Zila continues expansion with Korea, Taiwan move

By Stephen Daniells

- Last updated on GMT

Related tags Ester-c Ascorbic acid

Zila Nutraceuticals are continuing their expansion into south east
Asia with a new agreement with Lohaspia to distribute its Ester-C
advanced vitamin C ingredient in Taiwan and Korea.

Both countries are in the top five for vitamin markets outside of the US, and the move comes only months after Zila signed a distribution agreement with Asahi Godo in Japan, said to be the world's second biggest market after the United States with sales of US$30 billion in 2004, according to consulting firm Global Nutrition Group.

"The introduction of Ester-C into Korea and Taiwan represents significant progress in the execution of Zila Nutraceutical's aggressive international growth plan. We expect Lohapsia to quickly become one of our top customers,"​ said Zila's CEO and president, Douglas Burkett.

Rick Seo, CEO of Lohapsia said: "We feel very confident that we can make Ester-C the number one branded ingredient in the Korean and Taiwanese supplement market."

Zila expects strong sales on the international front to restore it to its growth trajectory before the fiscal year is out, with domestic US sales of Ester-C declining; net revenues fell by 15 percent in Q1 2006.

Net revenues from both domestic and US activities were $7.41 million, and the unit's gross profit for the three months also fell from 68 to 62 percent. The company said the drop was the result of increased sales discounts and start-up costs for its newest Ester-C product.

While factors affecting sales for the company's largest customers had a knock-on effect on Zila's own domestic sales of Ester-C, CFO Andrew Stevens told NutraIngredients-USA.com that international sales were actually up around 20 percent on the prior year period.

International markets account for around 15 percent of the unit's overall sales.

Ester-C is produced by mixing ascorbic acid and calcium carbonate to create a pH neutral form of vitamin C, which helps prevent the stomach disruption that can occur when consumers take large doses of the vitamin in its natural form to help ward off colds.

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