Purecircle
PureCircle raises £40 mln for expansion as it expects Reb A sweetener demand to soar
PureCircle Ltd (AIM: PURE) said it raised £40 million before expenses, approximately US$67 million, via the placing of 20 million new shares at £2 each, and plans to use the money to position the company for the increasing demand it expects over the coming years for its natural zero-calorie sweetener Rebaudioside A.
The company’s flagship product is derived from the Stevia Rebaudiana plant, which is native to subtropical and tropical South America and Central America.
Since the US Food and Drug Administration clearance for high purity Reb A to be used as a food and beverage ingredient was granted in December 2008, a range of stevia-sweetened products have been launched in the US and performed well, securing strong sales. For example, stevia-sweetened tabletop products have secured 10 percent of the US tabletop sweetener market. Similarly, sales of PepsiCo's SoBe Lifewater beverage flavours sweetened with Reb A, which were launched in 2009, are outperforming the category, PureCircle said, citing research data.
“With continuing pressure for the reduction of calories in food and beverages, PureCircle's discussions with both current and potential clients have led to the expectation that such clients are planning launches of stevia-sweetened products and line extensions in a wider range and larger size in 2010 and 2011,” it said.
It plans to use US$40 million of the new funds to expand and further strengthen the supply chain and working capital and US$25 million for marketing and branding initiatives with a view to establishing a strong ingredient brand closely associated with the company.
PureCircle plans to accelerate the expansion of its production capacity, initially with a new stevia extraction facility in Paraguay, with work expected to start early in FY 2011. In addition the Company intends to invest further in proprietary leaf development and expansion as part of its global leaf diversification programme.
In July 2009, it announced completion of the major expansion of its extraction plant complex in Jiangxi province, south eastern China, which quadrupled Stevia extract capacity from 1,000 metric tonnes per annum to 4,000 tonnes. The doubling of the group's annual high purity Reb A refining capacity from 1,000 tonnes to 2,000 tonnes at its refinery in Malaysia is expected to be completed by the end of 2009.
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14/01/10 PureCircle signs long term agreement with farmers cooperative in Paraguay to expand Stevia leaf production
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30/10/09 HansonWesthouse bullish on PureCircle after market breakthrough
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27/04/09 PureCircle completes expansion of extraction plant in China
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18/12/08 PureCircle gets US FDA go-ahead for Reb-A natural sweetener
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15/10/08 Strong revenue growth lifts PureCircle