The company said the initial deal had been brokered when market conditions were more favourable, but now says its cash reserves are sufficient to finance its business plans.
The Canadian krill leader announced the tie-in on May 4.
"We have sufficient liquidity on hand, close to $3m, along with sustainable positive nutraceutical operational results, to conduct our strategic business plan in both nutraceutical and pharmaceutical segments,” said André Godin, Neptune’s vice president of Administration and Finance.
“Moreover, business partnerships should translate into additional support for further strategic development projects. Business progressed well during the first quarter ended May 31, 2010 and we believe revenues should again exceed $4m for a second quarter in a row."
Changing krill market dynamics
Neptune president and chief executive officer, Henri Harland, told NutraIngredients-USA.com recently that improvements in krill harvesting and processing methods were putting downward pressure on pricing and margins.
“More and more this segment will see competition on price – which hasn’t always been the case,” he said. “This is significant because the benefits are being redistributed to the customer. We are getting closer to the fish oil price.”
In regard to the harvesting sustainability concerns that have caused the Whole Foods retail chain in the US to temporarily withdraw krill products from their shelves while it scrutinizes the allegations for and against the fishery, Harland said the industry had to, “be very careful of how we are perceived”.
“The problem is that the perception can be a lot worse than the reality,” he observed. “Of course we are concerned by this and it may be that we as an industry may need a new communications plan.”
He said any acrimony that exists between Neptune and the next largest player, Aker BioMarine, should not be held up as a reason to prevent such industry-wide commuications.
Krill oil is rich in omega-3, phospholipids and antioxidants, is derived from the planktonic family of crustacean.