News

Five years, $98 million

JAT has granted exclusive distribution rights to AustAgri Pty Limited to sell Golden Koala Premium Range Infant Formulas in mainland China over a five year period, in a $98 million distribution agreement.

The agreement gives AustAgri exclusive rights to distribute and sell the 900g Chinese language versions of Golden Koala’s Premium Range Infant Formulas in mainland China, and non-exclusive right to distribute and sell the products via commerce platforms into Hong Kong, Macau and Taiwan.

AustAgri must order a minimum volume in each of the five years of the agreement, generating approximately $98 million in revenue for Golden Koala.

The agreement requires AustAgri to pay a $1 million deposit in two instalments in order to secure the exclusivity. The first 50% is due within seven days of signing the agreement (refundable should JAT fail to secure the requisite regulatory approvals within 12 months) and the remainder is due within seven days of receiving regulatory approval to sell the products within China. Should AustAgri at any time fail to place the minimum orders, it would forfeit the $1m deposit, and it’s exclusive rights would terminate.

 

High visibility campaign to launch NEURIO products on “Little Red Book”

Alibaba-backed, social media cross-border ecommerce specialist in imported products

100 million users – 30 million monthly active users

JAT is pleased to announce a high visibility campaign to launch NEURIO products on Alibaba-backed Xiaohongshu (which translates as “Little Red Book”).

Xiaohongshu is a social media ecommerce shopping app based in Shanghai, targeting 18-to-35-year-old Chinese urban females. Users share shopping tips, swap fashion ideas and buy luxury, fashion and beauty products from overseas.

Founded in 2013, Xiaohongshu has grown explosively, claiming 15 million monthly active users in June 2017 and 30 million in June 2018.

The NEURIO campaign will run from mid-July to mid-August. The campaign includes ten high profile internet celebrities promoting Neurio products and posting articles on Xiaohongshu.

In addition 100 selected consumers (leaders with strong Xiaohongshu followings) will trial Neurio products and post their views.

The following NEURIO products will be promoted and sold in the campaign and remain available for sale on the app when the campaign concludes;

  • Lactoferrin Milk Powder
  • DHA Algae Oil Softgel
  • Probiotics drop drink
  • Mushroom juice drink

“Xiaohongshu is now the most popular Chinese e-commerce platform for imported luxury products,” Executive Director Wilton Yao said. “This is the Neurio brand’s first large scale marketing campaign on a major Chinese ecommerce platform and will greatly enhance the brand’s market visibility as well as directly impacting sales.”

For more information about Xiaohongshu, readers may wish to view the following;

https://www.forbes.com/sites/russellflannery/2018/06/02/alibaba-tencent-k11-adrian-cheng-join-300-mln-investment-round-for-xiaohongshu/#459c71b95dd2

https://technode.com/2018/06/01/alibaba-xiaohongshu/

https://digit.hbs.org/submission/shopping-is-innocent-and-so-is-sharing-how-xiaohongshu-little-red-book-succeeds-in-china/

https://www.dragonsocial.net/blog/three-reasons-for-xiaohongshu-success/

JAT to exhibit in-house brands at the world’s largest trade fair for child, baby and maternity products

JAT has secured exhibition space at the 18th Shanghai International Children Baby and Maternity Products Industry Expo, taking place from 25th to 27th July.

JAT’s 18 square metre exhibition space will showcase the portfolio of in-house products that the company has been developing since shareholders formally approved the change to Fast Moving Consumer Goods trading, including;

  • Golden Koala
    • Premium Infant Formula (Stage I for newborns to six months),
    • Premium Follow-On Formula (Stage II for six to twelve months),
    • Premium Toddler Milk Drink (Stage III for one to three years),
    •  Full Cream Instant Milk Powder.
  • NEURIO
    • Lactoferrin Milk Powder
    • DHA Algae Oil Softgel
  • Cobbitty Country

Golden Koala and NEURIO product samples will be made available to visitors (in addition to detailed product information) and brochures will outline the range of products Cobbitty Country plans to release over coming months.

JAT staff will be supported by staff from Shanghai Dragon Corporation both in the exhibition space and at private meetings with agents, distributors, wholesalers and retailers.

“These trade fairs offer excellent brand exposure,” JAT Executive Director Wilton Yao said. “More importantly, visitors are trade professionals looking for new products and new suppliers and planning to place orders.”

The CBME China 2017 Post-show Report showed that almost all visitors were professional buyers and that 89% attended with the purpose of placing orders, as detailed in the following tables:

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“JAT’s exhibition space is ideally located in the ‘Australia’ pavilion, adjacent to the ‘Fabulous Mom Zone’.” Mr. Yao said.

The organisers of CBME China 2018 expect numbers to exceed last year’s;

  • 88,316 trade buyers
  • 2,662 exhibitors showcasing 3,952 brands
  • 239732 sqm exhibition space

 

Presentation to Investors and Brokers

The following Investor Presentation was made to brokers on 2nd July and posted to the ASAX.

(Please note this is a 5MB file and may take a few minutes to download. The information contained in this presentation is for information purposes only and has been prepared for use in conjunction with a verbal presentation and should be read in that context. )

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Golden Koala Sales and CFDA approval update

English label infant formula and milk powders

Preparations for the new English language label Golden Koala milk products have been completed and the following orders placed with manufacturers;

  • one container of Golden KOALA Premium Infant Formula (Stage I for newborns to six months), Premium Follow-On Formula (Stage II for six to twelve months), and Premium Toddler Milk Drink (Stage III for one to three years).
  • one container of high calcium GOLDEN KOALA Full Cream Instant Milk Powder.

