Hello Everyone. I know it’s been quite a while since I've posted anything here, so here I am again.
For the past 18 months, we have been working hard towards our goal. I hope you are all updated and that you know that land acquisition has been our main priority. I have been involved with every aspect and step of the land acquisition process, except the initial land visit and meeting the locals. Luckily, we have a team that I trust, meaning that these tasks have been delegated to Gustavo and Esto, our public relations staff in Sumba.
Picture: My first visit to our new land. From left to right: Gustavo, me, Umbu (local king), Esto (top) and Buce (Umbu's friend).
Since it’s such an important thing, today, I want to walk you through the process of land acquisition, which is one of our biggest challenges and, thus, our main opportunity. If it was easy, there wouldn’t be any land available for us to grow our business.
We come across people offering land every now and then, more often than you would imagine, so the first step is to filter the opportunities presented to us. Asiabeef is actually well known in Indonesia, within and outside the government. Therefore, quite often, I get a call or message from someone who knows someone who has a prospective land somewhere and, "of course", this someone is powerful, owns the land or knows the owner of the land, which obviously is not always the truth. I would say that 90% of the time is just someone looking for easy money.
With that said, the first step in a land acquisition is asking for the basic information about the person and land and, if everything makes sense, we arrange a meeting. I usually prefer a neutral ground for this first meeting, so it’s usually a lunch or dinner.
After the meeting, if we have a good feeling about it, we start our due diligence process. The first follow up is to ask for the land coordinates and whatever documents and maps the person has regarding the prospect. I would say that 50% of the time, they don’t have anything or are unable to provide anything in a timely manner to confirm what they said during the meeting, which is upsetting.
After we get the documents, we do 2 things: a) a google earth survey to see the elevation of the land and whether there are any villages, crops, plantations or other business activities within the area; and b) check with the government the status of the land, whether it is a forestry area, land belonging to the government or if someone else already owns the land. This is the cheapest way to filter the opportunities and only about 20% of the time we are satisfied with the results of this stage. This means that for every 10 prospects, only 1 of them is a real opportunity.
Next, we go on a field trip to visit the land and meet the locals, which is not an easy task. It involves expenditures and it takes us to remote and wild places. The survey team has 3 clear objectives: a) check the area to confirm our assumptions in regards to the non-existence of activities on the land, climate, fresh water supply, land elevation and slope; b) verify the land status, by talking to the locals, head of the village and lower level local government staff from the forestry ministry and land ministry (BPN); and c) check the local infrastructure, such as port, shipping routes, roads, service providers, local stores and availability and pricing of construction material.
On our next post, we have a short video showing a little bit of the trips and site visits in the past 18 months.