Fiji Kava inks deal to explore kava distribution opportunities in China

Fiji Kava ASX FIJ PMM Company China medicine pharmaceutical
Fiji Kava has signed a memorandum of understand with PMM Company for the potential future supply of kava to China’s pharmaceutical industry.

Health and wellness company Fiji Kava (ASX: FIJ) is proposing a partnership with Chinese pharmaceutical supplier PMM Company Limited to explore future opportunities to supply ‘noble kava’ extract and products to China.

Fiji Kava today announced it has signed a memorandum of understanding with PMM, headed by nutrition industry expert Charles (or Chi) Li who has a successful track record of bringing international products to China.

Fiji Kava chairman Dr Andrew Kelly said the proposed partnership reflects an important first step in establishing a footprint in one of the world’s largest vitamin and supplements markets.

“As we continue to focus on growing the availability of our noble kava, we cannot ignore that China’s $31 billion vitamin and supplements market represents a considerable opportunity for the company,” he said.

The signed MOU includes a 12-week period to establish the foundations for entering China and to assess distribution opportunities via existing networks.

Fiji Kava said a decision on any future commercial arrangements will be made at the conclusion of this trial period.

Chinese distribution expert

According to Fiji Kava, Chi Li has “comprehensive” experience in sales and business development in international food ingredient, sports nutrition and infant nutritional products in China.

He has been consulting for global nutritional business Beingmate Group since 2009 and acquired the Bright Beginnings brand from Perrigo, growing it into one of the leading American infant formula products in China.

Chi Li was also an exclusive partner and the chief executive officer for Bubs Australia (ASX: BUB)’s joint venture with Beingmate until last November.

“We are delighted to explore opportunities with Chi Li who has such a tremendous track record of success in building international products and ingredients to China,” Dr Kelly said.

Strong quarterly growth

Fiji Kava recently posted strong quarterly results including revenue reaching to a new high of $232,304 – up 33% from the December quarter and representing a massive 491% increase on the March 2019 quarter.

According to the company, this growth was driven by increased momentum from ingredients supply to Australian specialty healthcare supplier Pathway International, plus steady gains from other retail activities and distribution agreements.

“We’re buoyed by the rising trajectory in sales and anticipate this early momentum to continue as brand awareness grows and our products become more widely available across our retail and online channels,” Fiji Kava founder and chief executive officer Zane Yoshida said.

Fiji Kava confirmed its Noble Kava Extract capsules and Noble Sleep, Calm and Body capsules will be available in selected Coles supermarkets around Australia from June.

The company also continues to engage constructively with the Australian and Fijian governments to plan for the commercial importation pilot of kava in Australia by the end of 2020, and confirmed its supply chain of noble kava has not been impacted by COVID-19 or the recent cyclonic conditions in the South Pacific.

Fiji Kava shares were up 20% on the news to $0.072 by late morning trade.

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