Pereira explains MHG progress
Published 12:08 am Saturday, November 15, 2014
Paul Pereira, CEO of Meredian Holdings Group, Inc. spoke to the Rotary Club Tuesday. It was his second time to appear at Rotary, as nearly a year ago he came and spoke about Meredian and DaniMer shortly after he became involved with the companies.
Pereira said the two companies had been struggling to move forward, leaving shareholders frustrated and concerned about the path to success.
Pereira’s role was to restructure the companies and create a business plan to move the companies forward.
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At his first Rotary appearance he promised DaniMer would be profitable by the end of December of 2013. He said that promise has been fulfilled as it turned a profit of just under a million dollars.
A second promise he made was that the two companies would be merged and new strategies set. This was accomplished June 2, 2014. He said this had been a complex process because of the many different share classes of stock offered to shareholders and promises of returns that put $100 million dollars of liability on the company before the new investments could see any return.
“In a situation like that, no new investor, or big money Capital Market is going to come in and invest knowing that before they can get their money out they have $100 million liability ahead of them.” He continued to explain how a business begins with a dream and this one was at the point where it was necessary to inject commercialization and business strategy in order to move the company from the chemistry lab into the business world.
“Believe it or not, between the two companies, we got rid of $100 million worth of liability and got rid of all those different types of stock. The shareholders were very supportive of this merger, and not one shareholder sold their stock,” said Pereira.
As a result of the merger the two companies are now called MHG.
Pereira said they were poised to move forward and raised new capital to start to build out the new projects and reposition the company internally, where every executive and every manager within the organization is now held accountable and performance measured to give shareholders realistic goals of moving forward.
He said before the merger they had been working with BSAF, Henkel and DART, but most were highly concerned about where the company was going and had begun to lose confidence in their ability to follow through.
The office restructuring moved Scott Tuten out of DaniMer production and made him chief marketing officer. Michael Smith, an engineer, was made chief operating officer. John A. Dowdy III was brought in and made chief financial officer, Phil Van Trump was made chief technology officer and Blake Lindsey made chief administrative officer. “Most of you know Daniel Caraway. I felt I should mention he’s no longer with us and he has chosen to go off and do his own thing and we wish him all the best,” explained Pereira.
At this point, he said, the floodgates began to open and they delivered more samples than ever before—60 samples to more than 30 different companies and “productivity went through the roof.”
Pereira then made a new promise, saying MHG is estimated to turn a profit by the end of the first quarter of 2015.
He continued to explain that as the company has now become a brand, they are being contacted by interested world leaders, most recently Canada and the Ministry of Finance in Malaysia.
He cited that BASF, a leading manufacturer of Agro mulch film currently makes two hundred million pounds of the product each year for farmlands. It is a film that covers the ground before growing the crop. When finished, it is ground up or thrown away. It does not degrade and cannot be buried or it will cause the land to become unproductive. This can be a big problem to farmers.
Europe is requiring this film to be renewable by 25 percent and BASF has been unable to meet that requirement. He said China has a similar problem, with 30 percent of their lands failing, as they grind up the film and leave it in the soil.
Periera promises that MHG makes a product that can solve these problems, and that BASF told them at their last meeting that they were humbled by the fact that MHG actually made a product twice as good as what they had been selling for the last five years, and that BASF was unable to replicate it.
This means that MHG has changed its marketing and everything that they are doing is now paid for. “That’s the big difference as we move this company towards commercialization. Customization and the research and development that our customers have been getting for the last 10 years for free is now charged for. Nothing is for free.”