30 March 2007

NZX listed natural healthcare product company Comvita Limited has acquired its Hong Kong distribution partner, GreenLife Limited.

The move, which is subject to final due diligence and shareholder approval,
is expected to have a positive impact on the company’s gross margins and Comvita’s 2007 earnings per share. 

The acquisition of GreenLife, which will take effect from 1 May 2007, is for NZ$9.03 million involving a mixture cash and the balance in Comvita shares.  28% of the total purchase price will be held in trust for three years pending meeting agreed earn-out targets. Further, the acquisition will see GreenLife’s founders, the Butt family and related parties, represent a 9.5% shareholding in Comvita.  Mr Ron Butt, formerly General Manager of Green Life, will become Comvita’s General Manager for the Asia region.

Comvita’s Chairman Neil Craig said the acquisition would enhance Comvita’s growth into neighbouring China, and other Asian markets.

“We have pursued a strategy of capturing more value by securing a greater share of the retail dollar. This involves us getting closer to our end consumers. GreenLife's proven track record and its distribution capability, retail stores, network of sales staff and in-store promoters give us the ability to do just that and launch new products into the Asian market quickly and efficiently,”  said Neil Craig.
Comvita’s CEO Brett Hewlett is positive about the company’s potential reach from its new hub location. “"We've been working on this acquisition for some time. We see it as a key step in our development in the Asian region. Hong Kong is a vibrant economy with a population approaching 7 million. It’s the gateway to the Greater China Region and within 4 hours flight from China's four major cities and 5 hours' flight from half of the world's population.”
GreenLife was established in 1992 by Mr KC Butt. Passionate about natural health, Mr Butt was a pioneer in the organic food industry in Hong Kong and is a noted philanthropist. He and his family lived in New Zealand and set up the company in Hong Kong solely for the distribution of Comvita products and a selection of other high quality natural and organic products.  Today 90% of GreenLife’s product portfolio comes from Comvita, and the company has an annual turnover of NZ$7.6 million. GreenLife experienced 28% growth in 2006.
 
Mr KC Butt’s son Ron attended university in New Zealand, went on to have a 10-year career with ExxonMobil around the Asia Pacific region, and has over the past two years, championed Comvita’s premium Nature of New Zealand brand positioning in the Hong Kong market. Under his management, GreenLife successfully developed a Comvita store-in-store concept that has underpinned recent growth in retail sales.
Brett Hewlett is delighted that as well as adding significantly to Comvita's capabilities in the Asian region, the two companies are aligned in their core values of health and wellbeing, and both pursue sustainable business practices and social responsibility.
The acquisition is in line with Comvita’s strategy of developing regional hubs to provide marketing and distribution capabilities in-market and to enable expansion into neighbouring regions. In a similar move in late 2005 Comvita acquired UK company New Zealand Natural Food Co, which has resulted in a strong lift in sales and given Comvita a platform to launch into the European Union later this year.

Ends

New Zealand-based natural healthcare company Comvita has launched the latest product in their ever-popular anti-oxidant range, Bilberry 7500.

Bilberries have long been revered for their natural support of eye health and wider health benefits, and have been used in Europe for centuries. From March 1, New Zealanders will have the opportunity to see the benefits of this age-old herbal ingredient for themselves.

The new bilberry product from Comvita contains the active compounds in bilberries known as anthocyanosides. These are a group of blue and purple pigments found to help support night vision and be of benefit with other eye problems.

Dr Caroline Davy, education manager for Comvita, says bilberries can be especially beneficial for New Zealand’s ageing population or for those who rely heavily on the visual process for their careers.

“Optimal eye health is largely dependent on a rich supply of nutrients from the blood. Bilberry extracts maintain eye health by supporting the delivery of blood to the eye, so those who rely on their eyes for extended periods like students, computer terminal operators, night drivers and airline pilots, are likely to find bilberries especially beneficial.”

Practitioners have also used bilberries as a supplementary product for maintaining overall eye health.

Comvita is supporting the launch of this new product with an integrated PR and marketing programme to inform consumers, both here and overseas, about the benefits of bilberry.

