Flexible Solutions International, Inc. (AMEX:FSI) Q4 2022 Earnings Call Transcript

Daniel O’Brien: Yeah. And then the third area is the growing food industry. The advantage there is that in the food industry, none of our suppliers will be from Asia. And none of our customers — all of our customers will either be in the United States or Europe. So we see that as both a very profitable business in itself, but as a very useful counterbalance or hedge to issues that can come up between America and Asia. So I think over the next five years, what you’ll see is the food grade division growing, hopefully, as rapidly as the other two in agriculture, but with potentially better margins. And of course, less risk. So if you…

Timothy Clarkson: Would 20% be a reasonable guest just in general on that right now?

Daniel O’Brien: It’s not 20% today. Now it’s less than 10% today, we’d like to 30% across by…

Timothy Clarkson: Okay. Great. And what would be the application on the food stuff that would — what’s the value added for that? Why would someone buy that?

Daniel O’Brien: Well, we’re an exceptionally skilled toll manufacturer. So we expect a lot of it to be toll business that the customer will not want to put a $5 million machine into their operation. They will say to the flexible solutions or the NanoChem division. They’ll say, how much would you charge us to make this because we don’t want to have the employees, the management or the equipment. And we’ll say, raw materials times x plus packaging and how many hundred tons do you want to gear. So that’s one situation. There are also situations where we believe we can invent things that will be better than the existing products and be able to go out into the food and nutraceutical market and say, you’re using X, Y and Z here is there’s a better product at the same price and take market share from market

Timothy Clarkson: Right. Have you hired talented people to be able to do those things?

Daniel O’Brien: Rather than hiring them, we have connections that carry commissions, and we did hire into our factory 1% as the expertise. So yes, we’re in a position to do this. And we’re using the older gentleman, we hired with several decades of experience as the mentor for our younger guys who are going, vary on after he goes.

Timothy Clarkson: Right. Now if you make this product for food, what would be the benefit that someone would be looking for? What would be a typical benefit without disclosing secrets that someone would be using this for?