The project will include the purchase of manufacturing equipment and R&D devices, on the recently acquired 16.5-acre parcel of land in Zhaoqing High Technology Industry Development Zone. In addition, the company says it will use the financing to fulfill current contracts or orders from its customers as well as to assist in securing contracts that are presently under negotiation.
Botaniex's future plant will combine two types of extraction technologies - traditional solvent extraction and super-critical fluid extraction (SCFE).
The company claims that this is a unique manufacturing combination that will provide a significant competitive advantage in the $19 billion global natural products industry. The plant will have an annual capacity of 200 metric tonnes of powdered extracts and 40 metric tonnes of essential oils; generating worldwide sales of approximately $7,000,000 per annum.
The company says that the completion of the plant will help make it a key player in the botanical/herbal extracts industry, enabling it to compete for and secure large orders from multi-national companies involved in a host of industries, including both dietary supplements and cosmetics.
Botaniex CEO Melson Liao said: "This funding will allow us to proceed with the construction of our plant as scheduled and to meet the market demand for our products. It will not only fund our organic or internal growth but also put us in a stronger position to pursue our merger and acquisition growth strategy. In fact, we are now in negotiations with two China-based companies - one is a pharmaceutical firm and the other is in the herbal extracts industry. Further details will be disclosed to shareholders once a letter of intent is signed with either firm."
Botaniex supplies herbal and botanical extracts worldwide to manufacturers of dietary supplements, health foods, functional beverage, pharmaceuticals and cosmetics. Currently the company is in the process of expanding its operations, including its client and asset-base, in Asia and overseas.
It is aiming to tap into a fast-growing market driven by consumers wanting products that contain natural ingredients as consumers increasingly go for chemical-free alternatives. This trend has meant that in the US alone, the market for natural-based cosmetic products grew 50 per cent from 2000, to reach a value of $5 billion in 2004.
On the back of this fast growth, ingredients formulators have reported that natural ingredients have been proving increasingly difficult to source, which in turn has pushed up ingredients prices to new highs. This trend is pushing cosmetics manufacturers further and further a field in the search for such ingredients - something that should see Botaniex well placed.