Comvita Bilberry 7500 (RRP$39.95) contains 60 vegetable capsules per pack and will be available through pharmacies and health stores.

Other products in the Anti-Oxidant range include Comvita Propolis & Blackcurrant tablets, Selenium ACE and Selenium tablets.
 
TAPS approval: NA1879

 

December 1, 2006

Winning its category at the New Zealand Exporter of the Year Award ceremony has been the perfect end to a very successful year for Comvita.

This year, at the 40th Annual New Zealand Trade and Enterprise Awards, Comvita won the Agritech, Life Sciences and Biotechnology category.

Nineteen companies from throughout New Zealand were in the hunt for the six category awards and overall top export prize – they included companies such as 42 Below, Healtheries, Skellerup Industries, Phil and Ted’s, Provenco, Pacific Forest Products and Opus International Consultants.

The awards are the most prestigious recognition that can be given to a New Zealand exporter. Earlier this year Comvita won the People’s Choice and the TrailBlazer Awards at the national Westpac SBN Sustainable Business Awards.

Comvita’s General Manager of Sales and Marketing Scott Coulter says it is an honour to receive the award given the illustrious company they were in as finalists.

“New Zealand exporters are getting smarter about how they are attacking world markets. You can see that in the work and strategies of this group of finalists.”

He says it has been a big year for Comvita with sixty-five percent of sales now generated offshore. He expects a growing proportion of planned future growth will be derived through exporting.

Established in the Bay of Plenty in 1975, Comvita has undergone major changes in the past three years as it follows an ambitious strategy to move from being a trader to an international marketer, taking control over how and where its products are sold, positioned and priced, rather than working through distributors.

“Our strategy is driven by a desire to get closer to our customers so that we understand what they want,” says Coulter. “We’ve now taken control in most of our key export markets and have proven we can grow the market more quickly than a distributor.”

He says the company is experiencing accelerated growth in all of its offshore markets due in part to the increased knowledge they have from being inmarket.

Comvita’s Manuka honey and natural health and wellness products are targeted at the premium end of the market and are designed to meet the diverse requirements of both the Asian and Western health segments.

During recent years, Comvita started broadening its product range, reducing its reliance on traditional bee products and developing other innovative New Zealand-sourced natural health and wellbeing products, such as colostrum, Echinacea, kiwifruit and olive leaf.

Coulter says it is an important signal that the category they entered this year was Biotechnology as opposed to its previous category win in Food and Beverage.

“We will get the commercial edge in the future through technology, innovation and intellectual property leveraged by our brand strength,” he says.

He points to Comvita’s push into the woundcare market. He says the benefits of many years of research and product development will lead to woundcare products being a key export driver for the company from 2007 on.

A 25 percent jump in exports meant for the first time Comvita’s international sales exceeded New Zealand sales. Key export markets are Australia, Hong Kong, Japan, China and the UK.

China is the fastest growing market which increased by 173 percent last year, but export growth occurred across all Comvita’s export markets in virtually all product categories.

To ensure its capability keeps pace with expansion, Comvita has invested heavily in its supply chain and is developing a new two and a half million dollar warehouse in Te Puke.

“Our strategy is very much about investing and growing our regional hubs which provide a stepping stone into surrounding markets. For example our UK hub is our base for entry into the EU,” explains Mr Coulter.

A publicly listed company, Comvita has 120 staff in New Zealand and offshore and has recruited strongly over the last 12 months to support its growth plans.

The company moved from the secondary board to the main board of the New Zealand Stock Exchange in October this year.

Coulter says Comvita is growing very much in line with its strategy.

“That’s quite often the hardest thing for companies to do. There’s an enormous amount of opportunity available to companies like ours and it’s simply not possible to follow all options. By having a tight strategic framework we have a guide for what we should and shouldn’t spend our time on. Otherwise, one could waste an enormous amount of resource and energy.”

Comvita Chief Executive Brett Hewlett who is involved in a board meeting with Derma Sciences, the company’s medical partner in the US, says Comvita is pleased and humbled by the award.

“There is an increasing understanding by consumers and medical practitioners around the world about UMF Manuka honey’s antibacterial properties that give it the ability to support the immune system, digestive health and natural wound healing.”