Shanghai, Nov 2 - Biotech firm China Biotics Inc expects its net sales to grow around 40 percent in the 2007/2008 fiscal year, due to growing demand from China's increasingly wealthy and health-conscious consumers, its CEO said on Friday.
China Biotics, which makes food additives and nutrition supplements which contain probiotics -- bacteria said to boost the immune system as a substitute for antibiotics -- is also spending $30 million to expand production at its site in Shanghai, Chief Executive Song Jinan said.
"This market is growing remarkably fast -- in China especially, since people here are increasingly demanding a higher standard of living," Song told Reuters in an interview.
"About a decade ago, it was hard to do good business in this industry, but since then the technology has improved and consumers now have more of an awareness of probiotics," he added.
Established in 1999, China Biotics' products include bulk food additives that can be used in milk, candy, ice cream, yogurt, juice and animal feed, as well as nutrition supplement products that contain probiotics, including health drinks, protein powder and nutrition capsules.
The company is now racing to ramp up its production capacity to match rapidly growing demand. It posted a 40-percent jump in net sales to $30.6 million in its fiscal year ended March 31, 2007.
"Once our new production capacity is built, our growth will be a lot faster. But for this fiscal year, we should be able to maintain that rate of growth," Song said, referring to net sales growth.
The company, whose customers include Bright Dairy & Food Co , has 14 retail centres in eastern China and plans to open 40 more across northeastern China by next March.
It still makes most of its sales in mainland China, but the firm is in talks with potential parters in the United States, Canada and Germany to channel its sales overseas, Song said.
The quality of Chinese goods has come under international scrutiny following scandals involving products ranging from toothpaste and pet food to toys and fish.
Not to worry, said Song, since the rules governing China's probiotics sector are very strict.
"We probably have the largest number of licence approvals from the government for probiotic products in China," Song said.