operated through a third-party distribution network in China, it decided to handle the pipeline itself and take its relationship right up to the front doors of wholesalers and retailers.

“We changed our model [in China] five years ago and said ‘we are going to be our own distributors. We are not going to rely on third parties but do it ourselves’. “And we would work with the market — wholesalers, retailers, state-owned enterprises. We work closely with state-owned enterprises, very closely, and so we are not a Chinese company but we have become part of the fabric of China with our team. “And therefore we have close relationships with our retail and wholesale partners.’’ Controlling your own distribution in China can also be highly profitable. “In China we use a wholesale model where we are the distributor. Unlike our competitors we do not rely on a third-party distributor to sell our brands and therefore we do not incur the approximately 50 per cent distributor margin. “Instead, we partner with retailers, wholesalers, and state-owned enterprises, and we actively manage those relationships directly, making decisions on how and where our brands are sold with specific portfolio and channel strategies.
.....
The success of that model in China speaks for itself when sifting through Treasury Wine’s most recent financial results. In the December half, sales into Asia, mostly driven by China, leapt 32.4 per cent to $393.8 million. Earnings from the region were up 30.9 per cent to $153.1m, representing almost 50 per cent of total earnings for the winemaker.
https://www.theaustralian.com.au/bu...t/news-story/62a04aa45a1155da559813183bea77ee

Have watched TWE with interest over the years. Last year they were reportedly in a struggle with their local wholesalers, who were left frustrated at their tactic of mandatorily lumping inferior products in with the quality in their supply contracts to clear them. Early on the Chinese end-buyers weren't quite so discerning with Australian wines due to their presumption of quality which TWE capitalised on, but was a quick lesson in what can happen if you cannibalise your premium brand chasing short term gains. They've seemingly resolved those concerns in the past year, but sounds like they've done a lot of work in that regard to address it (having a team on the gorund there in direct contact allows these issues to be identified and resolved early on before they become disasters).

https://www.afr.com/business/retail/fmcg/treasury-wine-estates-facing-china-glut-20180516-h104xz

 

[Boxx]

Has this been discussed already?

I played in the 2017 cup in the masters division... great day!

 

[OneGreatClub]

 

[Lockhart Road]

This as per usual sounds better than it will prove to be in practice. A lot of work by people we don’t employ and can’t afford to employ for a beer money return. Worse than that, I have heard the 5% is 500% up on the 1% commission the Club would have originally asked for. There are business minds and there are minds that have no business being in business.

 

[VineValerian]

This as per usual sounds better than it will prove to be in practice. A lot of work by people we don’t employ and can’t afford to employ for a beer money return. Worse than that, I have heard the 5% is 500% up on the 1% commission the Club would have originally asked for. There are business minds and there are minds that have no business being in business.

***Groan***

 

[Janus]

This as per usual sounds better than it will prove to be in practice. A lot of work by people we don’t employ and can’t afford to employ for a beer money return. Worse than that, I have heard the 5% is 500% up on the 1% commission the Club would have originally asked for. There are business minds and there are minds that have no business being in business.

When I spoke to Andrew Hunter in 2017, he told me the commission fee was 4%. So they've put it up by 1%.

 

[Lockhart Road]

When I spoke to Andrew Hunter in 2017, he told me the commission fee was 4%. So they've put it up by 1%.

It should start at 10% and rise to a maximum of 20% proportional to exceeding certain targets en route.

 

[VineValerian]

Here's a thought!

What if we put up a proposal to build a complete new oval at Alberton. The housing precinct to the east bordered by Railway Terrace, Brougham Place, Colston Street and 6th Street has around 35 or so properties on it, from an aerial view.

Some would only be worth $350k, others as much as $750k - so at an average of around $500keach plus purchase of the roads from Council (would equate to around $19mill (say $20milll).

Buy those and spend another $7mill to bulldoze them and the council roads surface for live services and contaminated soil remediation (not too much you would envisage) gives a sum of $27mill.

Build a complete new oval on that next to Alberton oval proper, irrigated, with fencing to the perimeter - another $2mill.

