Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


BioVittoria depends on new food brands for growth

BioVittoria depends on new food launches for growth

by Pattrick Smellie

Nov 10 (BusinessWire) - BioVittoria Ltd's patented PureLo sweetener will only grow as fast as the food and beverage industry launches new products, the company's prospectus for its $20 million New Zealand sharemarket float makes clear.

While PureLo is touted as a credible contender for a slice of the global sweeteners market, estimated to be worth US$50 billion annually, the prospectus says the higher cost of PureLo means it will never compete on price with sugar, which it is capable of replacing.

PureLo is 150 times sweeter than sugar and made from the juice of the Chinese luo han melon fruit, whose productivity has been enhanced by New Zealand and Chinese scientists, based on Kiwi technology that allowed kiwifruit plantings to boom from the 1980's.

The resulting powder is able to be described as "natural" and "zero-calorie" under US Food and Drug Administration regulations. The product is already a legal food in the US and is applying for upgraded status that should improve its likelihood of attracting manufacturer interest.

However, PureLo's cost would add around US5 cents to a standard bottle of carbonated soda drink.

"The company does not expect to see adoption of this ingredient for mass-market products such as sodas in the near term," says the prospectus, which describes BioVittoria as a high risk investment despite having patented plants, systems and manufacturing plant in place. "Because of the difference in cost, and the need to communicate the ingredient benefit to the consumer, BioVittoria is expecting that sales of PureLo will generally be driven by new product launches.

"This is reflected in the projected financial statements as a gradual build in revenues, as food and beverage companies are limited in the number of new products they can launch annually."

The company projects net, after tax losses above US$5 million for the 2010 and 2011 financial years, but producing a US$4.36 million profit by 2013, when sales are projected to be US$35.78 million, compared with US$4.38 million projected in the current financial year.

BioVittoria expects to producing 60 tonnes of PureLo at its new manufacturing facility in Guilin, a city in the southern Chinese province of Guangxi , with potential for 250 tonnes.

While the company's product is driven by bio-technology exploiting the desire for better nutrition, the prospectus reveals that BioVittoria's ambitions rest to a large extent on successfully creating a new consumer brand based on PureLo.

"As one ingredient in the global food industry, PureLo could become an undifferentiated component in the overall food product mix. BioVittoria believes the development of a comprehensive brand architecture and a compelling articulation of the benefits for consumers will allow PureLo to be recognised on-pack as a unique ingredient, and to be positioned at a premium to other sweeteners."

To back that effort, the prospectus reveals an impressive line-up of American, Chinese and New Zealand management talent, scientific and marketing expertise.

Joining the board after the float will be Christopher Sinclair, a retired chairman and chief executive of Pepsi-Cola Company with 30 years' experience in the highly competitive US food and beverages market, and advising the board is Danny Strickland, a former Chief Innovation and Technology Officer at The Coca-Cola Company. Its chairman, Bob Stringer, is an American venture capital fund founder with extensive governance and Australasian experience.

The chief executive of the Hamilton-based company, David Tharrold, has international management consultancy and accounting experience and is a New Zealander, as is Stephen LeFebvre, vice-president of sales and marketing for Asia-Pacific, who has a successful track record in nutraceutical and dietary supplement manufacturing and marketing. The new vice-president, sales and marketing, Paul Paslaski, was poached from a similar role at US-based Cargill Health, manufacturers of PureLo's only plant-based rival, Rebenia.

On the science side is Dr Garth Smith, a founding shareholder and former MAF/HortResearch scientist who began looking for the PureLo opportunity in China in 2003 and now lives in Guilin, where he works with Lan Fusheng, ceo and president of BioVittoria's key partner in China, BioGFS. Mr Lan is a highly decorated and connected scientist in China, recognised as "their national expert in luo han production".

The prospectus also makes it clear the forthcoming float, which must raise at least $8 million to proceed and is targeting no more than $20 million, is necessary for BioVittoria to continue trading.

