Fox Marble Holdings PLC (LON:FOX) Chief Executive Officer Chris Gilbert caught up with DirectorsTalk for an exclusive interview to discuss the resumption of production and new sales.
Q1: We saw today the resumption of processing and a new order coming through, what does it mean for Fox Marble Holdings to achieve this order in February?
A1: It’s not a process, it’s a resumption of production after the usual winter shutdown which we experience in our quarries every year, sometimes it’s quite dramatic the winter in the Balkans, temperatures go to -20 degrees and there’s 10 foot of snow.
This year, and for no good reason, the weather has broken early, particularly in Prilep in the south of Macedonia where our white Alexandrian White stone quarry is located. As a consequence of that, we’re able to resume extraction and working in the quarry earlier than we normally do, sometimes it’s as late as the beginning of April so that’s a bit of good fortune for us this year.
The consequence of that, I think for the first time ever, we have been able to fulfil a significant order in February which is early for us. As it happens, this is an order that is significant not only because of the size of the order, because it’s 400 tonnes which is sizable for us, but also because of who the purchaser is and who the order’s gone to and as it happens, the trucks have already started moving and the blocks are already moving out of the quarry.
Of course, as is usual with our terms of business, we did get paid before any of this happens, so we’re relatively pleased with this.
Q2: Now, you’ve said this is a significant customer, who is the customer? It was 400 tonnes wasn’t it?
A2: The reason I say the customer is significant is that the customer that purchased this, it’s actually an individual who owns a company in Greece and this company called FHL is the company that used to own the quarry that neighbours our quarry that produces the same stone.
This company that used to own this quarry, sadly for them it no longer owns this quarry which is part of the reason they’ve come to us, this is the guy that basically extracted this stone from the quarry when he owned it back in the day, 15 years ago, and supplied it to the Sheikh Zayed Grand Mosque in Abu Dhabi. The Sheik Zayed Grand Mosque is a sort of eight wonder of the world, it’s actually where Sheikh Zayed is actually buried, of course he was alive at the time when he spent $14 billion building it, it’s a million square feet of Alexandrian White basically.
So, really, this guy is the king of this material around the world and he established his reputation through this transaction, as a consequence of which this white marble is very desirable and much in demand around the world. He’s now come back to us saying ‘I’m still very very active in the field with this marble and I’d like to buy it from’ so of course, we’re very pleased and the intention is that he will come back on a regular basis and buy lots more.
Q3: The Prilep quarry, you mentioned it earlier, how is it progressing especially with respect to the recent fundraising that you did?
A3: As with all quarries, when you start a quarry operation and you open these quarries, it takes a period of time to develop them to the point where they are capable of providing commercial quantities of consistent compact blocks that are of the type that people will buy.
We did that, we got ourselves into that position with this quarry, I suppose the year before last and we have had a certain production rate from this quarry which is, in world terms, relatively speaking, quite low. We got to the point where our activities in marketing, selling and distributing this product has got to the point where the demand is building up as we can see coming through now.
We recognise what we need to do was really improve the speed with which we can take marble out of this quarry to satisfy the demand and the recent fundraising was designed to put a lot more equipment into the quarry, to this particular quarry and one of the quarries in Kosovo.
Since then, I’m happy to report that obviously we were successful in our fundraising which is great and since then, our procurement team have acquired all of the equipment, particularly the heavy stuff, the excavators and the loaders which are the heart and soul of moving heavy stone around the quarries. That equipment in now the quarry and is now working as an expanded operation to substantially increase the rate of production.
So, all that we had planned and all of what we said we were doing, we have now accomplished, consequently we’re able to fulfil these orders that are coming in, 400 tonnes, 500 tonnes, that sort of thing. That’s really the consequence of the processes we’ve been through.
Q4: What exactly is the implication for the company for this new development of equipment in the quarry?
A4: We’re deploying this equipment into the quarry which we’ve now done, as I’ve just said, and we’re doing in our principal quarry in Kosovo, the Malishevë quarry which produces the very popular and very in demand silver/grey and the Illirico Bianco, our off-white in that quarry.
This is allowing us to significantly increase our production and meet the demand that we have created so we will be able to say, throughout the course of this year, as our production increases and is increasing already, and as we fulfil the demand around the world, we’ll be able to say basically, we’re taking a lot more marble out of the ground and we’re selling it tour customer base. These are regular customers that coming back on a monthly basis and take significant quantities regularly.
So, these multiple customers in different jurisdictions who have been repeat ordering and want to come back for more, that form the core base of our sales activities throughout the course of this year, that will all reflect in the bottom line revenue numbers that we will be sharing with everybody throughout the course of the year.
Q5: What’s happening in Fox Marble’s Kosovo quarries?
A5: Not much at the moment, it’s still very cold there, it’s warming up and again, I think it’s earlier than last year which is great for us, temperatures can reach well into the positives in the day, it drops to -2 degrees at night which is not terrible for us.
So, we are now moving back into the quarry, doing the usual early-spring clean-up and getting everything ready, as I said, we’re all in full procurement process so we’re moving new equipment, more machinery into particularly our principal Malishevë quarry.
I would expect, again weather-dependent, in 2, maybe 3 weeks that we will be fully operational with a full resumption of activities in that quarry and able to satisfy this demand that we’ve built through the world. We’ve literally got customers lining up saying ‘tell us when we can come back to the quarry and see mo0re material and we’ll take it away’.
So, we won’t be announcing every sale, because that would be ridiculous, but we will be announcing significant movements of this material into our regular customer base as they take place and that we’re literally on the cusp of doing, as I say, next couple of weeks, looking at the way the weather is going, I think that’s probably right.