Add in secure fencing, a carpark on the grassed area to the back of the Scott Power HQ, some mounding and concrete terrace plus fixed seating another $3mill.

Some covered areas to shelter from the elements - $1mill.

A new Gym, child minding centre/creche and minor retail space - $6mill.

New Indigenous male and female boarding facilities and change rooms - $10 mill.

A bar and food area - $1mill.

Separate male and female change rooms for general use - $2.5mill.

Professional standard lighting to Alberton oval and the new venue - $4mill.

Sundries of $2mill.

Total = $61mill (round it off to $70mill for luck).

Get Mr Gupta and all our Chinese connections to dib in $15mill. Get the Feds and State Govt to contribute $40mill and $15mill respectively, and there it is.

Ticks all the boxes for multicultural and indigenous (both male and female). Can be used to play night SANFL and even Ammos matches, and any games that the NGI or the women's group need to play. Can rent it out to groups to use. Have two ovals to house the Power Aboriginal Cup games instead of one. Can be the hub for ALL women's and indigenous/multicultural catchment area on the western side of Adelaide (or beyond!).

Provides a new gymnasium facility for the burgeoning Port area. A new outlet for young mum's to meet and socialise. A great facility for Ammos and junior grades to host games and carnivals. And we still keep the historic Alberton Oval (with better lights too).

Nah! On second thoughts, too radical. Scrap that idea.

 

[Lockhart Road]

Here's a thought!

What if we put up a proposal to build a complete new oval at Alberton. The housing precinct to the east bordered by Railway Terrace, Brougham Place, Colston Street and 6th Street has around 35 or so properties on it, from an aerial view.

Some would only be worth $350k, others as much as $750k - so at an average of around $500keach plus purchase of the roads from Council (would equate to around $19mill (say $20milll).

Buy those and spend another $7mill to bulldoze them and the council roads surface for live services and contaminated soil remediation (not too much you would envisage) gives a sum of $27mill.

Build a complete new oval on that next to Alberton oval proper, irrigated, with fencing to the perimeter - another $2mill.

Add in secure fencing, a carpark on the grassed area to the back of the Scott Power HQ, some mounding and concrete terrace plus fixed seating another $3mill.

Some covered areas to shelter from the elements - $1mill.

A new Gym, child minding centre/creche and minor retail space - $6mill.

New Indigenous male and female boarding facilities and change rooms - $10 mill.

A bar and food area - $1mill.

Separate male and female change rooms for general use - $2.5mill.

Professional standard lighting to Alberton oval and the new venue - $4mill.

Sundries of $2mill.

Total = $61mill (round it off to $70mill for luck).

Get Mr Gupta and all our Chinese connections to dib in $15mill. Get the Feds and State Govt to contribute $40mill and $15mill respectively, and there it is.

Ticks all the boxes for multicultural and indigenous (both male and female). Can be used to play night SANFL and even Ammos matches, and any games that the NGI or the women's group need to play. Can rent it out to groups to use. Have two ovals to house the Power Aboriginal Cup games instead of one. Can be the hub for ALL women's and indigenous/multicultural catchment area on the western side of Adelaide (or beyond!).

Provides a new gymnasium facility for the burgeoning Port area. A new outlet for young mum's to meet and socialise. A great facility for Ammos and junior grades to host games and carnivals. And we still keep the historic Alberton Oval (with better lights too).

Nah! On second thoughts, too radical. Scrap that idea.

Too radical? Nah. Too conservative.

 

[bomberclifford]

I'm with LR on this. A commission that's barely above bank interest is pointless.

 

[bomberclifford]

Here's a thought!

What if we put up a proposal to build a complete new oval at Alberton. The housing precinct to the east bordered by Railway Terrace, Brougham Place, Colston Street and 6th Street has around 35 or so properties on it, from an aerial view.

Some would only be worth $350k, others as much as $750k - so at an average of around $500keach plus purchase of the roads from Council (would equate to around $19mill (say $20milll).

Buy those and spend another $7mill to bulldoze them and the council roads surface for live services and contaminated soil remediation (not too much you would envisage) gives a sum of $27mill.