"The validity of the going concern assumption on which the financial statements are prepared depends on the succesful conclusion of the proposed capital-raising, and the ongoing support of the banking institutions," the prospectus auditors, KPMG concluded.

The prospectus discloses that Biovittoria breached its banking convenants with the ANZ in the year to March 31, and continued to operate in breach pending a review by the bank "in early November".

"If the bank decided to withdraw its ongoing support then the Group may not be able to continue to operate as it would not be able to pay its creditors as they fall due," the document says.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Westpac: Sets Out Plan To Go Cheque-Free

Westpac NZ has announced details of its plan to phase out cheques, after signalling in May that it would be supporting a move to other forms of payment. Cheques will cease to be available as a means of payment after 25 June 2021. Westpac NZ General ... More>>


NZTA: Major New Zealand Upgrade Programme Projects Go To Tender

Two major New Zealand Upgrade Programme projects are beginning tenders for construction. The New Zealand Upgrade Programme is a $6.8 billion investment to get our cities moving, to save lives and boost productivity in growth areas. The first Auckland ... More>>

Reserve Bank: RBNZ Seeks To Preserve Benefits Of Cash

The Reserve Bank – Te Pūtea Matua is taking on a new role of steward of the cash system “to preserve the benefits of cash for all who need them”, Assistant Governor Christian Hawkesby told the Royal Numismatics Society of New Zealand annual conference ... More>>


Economy: Double-Dip Recession Next Year, But Housing Rolls On

New Zealand's economy is expected to slip back into recession early next year as delayed job losses, falling consumer spending, and the absence of international tourists bites into growth. More>>


Microsoft New Zealand: Microsoft Expands “Highway To A Hundred Unicorns” Initiative To Support Startups In Asia Pacific

New Zealand, 14 October 2020 – Today Microsoft for Startups launches the Highway to a Hundred Unicorns initiative in Asia Pacific to strengthen the region’s startup ecosystem. This follows the initiative’s success in India, where 56 startups were ... More>>

Fonterra: Farmers Taking Another Step Towards New Zealand’s Low Emissions Food Production

They’re hot off the press and intended to help take the heat out of climate change. Fonterra farmers are already among the world’s most sustainable producers of milk and now have an additional tool in their sustainability toolbox. Over the last few ... More>>


Courts: Businessman Eric Watson Sentenced To A Four-Month Jail Term

New Zealand businessman Eric Watson has been sentenced to a four-month jail term in the UK for contempt of court, TVNZ reports. More>>

OECD: Area Employment Rate Falls By 4.0 Percentage Points, To 64.6% In Second Quarter Of 2020

The OECD area employment rate – the share of the working-age population with jobs – fell by 4.0 percentage points, to 64.6%, in the second quarter of 2020, its lowest level since the fourth quarter of 2010. Across the OECD area, 560 million persons ... More>>

Spark: Turns On 5G In Auckland And Offers A Glimpse Into The Future Of Smart Cities

Spark turned on 5G in downtown Auckland today and has partnered with Auckland Transport (AT) to showcase some of the latest in IoT (Internet of Things) technology and demonstrate what the future could look like for Auckland’s CBD with the power of 5G. 5G is ... More>>

Stats NZ: Monthly Migration Remains Low

Since the border closed in late-March 2020, net migration has averaged about 300 a month, Stats NZ said today. In the five months from April to August 2020, overall net migration was provisionally estimated at 1,700. This was made up of a net gain ... More>>

University of Canterbury: Proglacial Lakes Are Accelerating Glacier Ice Loss

Lake Tasman, New Zealand | 2016 | Photo: Dr Jenna Sutherland Meltwater lakes that form at glacier margins cause ice to recede much further and faster compared to glaciers that terminate on land, according to a new study. But the effects of these glacial ... More>>


Dairy: Fonterra Sells China Farms

Fonterra has agreed to sell its China farms for a total of $555 million (RMB 2.5 billion*1), after successfully developing the farms alongside local partners. Inner Mongolia Natural Dairy Co., Ltd, a subsidiary of China Youran Dairy Group Limited ... More>>