05 Jul 2016, 08:30AM | GENERAL
Oceania Natural Limited (NXT: ONL) – Interim Update Announcement
Oceania Natural exploring ways to enter new markets and secure honey supply
New Asian countries and Joint Venture in China considered
AUCKLAND, New Zealand, 05 July 2016 - Premium food supplements company Oceania Natural Ltd (NXT: ONL) is currently pursuing a number of opportunities to expand its growth strategy and to mitigate the distributor and supplier risks outlined in the ONL Listing Document dated 31 March 2016.
The company believes these opportunities will assist the expansion of its distributor network within and beyond China, secure access to bulk Manuka Honey supply, and further develop its Noni fruit product range.
Beyond China: New Asian Markets identified
ONL has identified a potential new distribution partner in South Korea and is in discussions with a view to entering a trial distribution agreement. ONL expects the trial distribution arrangement to be finalised shortly and will update the market accordingly.
In addition, ONL has also identified opportunities in Taiwan, Japan and Singapore that it is continuing to investigate, with a trial order of Noni juice having been sent to Japan.
Review of China Distribution Network - Joint Venture considered
The company is reviewing strategies for expanding its Chinese distribution network beyond the Shandong, Guizhou province and Wuxi City and expects to complete this review, as well as advise the market of its proposed approach, in the next two weeks.
The review includes discussions with both strategic partners and potential investors on the subject of how best to establish new distribution structures and finance these opportunities. These discussions include considering a joint venture arrangement where ONL would maintain a majority and controlling share. ONL believes this approach to be of merit as it would allow the company to:
● finance rapid growth for the distribution network in China,
● avoid dilution to ONL shareholders (i.e. through direct ONL equity placements), and
● allow ONL to continue to manage and control the distribution network in new provinces.
Bulk Honey Supply
As securing access to adequate supplies of Manuka Honey is considered key to ONL’s growth strategy, the company is in discussions with New Zealand honey suppliers to explore opportunities for purchasing bulk honey volumes.
To finance these purchases, ONL will need to secure access to additional working capital. The company is investigating ways of securing debt finance to support these purchases. This includes reviewing its current banking arrangements and liaising with its advisors about possible sources of alternative debt finance.
Noni Juice Research
To increase the marketability of Noni juice and expand the development of its current product range, ONL will commission research which will further investigate the health benefits derived from Noni fruit. The research will include the analysis of the nutritional and functional compounds of Noni juice and the development of further products derived from Noni fruit. Negotiations are currently underway with a leading New Zealand University to conduct this research.
ONL CEO Walker Zhong, who recently returned from a three-week trip to China, South Korea and Hong Kong, to progress discussions with potential distribution partners, says: “Since listing 3 months ago, we have been working hard to identify potential distribution and secure supplier partners who will help us grow revenues within China and expand into new Asian countries.
“In order to augment revenue streams and further tap into the burgeoning demand for premium products using honey and other natural food sources like Noni fruit, Oceania Natural must lay this important groundwork now, to position us well for future growth.”
ENDS
For media enquiries please contact:
Julie Landry, Connect PR, julie@connecpr.co.nz or 021 895 098.
Authority for this announcement
Name of senior manager or director authorised to make this announcement Malcolm Lindeque
Contact phone number 021 464 392
Contact email address Malcolm@onlgroup.co.nz
Date of release 05 July 2016
Oceania Natural Limited’s shares can be traded on the NXT Market. Oceania Natural Limited is required to disclose information under the NXT Market Rules. Information about the NXT Market and the NXT company is available here www.nxt.co.nz.
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