Comvita announces strategic investment in Asia

Comvita announces strategic investment by key Asian partners

GPE, Comvita’s master agent in China, and Aju Pharm, Comvita’s distribution partner in South Korea, have both taken a strategic shareholding in Comvita Limited by way of a private placement of 500,000 shares each at $2.00 per share, with settlement immediately. Comvita will receive $2m in net cash proceeds from the placement.

Comvita’s Chairman Neil Craig stated, “We receive many expressions of interest from significant Asian parties who wish to invest in the Comvita business because of our long established reputation for premium quality health products from New Zealand. This strategic investment by GPE and Aju Pharm cements the relationship between the companies in a very meaningful way and ensures an alignment of our joint longer term interests in developing Comvita’s business in these two key markets. It also gives us the confidence to continue expanding our presence in the Chinese and Korean markets through greater investment in direct retail and other supporting infrastructure. This relationship is destined to deliver exceptional value over the longer term to all of Comvita’s shareholders.”

Comvita first started trading with GPE in China during 2004. Very quickly GPE has established a network of more than 300 Comvita retail stores and store-within-stores in more than 30 cities across mainland China. GPE also has a growing secondary distribution network selling Comvita products into premium food retailers and department stores. The stores are owned by GPE and Comvita supports their endeavours with product training, marketing support as well as retail store design using resources based at Comvita’s regional headquarters in Hong Kong. “We feel it is time to make a step-up in our involvement in supporting growth of sales to the vast and prospering Chinese market and this injection of new capital will allow us to go just that little bit faster”, said Comvita’s CEO, Brett Hewlett.

Comvita opened a new company office in Seoul, Korea at the beginning of September 2010. Comvita Korea Ltd is hosted by Comvita’s distribution partner Aju Pharm Ltd. Aju Pharm is a second generation family owned pharmaceutical business that has made moves recently into the natural products and nutraceuticals sector. Aju Pharm has an extensive sales network covering more than 1000 pharmacy stores in South Korea. The company will focus on distribution of Comvita’s product range to the pharmacy channel while Comvita’s Korean office will focus on establishing Comvita owned retail stores. Brett Hewlett stated, “We have recruited a great team of people to spearhead the opening of five new retail stores before Christmas that will be located within very premium department stores throughout Seoul. This direct branded retail strategy combined with Aju Pharm’s command of the pharmacy channel positions Comvita well and we are excited about the future prospects for business in the South Korean market.”

Comvita has been selling product to the Asian markets for more than 30 years and over that time has established itself as a very premium brand. The company entered into its first formal distribution agreement in Hong Kong more than 18 years ago. Progressively over the years Comvita has established its own local presence first with an office in Japan in 2002, Taiwan in 2006 and then in 2007 the company acquired its former Hong Kong distributor and established a regional headquarters which now employs over 100 people. Once the new stores in Korea are established Comvita will have more than 400 retail stores and stores-within-stores throughout the Asian region. The Asian countries collectively account for more than 30% of Comvita’s global sales.

ENDS

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