Baby Care business area
Thanks to the majority stake in the Pharmalys Group, gross sales revenue increased significantly. The collaboration with Pharmalys got off to a good and successful start. Initial brand registrations were submitted for the Chinese market.
Upon integration of the Pharmalys Group, the consolidated gross sales revenue in the first half of 2017 went up 36.5 % to CHF 82.2 million (previous year: CHF 60.2 million). As expected, the Pharmalys Group was able to increase its net sales and income figures. However, the volume produced and sold in the Swiss Baby Care business declined due to much shorter delivery times, temporary loss of quantities in Libya and a new tender award mechanism with subsequent excess supply in the infant formula market in Egypt.
HOCHDORF Swiss Nutrition Ltd
China is faced with a multitude of infant formula suppliers and intends to massively reduce the number of brands sold in China by means of a cumbersome registration procedure. In early June, we submitted the extensive documents for the registration of two brands to the responsible authority in China. Documents for other brands will follow in the second half of the year.
On the sales side, we intensified our efforts to gain new customers with the goal of filling the new capacities in Sulgen as quickly as possible. Initial conversations have taken place and give us reason to be confident. We have already signed a cooperation agreement with a new distributor.
Another milestone is the integration of a specialised glossary on our website in English and German. The glossary features definitions of all relevant terms in the fields of infant formula and nutrition in general for the benefit of our customers and anyone else who may be interested. Our glossary is being continually expanded and represents another step on our way to ensuring consumer proximity.
The integration of the Pharmalys Group has been successfully launched. Joint presentations are planned for 2018 in the fields of marketing and communication. The possibilities for selling further HOCHDORF products in the Pharmalys distribution network were also discussed, and the acceptance of some initial products was tested.
Pharmalys Laboratories SA started operations or introduced new products in various markets. For example, the "Primalac Cereals" product was launched in Iraq, Lebanon, Mauritania and West Africa. We now also sell our infant formula in Syria and Bahrain. Additionally, we succeeded in increasing our market share in numerous countries in which we are already present.
The customers of HOCHDORF Swiss Nutrition Ltd Baby Care have got used to shorter delivery times, and the ordered quantities have returned to normal. The order books for the second half of the year are again well filled. At the same time, customer acquisition for the additional capacities of our new spraying tower in Sulgen will continue from the second quarter of 2018. Pharmalys will be able to perpetuate its growth at a high level. For example, we will newly introduce our products in Ghana.