Hemp Product Manufacturer Reports Third Quarter Results
Nov 15, 2008 News
The same company that recently concluded bulk hemp trials and offered their CEO stock option, has just reported their third quarter earnings. Naturally Advance Technologies (NAT) has reported that, although earnings are up from the second quarter, they are down from the third quarter one year ago. As Market Watch reports:
CEO Ken Barker said, “Our third quarter sales increased 13% compared to second quarter, but declined 10% compared to a year ago, somewhat reflecting the overall economic slowdown. While we believe this may temper short-term sales, we are confident our retail and corporate customers have a long-term interest in our natural fiber garments. This year, we added more retail customers to the distribution network and increased our corporate business, which grew nine-month revenue 21%, compared to the first nine months of 2007. We also increased gross margins to approximately 41% this quarter and 38% year-to-date, indicating continued sound supply chain and operational management.”
In October, the company was wrapping up bulk hemp commercialization trials for both apparel and paper products. It’s possible, the, that Barker’s optimism is rooted in the results of those trials — i.e. he knows something that we don’t know. If through those trials NAT has found a way to cut the costs of hemp processing and pass those savings on to the consumer, it is all that much more likely that NAT will persist through this economic climate where pricier items such as those made from hemp are not expected to sell as well.
Minor Drop for Hemp Industry
Oct 21, 2008 News
Not surprisingly, it seems that the hemp industry will suffer from the recession. Coming out of the Hemp Industries Association annual conference, economists have predicted a slight drop for the month of September. As the Boston Herald reports:
The Hemp Industries Association continues its 15th annual convention at Boston’s Best Western Roundhouse Suites. The group is sharing data about expanding markets and mapping out plans to bring back hemp farming.
The Conference Board releases its index of leading indicators for September, and economists expect a drop of 0.1 percent.
Now, granted, a 0.1% drop seems negligible, but you have to keep two things in mind:
- 1) Industrial sectors are supposed to yield perpetual growth rates to be successful. This is a fundamental tenet of a growth economy. In fact, a business or sector has to grow at least at the same rate of inflation (another fundamental tenet of a growth economy) just to be stagnant.
- 2) The recession hasn’t even really begun to penetrate all sectors.
Given that the hemp sector is already anticipating a drop (albeit minute), things aren’t looking that great. Overall, the recession isn’t going to be good for most sectors, but my guess is that the hemp sector will suffer more than other consumer product sectors. After all, hemp products are still mostly a luxury or niche good, and their pricing isn’t that competitive with non-hemp counterparts because the technology necessary to process hemp has developed at an equal rate (due to legislative disincentives). Most hemp products sold, then, will likely be either (a) consumed by die-hard hempsters, or (b) as non-recurring splurge buys.
Part of the irony of all this, however, is that the type of economy (i.e. a sustainable one) that would include energy efficient and eco-friendly products such as those made from hemp, would pretty much preclude the kind of economic crisis currently underway. Not to say that hemp would solve all our economic problems, but rather that the kind of economic mindset that it takes to seriously invest in hemp technologies is largely conterminous with the kind of mindset that eschews the pitfalls of a growth economy.
Tags: economic forecast, economy, Hemp Industries Association, hia, recession
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