Build a complete new oval on that next to Alberton oval proper, irrigated, with fencing to the perimeter - another $2mill.

Add in secure fencing, a carpark on the grassed area to the back of the Scott Power HQ, some mounding and concrete terrace plus fixed seating another $3mill.

Some covered areas to shelter from the elements - $1mill.

A new Gym, child minding centre/creche and minor retail space - $6mill.

New Indigenous male and female boarding facilities and change rooms - $10 mill.

A bar and food area - $1mill.

Separate male and female change rooms for general use - $2.5mill.

Professional standard lighting to Alberton oval and the new venue - $4mill.

Sundries of $2mill.

Total = $61mill (round it off to $70mill for luck).

Get Mr Gupta and all our Chinese connections to dib in $15mill. Get the Feds and State Govt to contribute $40mill and $15mill respectively, and there it is.

Ticks all the boxes for multicultural and indigenous (both male and female). Can be used to play night SANFL and even Ammos matches, and any games that the NGI or the women's group need to play. Can rent it out to groups to use. Have two ovals to house the Power Aboriginal Cup games instead of one. Can be the hub for ALL women's and indigenous/multicultural catchment area on the western side of Adelaide (or beyond!).

Provides a new gymnasium facility for the burgeoning Port area. A new outlet for young mum's to meet and socialise. A great facility for Ammos and junior grades to host games and carnivals. And we still keep the historic Alberton Oval (with better lights too).

Nah! On second thoughts, too radical. Scrap that idea.

You forgot to factor in the $15mil on kickbacks, $5mil on consultants, with another $5mil on different consultants to tell you why the first consultants were wrong. Then there's legal fees, which could be anywhere from $5mil to $10mil. Oh, and council approval 'lubrication'. I hear that is a bit of a boom industry these days.


Still, ~$100mil is a pittance in the scheme of things. If you add in some urban development on both sides of the train tracks, upgrade the train station as part of the precinct, shoptop living precinct and community access spaces, it would be a bargain.

 

[RussellEbertHandball]

Watching ABC Foreign Correspondent story at the moment about Venice and how the tourists are killing the city, especially the big cruise ships with most of the levies going to Rome and not the city. The reporter said Americans and Europeans make up most of the tourists. Then she said and the Chinese are coming.

Then she said something I had never heard before. Less than 10% of Chinese have passports. We have talked about tapping into the growing number of tourists coming to Oz and that in 2017 they took over from Kiwis as the #1 country tourists coming to Oz. What the hell happens if 90% and not 10% get passports and they become true middle class country?? There are some decent opportunities.

 

[chiwigi]

Watching ABC Foreign Correspondent story at the moment about Venice and how the tourists are killing the city, especially the big cruise ships with most of the levies going to Rome and not the city. The reporter said Americans and Europeans make up most of the tourists. Then she said and the Chinese are coming.

Then she said something I had never heard before. Less than 10% of Chinese have passports. We have talked about tapping into the growing number of tourists coming to Oz and that in 2017 they took over from Kiwis as the #1 country tourists coming to Oz. What the hell happens if 90% and not 10% get passports and they become true middle class country?? There are some decent opportunities.

You see it in China itself, much of the tourism is currently internal. The monuments in the cities etc. are packed!

 

[VineValerian]

You forgot to factor in the $15mil on kickbacks, $5mil on consultants, with another $5mil on different consultants to tell you why the first consultants were wrong. Then there's legal fees, which could be anywhere from $5mil to $10mil. Oh, and council approval 'lubrication'. I hear that is a bit of a boom industry these days.


Still, ~$100mil is a pittance in the scheme of things. If you add in some urban development on both sides of the train tracks, upgrade the train station as part of the precinct, shoptop living precinct and community access spaces, it would be a bargain.

Ah yes.
Forgot the old slush fund and kickbacks factor.

 

[RossFC]

Announcement in Melbourne tomorrow. RE: China

 

[Papa G]

Announcement in Melbourne tomorrow. RE: China

Cancelled?

 

[RossFC]

Cancelled?

Probs not.