Despite the very pleasing sales  of HOCHDORF's high-quality baby care formulations and Pharmalys products in North Africa and the Middle East, difficult challenges remain in the collection of old receivables. Intensified cooperation at the operational level has meant future sales volumes are subject to a transparent and reliable payment regime. The gradual reduction of legacy receivables from customers is now subject to a tight liquidity process with payment arrangements that are confirmed at least once a month.

After more than four years of extraordinarily intensive work, we have finally succeeded: HOCHDORF has received approval to manufacture products for the Chinese infant nutrition market on behalf of our partner, the leading infant formula brand Biostime from the global health and nutrition company H&H Group. This is impressive proof of HOCHDORF’s quality and competence as an approved manufacturer, which is needed to meet the strict requirements in this market. The approval has been communicated internationally via an online platform for imported products (State Administration for Market Regulation, SAMR). This is essential for the next steps we will take in partnership with Biostime’s parent company, the H&H Group. Revisions of the local food law are due at the beginning of next year which involve the review and resubmission of the formulations for the SIGMA Star brand. We therefore do not expect the first sales until mid-2024.

A short-term supply emergency caused quality problems with the dominant US market leader and a correspondingly strong demand for alternative suppliers for infant and follow-on formula was experienced in the US at the beginning of the year. Producers from all over the world were approached for additional supplies. HOCHDORF does not yet have marketing authorisation for the US market. Thanks to a quickly formed task force, the registration process for the FDA (United States Food and Drug Administration) was initiated within a few weeks using an accelerated procedure. Discussions with local trading partners are ongoing to clarify the level of demand and time frames. In the best case scenario, deliveries could begin in the final quarter of 2022.

As detailed in the Letter to the Shareholders, HOCHDORF focused on the strategic and operational review of the product portfolio and contract structures in the first half of 2022. Unprofitable or overly rigid contract terms were renegotiated; the majority of contractual relationships will be adjusted this year. However, some of these optimisations will extend into 2023 and are not expected to take full effect until mid-2023. At the same time, HOCHDORF is also strengthening the Sales and Innovation departments in terms of personnel: Gerina Eberl-Hancock (Chief Revenue Officer) and Lukas Hartmann (Chief Innovation Officer) joined Group Management in May 2022. The sales and marketing teams have merged and are geared towards opening up new and promising business segments in the future (such as specialist foods for all age groups or the market for “alternative ingredients”). HOCHDORF has allocated specific resources to develop these areas.

In the Baby Care division, HOCHDORF will continue to focus on growth opportunities in existing markets such as the MENA region and Central America in the second half of 2022, while at the same time setting the course for markets such as China and the US thanks to successful registrations. For the Bimbosan brand, the aim is to strengthen the newly introduced, innovative additions to the range with plant-based alternatives to cow's milk, in addition to intensified marketing measures for optimising sales and digitalisation.