Nutritional products maker Wattle Health Australia (ASX: WHA) continues to add supply deals to its commercial repertoire with the news that it has finalised a 12-month supply agreement with Vasudevan and Sons Exim Private Limited (VSEP) in India for supply of WHA’s natural baby food range.
The initial deal was already made known back in January this year, with the final agreement now made public.
Under the agreement, VSEP has committed to buying minimum volumes of WHA’s natural baby food range representing revenue of approximately A$1.5 million over the next 12 months.
VSEP will initially distribute WHA’s natural baby food range in one state in India and will roll out to the other states shortly afterwards which will result in an “increase of supply requirements,” according to Wattle Health.
This agreement represents a healthy supplement to Wattle’s other supply deals in Asia and raises the chances of continued and repeat sales volumes within rapidly growing markets.
According to Wattle, working with VSEP will help expand its product portfolio and distribution network in both domestic and international markets – which therefore reduces the company’s risk profile as well as its reliance on products and jurisdictions.
VSEP also opens the door for WHA to compete in one of the world’s fastest-growing economies and most populated countries where almost half the population is under the age of 25 and its annual birth rate is much higher than the entire population of Australia.
Late last month, Wattle Health agreed on a similar deal to supply its cow infant formula range to China via Shandong Weihai Port International.
At the time, the two companies announced a non-exclusive term sheet which sees Shandong committing to progressively escalating order volumes for the next three years.
Shandong has agreed to buy a minimum of A$6.6 million in the first 12 months, then A$11.5 million in year two and around A$16.5 million in the final year.
“This agreement with Vasudevan and Sons is an important milestone for the company as it cements our presence in one of the world’s largest and most lucrative markets. WHA now confidently look to grow our product portfolio in the Indian market to take further advantage of the opportunities India represents,” said Lazarus Karasavvidis, executive chairman of Wattle Health Australia.