Hofseth BioCare ASA April 2014

Transcription

1 Hofseth BioCare ASA April 214

2 From waste to value Optimal locations makes it possible to deliver the freshest salmon products there is using the whole fish With our traceability system and cooperation with our main suppliers, we are currently able to link the production process from fish eggs to final products Hofseth buys premium quality salmon from a few selcted producers Hofseth processing plants makes high quality salmon products Off-cuts are iced emediately and transported < 4 hous at 2 deg Celcius 1 % 67 % 33 % HBC processes the off-cuts into premium products for human nutrition Atlantic Salmon (Salmo Salar) is raised in deep clear water fjords PORTIONS HOT- SMOKED FILLETS COLD- SMOKED HEADS BACKBONE SKIN CUTS & TRIM CAPSULES PROTEIN SALMON OIL CALCIUM Sustainability Sustainability is the capacity to endure. In ecology the word describes how biological systems remain diverse and productive over time. Sustainable seafood is seafood from either fished or farmed sources that can maintain or increase production in the future without jeopardizing the ecosystems from which it was acquired. For us it also means that no parts of our precious Norwegian Atlantic Salmon goes to waste.

3 Converting the whole salmon into food for human consumption Fillets are used as a delicious food Offcuts are the raw material used by HBC to produce premium biomarine ingredients for human applications Omega-3 free of contaminants & containing total lipid biofactors Protein that is clean, concentrated & easily digestible with unique bioefficacy Natural Calcium which is more bioavailable and increases bone density 3

4 HBC premium products and market approach Salmon oil Among the purest fish oils in the market Calcium Natural levels of EPA and DPA Free of contaminants, with natural salmon taste and odour Science that supports effects of lowering oxidized LDL No burps due to low oxidation Sold as extra virgin oil, compared to standard omega 3 oil which derives from oxidized bulk fish oil Protein Highly digestible Free of contaminants and high in essential amino acids Amino-acid profile complements whey protein Studies indicating that SPH can play an important role in reducing development of obesity Pending patent (PCT) application on SPH s effect on iron uptake HBC Market approach Marine Calcium with a calcium-to-phosphorous ratio similar to the human skeleton Useful in nutraceutical products NIFES study showed that absorption rate of marine calcium was significantly higher than other products on the market Opportunity to differentiate from the commoditized nonorganic sources 4

5 Sustainability & traceability is an attractive market proposition in itself Sustainability The HBC process ensures optimal use of natural resources Applying salmon offcuts (head, back and tail), normally waste or animal feed, as basis for production of superior quality oil for human consumption Traceability HBC s vertical integration gives unparalleled safety All raw material suppliers under regular audits Every single batch of oil can be traced right back to its source The filet line The fish farm The batch of fry The batch of roe Facilitates extremely detailed procedure control to prevent failures

6 State of the art facilities with key access to raw material Production facility with regulatory FDA approval, GMP+, Kosher and applied HACCP codex alimentarius practices, including Friend of the Sea Annual processing capacity of 2, tons raw material 2 batches/day (of 3,kg/batch) of raw material Long term agreements for raw material supply with Hofseth International AS and 4 other filet producers Hydrolysis plant at Midsund Total investments of NOK 45 million Implemented critical adjustments in 213 to enhance quality and yield. Further improvements to be done in 214 for increased capacity and filtered proteins Spraydrying plant at Berkåk Currently operating 24/7 Production volumes per year: Salmon Oil: 35 tons Salmon Protein: 16 tons Salmon Calcium: 6 tons

7 Recent headlights Sales and launch activities in several markets Increased financing facility to MNOK 65 Elected new Board of Directors Salmon oil patent granted in Singapore Received ethics committee approval to run a second SPH II clinical trial Positive EBITDA for the first time in Q4 Completed lab tests of new mixing technology and enzymes indicating more than a doubling of current production capacity Full-scale test production completed at Midsund plant in March 214 verifying the positive results from the lab tests 7

8 Market development The two current commercialized products ProGo and OmeGo took lead in the market activities this quarter, but interest for our CalGo also increased in the quarter Discussions in Q4 with both Asian (Japan, China, Indonesia), European (Germany, Switzerland, France) and American prospect customers HBC stopped selling products to animal feed and focus on selling to human and pet nutrition Large retail chains have been very interested in the alternative Hofseth BioCare can offer and the pure and natural salmon oil High organoleptic score on proteins in Q3 and Q4 resulted in several prospect customers started test blends with ProGo High interest on Calcium 8

9 Production update Raw material processed (MT) Q1 Q2 Q3 Q Accummulated HBC processed 1,45 tons of raw material during 1Q 214 compared to 1,211 tons in Q1 213 In January the Company installed a new centrifuge at Midsund, resulting in a 3 week production halt during the installation period Factory now operating as planned with stable yields and producing in accordance with human specifications A new long-term raw material contract was signed in December to secure volume, quality and pricing for the next four years Full-scale test of new mixing technology and enzymes showing a total process capacity of about 5, tons compared to previous 2, tons capacity Production in March at an annual run-rate of 14,2 tons 9

10 Salmon oil production Finished Salmon oil (MT) During 1Q 214 HBC produced 233 tons of salmon oil compared to 195 tons in 1Q 213 Salmon oil stored in storage tanks and filled into barrels for future shipments Q1 Q2 Q3 Q Accummulated 213 1

11 Salmon protein production Finished Soluble protein (MT) During 1Q 214 HBC produced 54 tons of soluble proteins (SPH) compared to 26 tons in 1Q 213 New proprietary enzyme mix implemented in Q1 for improved organoleptic profiles and future volume increase Technical specifications on protein improved throughout Q4 and Q1 2 Q1 Q2 Q3 Q Accummulated All production batches in human specifications 11

12 Marine calcium production Finished Calcium (MT) During 1Q 214 HBC produced 42 tons of calcium compared to 23 tons in 1Q 213 After new filter technology installed in 213, the bone separation process is as designed Still minor adjustments to drying and milling process to be done in 214 Currently 29 tons in storage for future sales Q1 Q2 Q3 Q Accummulated

13 R&D Recently published an OmeGo capsule study showing the intrinsic value in our salmon oil over other oils for cardiovascular health Completed several pilot trials with new enzymes and new mixer for improved volumes, quality and cost HBC has received ethics committee approval to run a second SPH II clinical trial which is planned for Q2 214 We will be measuring RBC for energy and improving anemia, weight loss and more 13

14 Ongoing project: SPH in the Fermentation market Microbial growth media is in increasing demand for use in the biochemical fermentation industry and HBC Protein properties are an excellent source for such production Peptones, which are a mix of water-soluble non-heat coagulating proteins and peptides are a primary source of nitrogen for growth media and stimulate higher growth rates in the fermentation industry Testing completed on standard fermentation microbes on E.Coli, B. subtilis, S. cerevisiae, A. niger with excellent results Planned ultrafiltration system at Midsund nessesary for further project development Pre-filtered SPH samples approved for growth rates at Kerry Bioscience New laboratory ultra filtered samples have been sent to Biocon for transparency and growth rate testing - expect result 3Q

15 Outlook The outlook for 214 and onwards is very attractive as HBC is entering the commercialisation phase, but the Company is still in a development phase before it can take advantage of the market potential A strong growing customer prospect list after sales activities needs attention and focus Increasing focus on building internal sales organization Main focus going forward: Secure long-term global contracts on all products Building lean and effective business model Continue to secure stable raw material supply Take advantage of the production method which increases production capacity Commercialize on findings in our clinical trials 15