June 3 - The Directors of Montec International are pleased to report that the company continues to make progress in building its dairy products franchise in China. In the second half of calendar 2007, several important initiatives were undertaken to more firmly secure the company's position. These included the establishment of a wholly owned subsidiary that would take over responsibility for administration and marketing and two new products (children's yoghurt drink and flavoured ice cream) were launched. Since the beginning of 2008 further advances have been made and additional opportunities have emerged and are being actively pursued.
Targets Achieved on distribution
The company has achieved its initial distribution targets for the "Bei Bei" range of children’s yoghurt drinks ahead of the summer season with availability in over 1400 outlets in Bejing, 900 in Qingdao and 950 in Jinhua.
A flow through benefit has been increased outlet availability of "dairypure" UHT milk as it has been sold into new outlets in conjunction with the yoghurt drink. It is estimated that "dairypure' brand UHT milk is now available in over 4000 outlets in 4 cities. The marketing emphasis is now firmly on driving volume growth from the current outlet base.
Beijing Allied Faxi Foods (the ice cream subsidiary of Sanyuan) has begun distribution of 3 flavours of monunsaturated ice cream, jointly branded with their "Baxy" brand and "dairypure" with availability in 400 Beijing supermarkets. Allied Faxi is now targeting distribution to 200 supermarkets in Shanghai ahead of the summer season.
New marketing initiatives undertaken
Discussions have been initiated with Zhejiang Jinhua Jalo Dairy (Montec’s packer of children’s yoghurt drinks in Jinhua) regarding possible areas for future co-operation, including joint initiatives on new products in which Montec may provide product and technical assistance and/or a financial role in improving production capabilities and market growth. The opportunity for Montec is to leverage the production, marketing and distribution infrastructure of Zhejiang Jinhua Jalo Dairy to accelerate growth and to expand the product portfolio and geographic footprint.
Discussions are progressing with a leading manufacturer and marketer of infant formulas with a view to supplying them with a monounsaturated powder ex-Australia to market as a premium product throughout their distribution system across eastern China. In addition to further developing Montec’s commercial relations in China, it also extends the company’s relationships with dairy producers in Australia.
This is one of a number of discussions that are well advanced with other parties with regard to further product extensions and distribution opportunities. It is anticipated that these will be concluded over the next few months.
Puji Wealth Management – New major shareholder
The placement announced in February 2008 to Puji Wealth Management is nearing completion as foreign exchange processes in the transaction are finalised. The Directors of Montec look forward to welcoming Puji as a major shareholder and to working more closely with their management team. Puji is expected to become a valuable partner and play a pivotal role in these and other discussions with prospective business partners.
Demonstrable progress continues to be made and the Directors remain excited about the opportunities in China. China is a vast market with rapidly growing demand for dairy products but with many regional nuances. Accordingly, the key to long term success for Montec will be to continue to develop partnering relationships, expansion of the product portfolio and distribution channels.
ABOUT MONTEC INTERNATIONAL LIMITED (MTI)
Montec International Limited is an Australian company, listed on the Australian Stock Exchange and holds certain rights to the manufacture and marketing of monounsaturated, cholesterol-free dairy products. The Company’s current focus is on China, where it is building its range of white and flavoured milks under the registered trademarks "dairypure" and "Meng Tai", currently distributed through more than 2,700 outlets, predominantly in Beijing and Shanghai. Planned outlet growth, brand development and extensions into monounsaturated ice cream, yoghurts and other products will provide the base for company’s future growth.