The 7,000 square metre facility will provide a total manufacturing floor space of around 30,000 square metres for the New South Wales (NSW) firm.
The plan is part of its AUD$10.7m (USD$7.5m) site upgrade featured in its quarterly business update recently.
Star Combo Pharma CEO Su Zhang said: “We now have the biggest gel cooker, which needed multiple containers and ships to be delivered. We have been thinking about this since two years ago (about building new facilities, acquiring new land) due to the COVID-19 pandemic.
“Today, we are thinking about catering to the market in the post-pandemic world. With the new facility, we aim to boost our capacity and fulfil the vision of becoming the new global hub for the APAC region”.
The actual customer base for the OEM manufacturing arm cannot be disclosed, but Su claims they are well-known vitamin players in Australia. Some major product lines that Star Combo manufactures are soft gels, which encompass over 50% of its production capacity, for products like fish oil, vitamin D, ginkgo biloba and krill oil; tablets; sachets; and powders for products like protein powders and collagen.
The publicly-listed company’s fast-growing business arm is contract manufacturing, which provides for 40% of the total group revenue. According to Su, the revenue and profitability of the arm has grown 25% year-on-year without the new facility. With the new facility boosting capacity, it can double the firm’s existing capabilities.
“Our growth driver for the future that I see right now is the OEM manufacturing,” she said.
Besides providing OEM services, the firm manufactures its own supplements, such as Costar, Living Healthy, Amax and J&K. Each line has its depth of offerings, such as Costar Spirulina, Costar Liver Detox, Costar Colostrum milk powder, Amax sheep placenta, Amax omega 1000mg and Amax royal jelly. These lines were observed to have grown around 20%, said Su.
Star Combo’s third arm is retail, which has recorded a 40% growth despite retail headwinds and reduction in revenue and profit.
For innovation, Su intends to introduce new dosage formats to fulfil the world’s push for sustainable vegetarian soft gel capsules.
Second, the team wants to bolster its granulation capabilities to produce powder formats, such as herbal products, to boost absorption into the body.
However, the supply chain interruption in Australia has also forced the firm to stop production due to the absence of core ingredients, exacerbated by personnel issues.
For instance, Star Combo ordered 10 containers of fish oil that were expected to arrive in January 2022. Until today, none of the shipment has arrived. Besides that, there are no technicians, technical experts or subject matter experts that can be brought in for skills transfer due to the visa restrictions in place.
“The Shanghai lockdown effect cascaded. Ships can’t unload and vice versa. Companies like us usually have residue stock orders, but now don’t. But even with constraints, the manufacturing hub will still function. We have sufficient orders to keep going.
“As for manpower, the Australian borders are open, but there’s nobody to guide staff and transfer skills at the moment. Remote learning is possible, but the time difference will be an obstacle. There are around 100 workers manning our entire location and we intend to hire at least another 50 to 100 headcount with the building of the new facility.
“We want to do that and hire more locals. It’s about job creation. And we are also located in the western Sydney precinct, which is a high growth area in industrialisation. We are right smack bang in the middle of it all.
“When we first moved in, there were no high rise buildings. From a heavy industrial area, it has now become a commercial hub. With the opportunities and talents and resources, it’s really a good thing. Now that it is a growing area, we are also in fact adding value to this area as well,” said Su.
Aiming for the stars
Su believes Star Combo Pharma has immense growth potential and could deliver globally, especially for the functional range and vitamins. She is confident the firm can meet the worldwide demand with the construction of the new plant, with bookings already in the pipelines.
Besides catering to the Australia and New Zealand (ANZ) markets, the firm wants to become a global player. It aims to conquer the US, Europe, Middle East and China with new projects and innovations.
“We are ready to be on par with global manufacturers. The R&D and innovations we are working on are also in conjunction with institutes of higher learning. It’s a hard year, but we’re in this together. The firm has scalability. There is hope at the end of the tunnel for manufacturing. Our next focus will be advance manufacturing,” concluded Su.