Plant sterols company Forbes Medi-Tech said this week it has begun shipments under the recently announced agreement between its manufacturing joint venture, Phyto-Source, and a large multinational company.
Forbes did not reveal the customer and financial terms and conditions but said that based on customer forecasts, it is expecting the supply agreement,and others already in place, to generate total revenues of up to $40 million over two years.
Forbes Medi-Tech extracts plant sterols from woodpulping by-products to make its cholesterol-lowering food additive.
"The commencement of shipping and recognition of revenue from this contract represents a significant milestone for the company," said Charles Butt, president and CEO of Forbes Medi-Tech.
Manufacturing of the phytosterols for all supply contracts is conducted bythe Phyto-Source manufacturing facility in Pasadena, Texas, a50-50 joint venture between Forbes and Chusei (USA). Forbes said it expects to gain around 60 per cent of the total revenue under such supplyagreements. Approximately 800 tonnes of Phyto-Source's 1000 tonne annual production capacity has been secured by these contracts, it added.
Shares of the Vancouver-based company rose more than 19 per cent yesterday after the announcement, according to Reuters.