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March 2005
CHEMEQ UPDATE
Veterinary pharmaceutical company Chemeq Limited (Chemeq, ASX: CMQ) today provided
clarification of an investment research report which questioned Chemeq’s manufacturing
facility’s capacity to produce 40,000 litres of CHEMEQ® polymeric antimicrobial per annum.
Chemeq’s manufacturing facility has already demonstrated the capability to produce between
60,000 and 100,000 litres of finished product per annum.
Chemeq already has a contract to supply a South African customer with CHEMEQ® polymeric
antimicrobial. This contract is valued at approximately AU$1.5 million and was due for
shipment in the year ending 30 June 2005.
The South African buyer has indicated a willingness to accept delivery later than agreed in the
sale contract pending receipt of Chemeq’s unconditional Australian Pesticides and Veterinary
Medicines Authority (APVMA) license for its manufacturing facility.
Chemeq’s manufacturing facility is designed to manufacture 20,000 kg per annum of Active
Pharmaceutical Ingredient (API).
API is the key ingredient in Chemeq’s world-first drug designed to replace the use of antibiotics
in the treatment of intestinal bacterial diseases in feedstock animals. Approximately 1 kilogram
of API is formulated into 20 litres of finished product, CHEMEQ® polymeric antimicrobial.
Based on current output levels of between 15% – 25% of plant capacity, Chemeq is able to
produce 60,000 – 100,000 litres of finished product annually. Pending full APVMA licence for the
facility, current production output is being placed in inventory. After receipt of the full licence
the inventory will be released to the market.
Plant capacity will increase to 400,000 litres of finished product per annum once full plant
capacity is reached.
Chemeq’s plan for reaching full plant capacity has been supported by a recent independent
engineers report. The first stage in this plan currently underway is designed to overcome the
previously disclosed filtration problem. Work is focusing on analysis of alternative solutions
including improving the existing filtration technology and moving to other technologies.
Chemeq anticipates it will be in a position to provide a further update on these developments in
about a month.