New Zealand Coastal Seafoods (ASX: NZS) has entered into a strategic supply agreement with German nutraceuticals company Dr Behr GmbH for the sale of its green lip mussel powders and oils into the European market.
The initial one-year deal will see Dr Behr become the sole and exclusive distributor of the products to countries within the European Union excluding the UK (which formally left the EU in January with a transition period until year end).
Minimum order quantity revenues will be approximately $400,000 for the first 12 months.
The agreement will also allow NZCS to expand revenues as it develops further products including underia (seaweed), marine collagen and oyster powders; as well as nootropics and other cognitive enhancers.
The company will grant Dr Behr first right of refusal to purchase its new products as it seeks to distribute them into new and existing markets including China, Japan, Hong Kong, the US and Australia.
The supply agreement can be renewed for three additional terms of one year each, and one additional term of three years.
Established in 1976, Dr Behr is a certified manufacturer of dietary supplements, nutraceutical and pharmaceutical products, distributing a range of marine and plant-based products including mussel and mushroom powders and oyster extract to markets worldwide.
NZCS chief executive officer Andrew Peti said the agreement would cement the company’s position within the global nutraceuticals industry.
“This is a significant milestone for us, as we forge our way into the market and position ourselves as a leader in the industry,” he said.
“It is a strategic move for us as we seek to expand our distribution network by offering product lines developed for Dr Behr into Asia, the US, Japan, Korea and other regions.”
Mr Peti said the company is continuing discussions with other global nutraceutical and pharmaceutical distributors, with the aim of locking in new supply and purchase agreements to complement those signed earlier this year.
In March, NZCS entered into a $4.29 million purchase agreement with international wholesaler and exporter SuperMilkBaba (NZ) for the sale of a minimum 100 tonnes of frozen ling maw fish over a 12-month period.
The first order was dispatched to China and processed through New Zealand customs during COVID-19 restrictions in April.
In May, NZCS signed an additional purchase agreement with New Zealand-based retailer Good Health Product for the sale of a minimum 4000 kilograms of nutraceutical oyster powder over 12 months, with opportunities to expand order quantities to up to 10,000kg over the same period.
Nutraceutical oyster powder is a dietary product rich in taurine, zinc and glycogen and believed to be help with issues such as cardiovascular health, blood pressure, skincare, arthritis, and joint, tissue and muscle pain.