GLG says Chinese demand could help boost 2011 business by up to 60%

By Caroline Scott-Thomas

- Last updated on GMT

Related tags Glg life tech Food and drink

Stevia supplier GLG Life Tech has said its business is likely to increase by 50 to 60 percent in 2011 compared to a year earlier, mainly due to increased demand in China.

The company’s 2011 financial guidance includes sales of stevia, the natural, zero-calorie sweetener derived from the leaves of the stevia plant, to food and beverage manufacturers as well as for tabletop use, and also revenues from its newly established consumer products company in China, called Dr. Zhang’s All Natural and Zero Calorie Beverage and Foods Company (ANOC), of which GLG Life Tech will hold an 80 percent stake.

The company said it expects to report revenues of between C$160m and C$200m for the full fiscal year 2011, with EBITDA (earnings before interest tax, depreciation and amortization) expected in the region of C$30m to C$39m. GLG forecast revenues to be flat for the first half of the year.

Revenue from ANOC in the first half of 2011 is expected to account for about 20 percent of full year forecasted revenue, GLG said.

“Other key assumptions for the revenue forecast include the Company’s expectation that the China food and beverage market will grow 20 percent in 2011 and that the company will be able to launch its products in China nationwide, covering both major and regional cities in most provinces,”​ the company added.

GLG has said it expects a speedy introduction of ANOC products in China, starting with stevia-sweetened beverages in the first quarter of 2011, followed by food products such as yogurt, cookies, candy and oatmeal. It said it intends to launch 12 beverage products including six iced tea drinks, three juice drinks and three dairy drinks in 2011, starting late in the first quarter or early second quarter.

GLG has also highlighted a growing interest in healthy, natural foods and drinks among Chinese consumers as disposable income has grown, as well as an associated increasing incidence of diet-related health problems, such as obesity and diabetes.

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