Neptune: ‘Krill oil is the fastest growing ingredient in the omega-3 market’
Vice-president global sales Michel Timperio said bosses expected to post a 40-45% surge in revenues to $6m-6.2m in the three months to May 31 driven by growing demand from the dietary supplements trade.
He added: “Krill oil is the fastest growing ingredient in the whole omega-3 market, which is great news as it reflects greater awareness from the consumers.
“The krill industry as a whole is vibrant, delivering double digit growth.
“Neptune's NKO [Neptune Krill Oil]… is gaining momentum worldwide in Asia, Oceania as well as Europe, while continuing great progression in the US mass market where Neptune's products, while dominating the health store channel, can now be found in large retail chains.”
Asian expansion plans
Speaking in a conference call with investors last week, Neptune chief executive Henri Harland said a new 300,000kg/year factory that will manufacture Neptune’s krill oil products in China is expected to be fully operational by the end of 2014 or early 2015.
Under a deal announced last September to create a 50:50 joint venture (JV) between Neptune and Shanghai KaiChuang Deep Sea Fisheries Co (SKFC) called Neptune-SKFC Biotechnology, SKFC will supply all the raw material and Neptune will provide a license to the JV giving it the rights to use Neptune’s production technology in return for an upfront payment plus ongoing royalty payments.
Publicly listed SKFC, which is 43% owned by a government-owned fishing conglomerate, has a large fleet of vessels for krill harvesting in the Antarctic Ocean, which will secure supply to Neptune-SKFC Biotechnology as well as Neptune, said Harland.
Patent protection
As for patents, Harland said he was confident that recently-granted US patent #8,030,348, which is being re-examined by the US Patent and Trademark Office following a request by rival Aker BioMarine, would be upheld.
He also stressed that it remained “valid and enforceable” during the re-examination process.
Production capacity increase
Finally, expansion projects at its facility in Sherbrooke, Québec that will see production grow from 150,000kg/year today to almost 500,000kg in 2014 would also improve productivity, he said.
At this point the plant would be able to support around $80m in sales, he said.
Q4, 2012 results
Neptune posted a 31% surge in sales to $5.36m in its nutraceutical business in the final quarter of fiscal 2012, and a 15% rise in sales in this division over the full year.
Net profits in the division were $1.38m, compared with a net loss of $985,000 for the same period last year.
For the full year, nutraceuticals revenues were up 15% to $19.11m, while net income more than doubled from $1.01m to $2.38m.
Consolidated revenues - which include figures from the Acasti Pharma and NeuroBiopharm businesses – were up 15% to $19.12m while net losses increased to $4.59m compared with a $1.69m net loss for fiscal 2011.
