Bubs breaks into the US baby-formula market – here’s hoping a2 Milk and Fonterra can latch on to the opportunities

A   report  that  an Australian outfit,  the  aptly  named  Bubs company, is planning to ship at least 1.25m cans of its baby formula to the US to help ease a nationwide shortage saw a  spike  in  the  a2 Milk  company’s shareprice  on  Monday  this  week.

US  president  Joe  Biden announced  the  deal in  a tweet  at the  weekend, saying  the  company would  deliver 27.5m bottles, the  equivalent of the  1.25m  cans  reported  by  Bubs.

“We’re doing everything in our power to get more formula on shelves as soon as possible,” he said.

The  NZ  Herald  reported the  news  that  Bubs  had  found  a  way  to  enter  the notoriously  difficult  American market “was well received”  by dual-listed infant  formula  exporter  a2 Milk investors  who  bid the   stock up 10.2%.

The  Herald  explained  that both  Fonterra  and a2 Milk  have  also applied to  the  US Food  and  Drug Administration for  approval  to  supply infant  formula to the  nation.

Fisher & Paykel Healthcare’s $880m sales of hospital hardware over the past two years deserves NZ’s plaudits

New Zealand’s biggest company by  capitalisation  on the  NZX, Fisher & Paykel Healthcare which  sells  its  products in  120  countries, has  supplied $880 million of hospital hardware over the past two years.  That’s the equivalent of about 10 years’ hardware sales before COVID-19.

This  remarkable performance deserves  the  plaudits  of  all New  Zealanders.

And  as a  company  which spends nearly  10%  of  its revenue  on research it has  new products coming  on the market.

CEO Lewis  Gradon  (surely he  deserves a knighthood) says the growing body of evidence supporting the use of nasal high flow and  other respiratory therapies shows that its products have a clear role to play in improving care and outcomes beyond COVID-19 patients.

“We have a proven fifty-year track record of changing clinical practice and now we have the additional benefit of customers already having our hardware and clinical experience with its use.”

Investors are digesting My Food Bag’s performance data – but Stuff is still feeding off Simon Henry’s remarks about Nadia Lim

Stuff business writer John Anthony was still focused on businessman Simon Henry’s widely reported remarks about My Food Bag co-founder Nadia Lim, a day after the company posted its latest annual results.

His report on Saturday began with news that – according to its chief executive – My Food Bag’s contact centre had been “inundated” with thousands of messages of support for Nadia Lim after “rich lister” Simon Henry made “insulting” comments about her.

Anthony mentioned an earlier Stuff report that the meal kit company had reported a $20 million after tax profit for the year to March 30, up from $2.4m a year earlier.

He noted that this result came two weeks after Henry, the boss of chemical company DGL Group, criticised My Food Bag for including a photo of Lim in its prospectus.

Celebrity chef and a chemical company boss – investors choked on the headline outrage during media feeding frenzy

Following up on a daily flow of news about some corporate how’s-your-father that brought the heads of the DGL Group and My Food Bag into a series of articles last week, Point of Order initially was led astray by information on the NZX website.  The company which the NZX records as “DGL” happens to be Delegat Limited, which (its website says) is aiming to be a global Super Premium wine company.

Delegate has invested in state-of-the-art wineries and world class vineyards in the prime grape growing regions of New Zealand and Australia and focuses exclusively on making “the world’s most sought-after Super Premium wines and brands”.

My Food Bag describes itself as an online food delivery business and New Zealand’s longest- standing meal-kit provider, operating in the $37 billion New Zealand retail food sector.

So why aren’t they in bed together?

But no – the corporate contretemps to which we were drawn involves My Food Bag and a chemical company which, although it is named DGL, has been given the code letters DGC for NZX purposes

Having latched on to the DGL which was at the centre of the controversy, Point of Order  checked out the bizarre market consequences of the media’s urge to make a meal of its chief executive’s ill-considered choice of words.

Synlait is confident it is back on the path to pre-2021 profitability levels

ANZ  reports widespread autumn rain has devastated many arable and fruit crops, but has been welcomed by pastoral farmers.

Food commodities are in short supply globally.  New Zealand will  export less produce than normal this season as production of most  export commodities is impacted for varying reasons including delays with the processing of livestock and the impacts of labour shortages.

So it  was  something of  a  surprise,  but  a  welcome  one,  when Synlait Milk reported  its net profit (excluding the sale of an Auckland property) had risen 128% to $14.5m in the first half.

The  dairy  processing company said it was also on the way to reporting previous levels of profitability in the 2023 financial year after posting a $28.5m loss in 2021.

And  as  ANZ reported, the  wet weather in  some regions  will  not  have worried  dairy farmers.

Meridian gets thin pickings as aluminium prices soar but door is left open for future negotiations on powering the smelter

Meridian Energy issued  a  terse  statement earlier  this  month on the future of the Tiwai Point aluminium smelter.