Golden KOALA Premium Infant, Follow-On and Toddler formula will be sold through the network of cross-border distributors that JAT has been developing over recent months.

GOLDEN KOALA Full Cream Instant Milk Powder will be sold through cross-border distributors and in addition, wholesaled to domestic distributors for sale in Chinese shops and supermarkets.

Chinese label formulation confirmed, key milestone in CFDA approval process

Additionally, the Chinese label formulation for Golden KOALA Premium Infant products has now been finalised. This is a key milestone in the CFDA approval process for domestic Chinese distribution, as samples can now be prepared for laboratory testing, which is a major preparatory step before the CFDA application is finalised.

Distribution agreement with Cyclone E-Commerce Brings Over $7.5 million in single product revenue

The Directors are pleased to announce that JAT has entered into a distribution agreement with Cyclone E-Commerce Co., Ltd (Cyclone) under which Cyclone has agreed to purchase over $7.5 million of milk powder from JAT over the next 12 months.

Cyclone is a distributor based in Hangzhou City, Zhejiang which utilizes proprietary cross-border e-commerce platforms and bonded warehouses to deliver global products to Chinese consumers.

Cyclone also supplies global maternity and baby brands, health products, snacks, and skin care products through Hipac, Momtime and other maternal and baby platforms and to O2O experience stores and micro-marts. O2O refers to the business strategy of “online-to-offline”, which draws potential customers from online channels to make purchases in physical stores.

Cyclone has committed to purchase 300,000 tins of NEURIO – Lactoferrin Milk Powder from JAT over a 12-month period.

“This transaction brings in more than $7.5 million in revenue over the 12 months. That’s quite pleasing for a single product with a single customer. Just as important, it’s confirmation of our strategy of combining Sunnya’s products with JAT’s distribution capacity. NEURIO – Lactoferrin Milk Powder is an attractive product in China and the orders are starting to reflect that.”

For more information, references to Jat’s ASX announcement: Distribution agreement with Cyclone E-Commerce.

Huibao International Group Distribution Agreement and First Order

The Directors are pleased to announce that JAT has entered into a distribution agreement with Australian Huibao International Group Limited (Huibao).

Huibao is an Australian owned company which operates a ‘Community O2O’ business in five regions of China: Shiyan, Beijing, Xi’an, Tianjin, and Changsha. Huibao’s Community O2O business has been utilising mobile apps to promote, sell (via a mobile payment gateway) and deliver products to consumers since 2013.

O2O refers to the sales strategy of “online-to-offline”, which draws potential customers from online channels to make purchases from physical stores. HuiBao will distribute JAT products in China via its online platform and app.

Huibao has moved quickly, placing its first order for 960 tins of NEURIO– Lactoferrin Milk Powder.

“NEURIO is an outstanding product and we are delighted with the reception it is receiving from our distribution network,” Executive Director Wilton Yao said. “I have no doubt this will be the first of many orders of NEURIO and of other products from Huibao.”

JAT Directors inspect the site for the first ‘Jat Maternity and Infant Boutique’, and secure first Sheng Run order

JAT directors inspected the site of the first JAT Maternity and Children’s Shop in the Hui Yue Shopping Mall in Zhengzhou last week to discuss details such as shop size, design, fit out and product range.  Arrangements also progressed for securing the logistics of delivering JAT products to the Hui Yue Shopping Mall and other locations where JAT Maternity and Children’s Shops are to be established in other Sheng Run Group shopping malls.

KidsCityWeb

At the same time, they succeeded in leveraging JAT’s relationship with the Sheng Run Group by securing an initial order for NEURIO – Lactoferrin Milk Powder, one of Sunnya’s key products.

The first order is for 960 tins.

“This order illustrates the value of combining Sunnya’s product range with JAT’s distribution capacity,” Executive Director Wilton Yao said. “The potential benefits of combining the two businesses are hard to overstate. NEURIO – Lactoferrin Milk Powder is a very impressive product and we expect it to be just the first of Sunnya’s product range that we sell.”

Shanghai Dragon Corporation – 4,000 Stores, and Orders Commence

In April JAT announced an agreement with Shanghai Dragon Corporation (SDC) to bring Australian products to Chinese consumers, and to co-develop own-brands for the Chinese market.

JAT Directors met with SDC management again last week in Shanghai to take the first tangible steps in implementing this strategy and wish to update the market accordingly.

  1. SDC has made it first order – a shipping container of Australian oats for sale in its network of retail stores across China.
  2. Space will be set aside within approximately 4,000 of SDC’s retail stores for JAT speciality shops. These shops will be managed by SDC staff and sell a range of imported goods supplied by JAT.
  3. JAT and SDC will jointly develop JAT’s Cobbitty Country brand in Australia and China for the planned range of in-house products, which will include milk products, biscuits, toothpaste, soap, and other high volume FMCGs.

“This order represents the tangible commencement of Chinese retail sales for JAT,” Executive Chairman Tony Crimmins said. “JAT products will soon be sitting on the shelves of thousands of shops across China. A strong Chinese retail presence is the fourth pillar in our FMCG strategy, setting us apart from other Australian trading companies selling to Chinese consumers.”

“We are particularly fortunate to be working with Shanghai Dragon in this regard”, Mr Crimmins said. “They are a large, publicly listed Chinese company with strong state support, a rich 40-year history of international trading, sales in excess of AUD 1 billion per annum and extensive logistics and warehousing infrastructure.”