Ann: ASSET: CVT: Comvita Further Secures Honey Su

• Release Date: 28/02/14 15:32
• Summary: ASSET: CVT: Comvita Further Secures Honey Supply
• Price Sensitive: No
• Download Document  5.98KB

					CVT
28/02/2014 13:32
ASSET

REL: 1332 HRS Comvita Limited

ASSET: CVT: Comvita Further Secures Honey Supply

Global natural health products company Comvita has acquired the apiary
business of Hawkes Bay Honey in Hastings, to strengthen its supply of Manuka
(Leptospermum) honey. Comvita has also successfully completed Phase 1 of
their Apiary Management System (AMS), a propriety tool that enables greater
control of the expanding apiary business network including full traceability
of honey supply right back to individual hives.

Comvita CEO Brett Hewlett said both the acquisition and the timing of the AMS
Phase 1 completion are key indicators of the scale Comvita is building in
honey supply.

"We're building our honey supply capacity towards our strategic objective to
own 50% of our own supply of honey. The primary advantage of ownership of
supply is the mitigation against continuously escalating costs of Manuka
honey charged at the 'farm gate'. Year-on-year cost increases of Manuka honey
have been the greatest contributor to the supressed and volatile reported
earnings for Comvita. We are evolving our business model so that we have much
greater control over volume, quality and traceability of honey we purchase."

Hawkes Bay Honey
"Hawkes Bay Honey has 3,000 beehives located throughout the Hawkes Bay region
and will provide Comvita with additional security of supply of Manuka honey
as well as becoming the sixth* regional branch for Comvita's wholly owned
apiary business.  We already operate apiaries in the key geographic regions
of Northland, Waikato, Gisborne/East Coast, Wairarapa and Whanganui."

"We are on target this year to have in excess of one third of our total honey
supplies from our 100% owned apiaries. The balance of our supply will come
from long-term contractual agreements and partnership arrangements, which we
value highly. Honey supply partnerships with Comvita involve a long term
supply contract as well as access to significant knowledge of Manuka plant
propagation. This is in addition to volume and value enhancing apiary
production methodologies which we have built up over nearly 40 years."

Mr Hewlett said Hawkes Bay Honey has been a valued supplier of high quality
Manuka honey to Comvita for more than six years. Current owner, Jonathan Wroe
will be employed by Comvita to manage Comvita's Hawkes Bay region apiary
operations. The acquisition purchase price is confidential.

"We're looking forward to meeting our new land owner partners and building a
strong and enduring relationship. We believe this apiary business has
significant potential to grow and expand in the region and will benefit from
Comvita's substantial resources in Manuka honey production."

Apiary Management System (AMS)
Mr Hewlett said, "Comvita's proprietary AMS has been developed to support the
operation and management of the apiary business and will allow us to further
advance our traceability system for honey production to world leading
standards."

"Our hive numbers have doubled in the last two years to 23,000 operating from
six regional branches employing 70 staff with the plan to grow to 30,000
hives in the next two years."

AMS will enable improvements to better hive management and provide support to
key areas of the operation.

Mr Hewlett said that Phase 1, Extraction Management, saw AMS deployed at the
Kerikeri, Waikato and Whanganui Extraction Plants and completed in time and
within budget for the 2013/14 harvest.

"Deployment included installation of specialised equipment, training and
standard operating procedures for all branches and the AMS Extraction
application is now actively being used by Comvita teams to view production
data, plant output and inventory."

"The apiary tracking phase will then be fully deployed in time for the 2014
spring build-up."

Honey season
Mr Hewlett also commented on the honey season, saying areas that have had
settled summer/spring conditions like Northland have had a reasonable honey
flow resulting in an average crop. Some areas in New Zealand however
experienced overall lower temperatures during January that resulted in lower
than average crops.

"It is climatic conditions that have the biggest impact on honey harvest.
There has been much media hype about the impact of the Varroa mite and colony
collapse but the apiary management practises adopted by Comvita mean that
these biological threats are not a major issue for us here in New Zealand.
There are more bees and beekeepers today in New Zealand than there have ever
been in our history and we have the ability to increase hive numbers quickly.
 Colony collapse as experienced in the USA and Europe over many years does
not exist in New Zealand and we don't regard it as a credible threat to our
business."

*Comvita acquired Kiwi Bee Medical Ltd in June 2008 and Waikato Honey
Products in November 2011. Kiwi Bee Wairarapa was established as an operating
unit in December 2011. Kiwi Bee Whanganui was acquired in October 2012 and
Kiwi Bee East Coast (Gisborne) was acquired in September 2013.

# Ends #

For further information:
Brett Hewlett, Comvita CEO, 021 740 160
Julie Chadwick, Comvita Communications Manager, 021 510 693

Background information
About Comvita (www.comvita.com)
Comvita is an international natural health and beauty company committed to
the development of innovative products, backed by credible scientific
research. We are the global leader in Manuka (leptospermum) honey and
fresh-picked Olive Leaf Extract, which are at the core of the Comvita product
range. We have approx. 30% of honey supply under our ownership with the
balance of supply from long term contractual and partnership arrangements.
Comvita's Olive Leaf Extract is grown, harvested, extracted and bottled at
the world's largest specialised olive leaf grove, with over 580,000 olive
trees. Comvita sells into more than 18 countries through a network of
wholesale and third-party outlets and online. We have offices in New Zealand,
Australia, Hong Kong, Japan, Taiwan, South Korea and the United Kingdom.
End CA:00247653 For:CVT    Type:ASSET      Time:2014-02-28 13:32:56