This followed  speculation that   with  the price  of  aluminium soaring  to US$3000  a  tonne  (it  used  to vary  between US$1400 and US$1800)  the  smelter’s majority  owner, international  giant Rio Tinto, would  want to extend  its contract for  cheap  electricity   (some  say  the  cheapest  in the world)  beyond its current contract date of 2024.

The  price  of  aluminium  on  world  markets  is  now  just  on $US3300.

The Meridian statement on February 8 simply said:

“Meridian Energy notes today’s media coverage on the future of the Tiwai Point aluminium smelter. Meridian confirms it is not in discussions with the smelter’s owner, NZAS, about a new electricity contract. The existing contract between Meridian and NZAS ends on 31 December 2024.”

Govt invests $2m to lift its stake in Geo40 and encourage venture to extract lithium from geothermal brine

Economic  Development  Minister  Stuart  Nash  reckons  it’s a game-changer:   the  government  is putting  taxpayers’ money  into  a  company extracting  the  valuable   mineral  lithium  from geothermal  brine  at  Ohaaki near  Taupo.

The  government’s aim is  to help scale  up  the project to produce lithium which is in  strong  international  demand for electric vehicle (EV) batteries.. EVs are expected to account for more than half of new car sales in the northern hemisphere by 2030.

Overseas, traditional ways of mining lithium leave a heavy carbon footprint, Nash said.

“In contrast, the Geo40 programme involves new technology to recover lithium sustainably from geothermal brine, and return the water to the geothermal field. The brine is a watery residue containing mineral compounds, and is a by-product of geothermal electricity generation.

“If we can successfully build up Geo40’s green technology to commercial scale, New Zealand could become an international leader in technology for the sustainable supply of lithium, and help to build lasting action on climate change.  It could also help meet New Zealand’s 2050 carbon neutral target and create jobs to support the economic recovery.

“Expanding geothermal energy and advanced manufacturing opportunities in Taupō will be significant to diversify its local economy,” Nash  says.

Fisher and Paykel Healthcare puts pep back into the sharemarket

Fisher  and  Paykel  Healthcare startled  the  sharemarket  out  of  its  lethargy  this  week  when it  reported a  half-year profit  of  $221.8m  on revenue of  over $900m.  The company   again  dazzled  market analysts,  who  had  been expecting revenue  to  fall  after the  record  achieved  in the  previous  12 months, largely through the provision of  medical equipment for hospitals to combat  Covid.

The  Auckland-based  company has  become  the  flag-bearer  for the  hi-tech sector in NZ and   has  signalled  further  growth, announcing that  over the next five years it expects to invest $700m  in land and buildings. This includes a fifth building, completing its Auckland campus, and acquiring land for a second NZ campus.

Over the next five years the company expects to add an additional three manufacturing facilities located outside NZ, the first of which is currently under construction in Tijuana, Mexico.

What  sets F&P Healthcare apart from  most NZ firms  is its  investment in R&D which in this half year was 8% of revenue, or $75.7m.

The  half-year announcement  sent  investors piling  back  into the stock,  which  bounced  up 5%.

The  company’s market capitalisation is  creeping  back close  to  $20 billion.

Port of Tauranga handles near-record import surges but red tape is slowing progress with expansion plans

As New Zealand’s largest port, Port of Tauranga is  playing a vital  role in keeping cargo moving throughout the global disruption and local upheavals caused by the Covid-19 pandemic.  And  it  has  ambitious  plans, which  would  strengthen   its  key  place  in  NZ’s  transport  system.

Fortunately  for our export industries,  the  port  overcame the  effects  of  the pandemic’s impact on the international supply chain which  included extensive shipping delays, service cancellations, scarcity of supply and volume volatility.  This has led to congestion in the container terminal and at its MetroPort facility in Auckland.

The situation was at times exacerbated at times by operational challenges at Ports of Auckland, particularly in the first half of the financial year.

While  there  were 106 fewer container vessel visits between September 2020 and June 2021, the average cargo exchange per container vessel increased 21.7% due to the reduced vessel frequency and shippers maximising available capacity.

Investors see promising signs of recovery in infant formula sales in China

After  a  rough  ride  since  Covid-19  struck, the New Zealand economy  is  in   better   shape   than might  have been  predicted  at the  onset  of the  pandemic.  Yet labour  shortages,  an energy crisis  in Europe  and  China, and  massive  inflationary  pressures suggest  that  the  passage  ahead   will  be  anything  but  smooth.

With  the  government abandoning  the  elimination  strategy  and  moving  towards  living  with  endemic  Covid, the  country  is adjusting  to  the  prospect  of  a  new  normal.  But  without  any  sign of  the  number of  cases  of the Delta  variant  diminishing, restrictions  may  persist  for  longer  than  might  have been  imagined  just  weeks  ago.

It’s  a  blow  to  industries  looking  to  inflows  of  workers  to ease  labour  shortages, particularly  in the  rural  regions,  which  last  season  sustained  the  economy  with  the  production of  commodities  that  were  in  relatively  tight  supply  in  world markets,  fetching excellent  returns.