Wellness and Beauty Solutions (ASX:WNB) signs JV to scale up sanitiser production
ASX:WNB MCAP $11.01M
Jessica De Freitas Markets Reporter [email protected] 15 April 2020 13:26
- Wellness and Beauty Solutions (WNB) has signed an agreement with Piggott Investments and Glegra to form a joint venture company called MICRO 19
- This company is being established to produce and sell its namesake hand sanitiser range amid the coronavirus pandemic
- The MICRO19 products were first announced by WNB last month, which claims they're effective against 99.99 per cent of germs
- To fund the initial stages, Glegra will provide an initial debt facility of $330,000
- Company shares are up 31.8 per cent after today's news and shares are trading for 1.5 cents each
Wellness and Beauty Solutions (WNB) has signed an agreement with Piggott Investments and Glegra to form a joint venture company called MICRO 19.
The joint venture was primarily established to produce and sell MICRO19 hand sanitiser products. These parties have extensive experience in manufacturing, packaging, distribution and retail of personal care products.
"The company used established industry contacts to secure an ongoing supply of Ethanol for the manufacture of MICRO19 and now, through JVCo, is able to provide a continuous supply of both tubes and bottles of MICRO19 Hand Sanitiser," WNB Managing Director Christine Parkes said.
The MICRO19 hand sanitiser range was announced on
March 18 and is 100 per cent Australian owned and manufactured.
WNB announced the launch of these products last month in response to the growing demand for disinfectants and sanitisers amid the COVID-19 crisis. The cosmetics company even reported securing an opening order from a leading (but undisclosed) pharmacy retailer.
The range includes a 300ml hand sanitiser pump in peach/cucumber and lavender scents, 50ml hand sanitiser bottle in the same scents, a 300ml room and surface spray in an orange scent and a recently launched range of 100ml tube products.
WNB claims these products are effective against 99.99 per cent of germs.
"[The joint venture company] is also developing products that meet the World Health Organisation (WHO) standard grade sanitiser requirements. These requirements were detailed in the updated TGA Regulations published on 29 March 2020 to regulate the manufacturing of hand sanitisers for the period of COVID19," Christine said.
Under the agreement terms, WNB will be a 50 per cent owner of the joint venture company while Piggott Investments and Glegra will each hold a 25 per cent interest.
In return for providing management services to the joint venture, WNB will be entitled to a $125,000 quarterly management fee in the first quarter of operation and then $80,000 per quarter.
Glegra will provide an initial debt facility of $330,000 to fund the joint venture company.
"We believe this JV further demonstrates WNB's ability to identify a market gap in the beauty and wellness sector pivoting quickly to execute on a strategy to deliver value for our shareholders," Christine concluded.
