Falling dollar and Capex investments boosting PharmaZen

Falling dollar and Capex investments boosting PharmaZen

Having resolutely invested in new facilities and plant during tough times, and backed by a falling dollar, biological company PharmaZen is starting to reap rewards for its “long game” strategy.

In the six months to June, 2015, it had a half year profit of $230,000 (after interest and depreciation) on turnover of $3.45m compared with a $60,000 loss for the same period last year (turnover $3.3m). Shares in PharmaZen are traded through the Unlisted securities trading platform.

Craig McIntosh, PharmaZen’s Chief Executive, said that 12 months ago the US dollar was trading at about 88c and now it is around 66c. For a company like ours that exports 80% of its product, that makes a huge difference.

“For example, we have just completed a $US100,000 order to the United States, almost identical to a year ago. The difference is that our bottom line is $33,000 better off now compared with 12 months ago. That is the impact the falling dollar is having not just on our business but on many others,” he said.

PharmaZen has just finished commissioning a new 1000 kg freeze dryer which is 70% larger than the current dryers 600kg dryers used. This unit is specifically designed for fruit and vegetable products with an integrated loading system which allows material to be loaded and unloaded in a third of the time of a traditional dryer.

“This new facility has considerably increased both our capacity and efficiency. We are also looking at a couple of other opportunities in this area, which could mean we will need to further extend the new plants.

“The freeze dryer is only part of the story. Last year we installed a new vacuum dryer which increased our capacity in the StimuCal product line by 50% and our next project will be to complete the design, build and installation of a new solvent extraction plant which will create a new business altogether for us.

“In total we will have invested over $5 million on these projects. Our board had the foresight to see through the difficult times and the tough trading conditions imposed by the high dollar, and we are now reaping the rewards,” he said.

PharmaZen’s trading division, Waitaki Biosciences, manufactures a collection of freeze and vacuum dried powder products extracted from animal and marine sources.

“The other areas of the business are going well. For example, the popularity of home-cooked bone broth, as championed internationally by some celebrity chefs, is an example of a worldwide trend back to the kind of natural ingredients which we produce.

‘Our range includes animal bone products, bovine and marine collagens, greenshell mussel powder, shark cartilage powder, natural Calcium powder, ChondroitinSulphate, and a full range of specialist glandular products . The products are used by other companies as an ingredient for dietary health supplements, predominantly in the areas of bone health, joint health, immune and digestive support as well as hair care and cosmetic applications.

“The world focus on natural products is definitely a help to our business,” he said.

ENDS

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