On Monday, The Food Revolution Group Limited (ASX: FOD) came forward to present its quarterly overview for the period ended 31st December 2018. It has been a significant quarter for the company making an entry into Chinese markets.
During the quarter, the company secured the first order from strategic partner Careline for physical distribution of its product in China. The order comes after the China Inspection and Quarantine (CIQ) had granted certification approval for two of FOD’s juice products: Orange Juice with pulp and pulp-free.
Following the $20 million distribution agreement between FOD and Careline, announced in 2018, Careline purchased a 20-foot container of Fruit Farm Orange Juice for distribution through the founder of careline and FOD Chairman Dr. Li’s 10,000 strong direct Daigou network.
The Food Revolution Group also inked a juice supply contract with JJ Global Fine Foods to supply its CIQ approved Fruit Farm juice products through mainland China. Sample stock of company’s Fruit Farm Orange Juice has already been shipped to JJ Global which will reportedly be followed by distribution of FOD’s products across China and to customers such as high-end hotel chains including the Marriott Group, Peninsula, Mandarin Oriental, Hyatt, Shangri La, and other supermarket giants.
FOD also inked a Memorandum of Understanding (MOU) with the world’s largest oil, refining, gas, and petrochemical conglomerate, China Petroleum & Chemical Corporation generally known as Sinopec. Currently. The samples of FOD’s canola are under review by Sinopec. Moreover, after obtaining CIQ approval, the company expects to distribute its oil products China-wide in early 2019 and across Sinopec’s 35,000+ petrol and convenience outlets in China.
The quarter also saw FOD securing supply contract with one of Australia’s top retailers, Aldi, for Apple Mango Juice and completing tranche 2 of $20.25 million strategic investment.
On the front of skincare and health products, the company has upgraded its Mill Park processing facility allowing for improved financial metrics, increased volume and product diversification to satisfy high demand from Chinese customers. Upgrade will enable FOD to enter the fast-growing food supplement and health and beauty aid markets and expand FOD’s export range to meet Chinese demand.
With respect to management changes, the company announced the appointment of the founder of Careline Dr. Norman Li as Executive Chairman of FOD during November who is incentivized to grow the company’s sales to approximately $500 million within five years. The report read that Dr. Li has introduced many new partners and distributors to the company, building its presence across China.
Further, John Florey promoted to Chief Executive Officer from Chief Operating Officer on the exit of Bill Nikolovski who steeped as Managing Director and CEO for health reasons.
With this update, FOD stock price edged up by around 1% in mid-day trade, before closing flat at $0.140 on 4 February 2019. The stock price last traded at a PE of 22.950x with a market capitalization of $69.92 million. FOD has gone up by 233.33% over the past 12 months and 33.33% over the past three months.
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