Nutraceutical firm targets Chinese ‘window of opportunity’

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Related tags: Marketing, China

The tightening of safety rules in China and a ripe consumer market has prompted heavy investment in the country from a US-based producer of marine-biomass products.

HQ Sustainable Maritime Industries last week confirmed an injection of $11.5m into its Jiahua subsidiary in order to develop the “immediate window of opportunity”​ it has identified in the country.

According to the firm, a combination of “macro-regulatory and socio-economic trends”​ in China provide a fertile landscape for the growth of both its B2B and B2C operations, which are focused on the supply of fish by-products from tilapia and non-endangered shark. These include shark cartilage capsules and shark liver oil products.

Competitors down, consumers up

HQ said the Chinese market opportunity is driven by new safety legislation which “made it a criminal offence to manufacture or certify substandard products for direct or indirect human consumption. This led to the closure of almost one-third of the nutraceutical manufacturers in China”.

In addition, the firm believes the population demographics are currently strong for its business, with a key target for the company’s products being elderly consumers.

It notes “an aging China population, with an estimated 24 percent to be over the age of 65 by 2050, according to the World Health Organization. This will represent roughly 300 million people over the age of 65”.

Vertical integration

HQ said it has raised $11.5m in equity financing “to be fully utilized to develop this opportunity”.

The firm says its long-term goal is to “become the world leader in vertically integrated production, processing and raising of all natural tilapia products”.

“This includes the use of tilapia by-products to increase the range and variety of our marine bio and healthcare products, with a primary focus on increasing our own seafood products.”

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