Contract manufacturer opens new $100m Sydney plant and outlines overseas strategy
Spanning 26,000 sq m, the manufacturing plant was officially opened by Australian PM Malcolm Turnbull and is expected to create nearly 420 jobs in western Sydney.
According to Vitex CEO and co-founder Dr Aniss Chami, the new plant is also the country’s biggest manufacturing facility for tablets and soft gels in complementary medicines.
Speaking to NutraIngredients-Asia, he said that while the constant rise in demand worldwide for health and wellness products from countries like Australia and New Zealand is good news for companies in the industry, it has also made ensuring adequate supply far more challenging.
"We used to underestimate demand, which led to inadequate supply; there was a gap between manufacturing output and sponsors (distributors) who sell our products overseas."
At present, industry revenue is reportedly A$1.4bn, with IBISWorld's 2016 Industry Report predicting annual 3.9% growth over the next five years to A$1.7 billion.
A reputation to maintain
Demand is especially strong in the Middle East, South East Asia, the Arab Gulf, South Korea, and China, with the latter accounting for the bulk of exports.
A history of food safety scandals have contributed to the Chinese fixation with health foods and supplements produced by foreign firms, particularly those from Australia.
Chami said, "To many consumers, especially in China, anything with 'Australia' on the label is clean and natural. As long as there is this cultural idea that our products are superior, we must live up to it."
Increasing demand for Australian-made supplements necessitates not just higher production volume, but a greater variety of product ranges as well.
Chami told us: "At the beginning, we manufactured very basic complementary medicines, such as fish oil capsules. But now, we are seeing much more diversification, whereby our product ranges have extended to the beauty segment."
He added that straight oils in soft gel form, such as squalene oil, were popular in Northern Asia, while beauty, weight management, fitness, and libido-boosting supplements were flying off the shelves in South Asia.
Interestingly, more and more consumers across Asia have taken to Australian sheep placenta products, especially in formats like soft gels. These products are said to promote cell growth, hormone regulation, immune function, cellular hydration and efficient oxygen transfer.
Chami explained that this represented a widespread desire for traditional medicinal ingredients in convenient formats, a priority for working adults who want to avoid taking tablets.
People, profits and plans
He revealed that in the past year, Vitex's revenue had doubled and its profits tripled. But it's not just the company's profits that are expanding.
He said, "We currently have 140 employees. A year and a half ago, we had only 40 people, and in the next year and a half, we intend to hire a total of 430 people."
This workforce expansion will no doubt support Vitex's upcoming infrastructure plans.
"We have three goals: Firstly, to ensure the current facility is operating at full capacity so we can deliver on our job creation and product output promises.
"Secondly, to build a facility in Australia three times larger than the new plant within the next three years, to focus on manufacturing prescription drugs.
"Thirdly, to establish facilities overseas to provide local marketing and distribution support to our sponsors."
While the company operates solely out of Australia at the moment, it intends to set up manufacturing facilities overseas, beginning with Dubai and Hong Kong, as they are "hubs for their respective regions".
Chami added that over the next five to 10 years, Vitex hopes to have established facilities in Europe, the Americans, and other parts of Asia.
