President’s Message Jan 2010January 21st, 2010
Goodbye to 2009 and hello 2010. The end of a tumultuous decade that began with the 9/11 terrorist attacks and ended with the global financial crisis. These two events singlehandedly made the 2000’s the worst financial decade since the 1930’s as measured by the S&P 500 (down 24.1%).
The past decade has brought huge and rapid changes to our lives. Technology changes like cell phones driving the picture and video explosion. The Blackberry changed how we do business with wireless communications now the expected norm. We have seen massive market and global economic change with the rise of China, India and Brazil but most notable, the polarization of first world consumers and developing world producers. Our air travel has become much more onerous and climate change a huge issue for humankind. The last decade has indeed been a wild ride, but for many, not a fun ride at all.
For minerals and exploration the past decade has been an unusual decade. It was a commodities decade. It contained the longest exploration bull market in recent history and one that did not end due to oversupply of metal or inflationary constriction of demand, but rather the external freezing of the financial markets. This makes it unique. Commodities were the “in” place to be for the first time in many, many years. Normally, when traveling, I was used to the blank stares from other travelers when I told them I was in the mining and exploration business. They were usually dumbfounded and unable to speak the immediate question that came to mind. Why? Suddenly this changed. For the first time in decades, people responded with excitement and sometimes even with awe. Their new response had become; “Wow, really?”, and a long conversation would ensue. All of a sudden mining and exploration had respect.
The coming year will bring some notable events. China will overtake Japan as the second largest economy in the world, and in India, 2010 will mark the first time that more than half of their population will be employed in industrial jobs rather than in farming. Global demand for metals remains historically high and growing. The factors driving our industry prior to the financial meltdown are still in place although we have some new factors in play that global economies must work through. In the United States, high debt loading (both government and consumer debt) is slowing U.S. recovery. The resulting weaker U.S. dollar is shifting the playing field for international business. With the rapid growth in the middle class in the developing world, this may lead to a more balanced world where we are not so dependent on the U.S. consumer. Never before have the words “think globally, act locally”, been more appropriate. Never before has it been so important for us to understand the global forces that impact us professionally and personally. Mining is truly a global business and presuming the U.S. continues to rotate back into growth, our ability as an industry will be sorely tested to find the new mines needed to feed this new level of global demand.
Acme Analytical Laboratories, like most other companies has had to weather the financial storm over the past year. This has been an unusually challenging period, especially due to wildly varying sample volumes and uncertainty about the future. Acme has been lucky to have had the financial strength to not only survive, but to move forward by taking advantage of opportunities. This has allowed us to gain projects and new locations in North and South America. Acme will open offices in Whitehorse, YT and in Copiapo, Chile to serve growing exploration markets in those regions. We have made further investments into Brazil , Colombia, Dominican Republic, Santiago, and Vancouver to move or expand operations.
Our big news for 2009, was the purchase of Teck Resources Global Discovery Laboratory (GDL). GDL has been operating for over 35 years, providing professional analytical services to Teck Resources and other exploration companies. Teck wanted to retain this special relationship from both a staff and service perspective, but needed these on a global scale. Acme wanted to add analytical capabilities for our customers along with the professional staff to support them and so the basis of an agreement was born. We are just completing the construction of new laboratory space in our Vancouver office and moving the GDL equipment and staff. This should be complete by mid January. In addition, due to much higher than expected demand, we are adding additional XRF analytical instrumentation. This will also be in place before the end of January. This will help us ensure we can meet customer expectations both for speed and data quality by using the latest instrumentation.
Our motto of Care, Commitment, and Performance accurately speaks to Acme’s corporate culture. For us, these words apply equally to the treatment of our customers and our staff. We must continue to grow and attract the best people if we are going to continue to be successful serving our customers. We have come through some difficult times and we are determined to live up to these words through hard work and strategic investments.
I wish you a successful new year, but most of all, I would like to thank you for your continued support.