Corporate Overview |The
Company | Nutriceutical
Materials | Government Regulation
and Health Issues | Nutriceutical Health- and Related Products
| Competition | International Sales and Marketing |The Duty-Free and Specialty Tax-Free
Industry | International Affiliations | New Product
Strategy | Trademarks
The “Mother
Nature” brand has been established as a
producer of Australian health products in the global marketplace
for nearly two decades.
In 1998 Mother Nature Health
Products Pty Ltd became a “Proudly Australian”
owned company and has since changed its strategies and
directions to focus on premium natural supplement products.
Following changes made to
its marketing strategies, it has successfully expanded
its sales to many countries, predominantly around the
Asia/Pacific rim, focusing on the more niche markets such
as “Duty Free” and “Professional Health
Care” centers, catering for the increasing tourist
market sector.
The prominent brand products
have always attracted Asians from overseas as well as
within Australia, which we have experienced from sales
within Australia. As a result of the Year 2000 Olympic
games held in Sydney, Australia, we have significantly
increased the product market exposure around the Pacific
Rim.
By distributing nutriceutical
products to Duty/Tax Free and Professional Health Care
centres as gift items, each traveler will be purchasing
a vision of “total well-being” to present
to their friends and family on their return to achieve
a healthy, and longevity lifestyle.
Just minutes from the CBD of Sydney The Company’s
Head Office and Warehouse has recently relocated at an
newly developed industrial complex near Sydney’s
International Airport.
A team of personnel comprising,
sales & marketing, accounts administration, quality
control, and management are of multi-cultural background
qualified to assist clients of different nationalities
with technical advice.
Manufacturing and production
is performed in plants within New South Wales, Queensland
and Victoria as well as outsourced to selected quality
assured manufacturing plants around Australia.
Mother Nature’s mission
is to promote “well-being” health solutions
through the use of natural health supplements.
All parties quote most import
and export sales in Australian Dollars in order to limit
exposure to foreign currency fluctuations.
The Company acquires its
supply of Bee, Marine and Flora products exclusively from
within the Asia-Pacific Region. However due to the high
demand of certain products we are forced to seek out supplies
as far away as United States and/or Europe keeping within
compliance to the guideline of Good Manufacturer Practice
(GMP) and approved suppliers of the Therapeutic Goods
Administration (TGA) of Australia.
The Company ships its raw
materials to contract manufacturers around the world who
process and package the Company’s products to its
specifications. In the case of Royal Jelly capsules, the
processed goods are shipped to the Company’s production
line in Sydney.
The Government of Australia
under the Therapeutic Goods Administration Act and policing
has approved the Company’s facility as suitable
for manufacture and packaging of therapeutic goods. Quality
control and inspection procedures are performed at the
Company’s facilities upon receipt of the goods.
The Company’s products
are also tested through chemical analysis performed at
independent testing laboratories to ensure compliance
with the Company’s standards and specifications
are met at all times. Products are manufactured on a fixed
price basis. Export sales are sold in Australian Dollars
in order to limit transaction risk relating to fluctuations
in foreign currency.
Distribution and sales of the Company’s
products in Australia are regulated under the Australian
Therapeutic Goods Act of 1989 (the “Therapeutic
Act”) and the Code of Good Manufacturing Practice
for Therapeutic Goods for Human Consumption (the “Code
of Therapeutic Goods”) that regulates wholesalers
in the safe handling, storage and distribution of therapeutic
products.
Each of the Company’s current products
has received a “Certificate of Listing” from
the Australian Therapeutic Goods Administration (TGA),
which grants listing in the Australian Register of Therapeutic
Goods for approval of the sale of therapeutic goods within
Australia and allowable for export. Similar laws exist
in other countries in which the Company’s products
are sold. The Company believes that it is in compliance
with all such regulations or qualifies for an exemption
as a result of its compliance under Australian laws.
With respect to distribution of the Company’s
products internationally, the processing, formulation,
packaging, labeling and advertising of the Company’s
products will be subject to regulation, e.g. In the United
States of America one or more federal agencies, including
the Food and Drug Administration (“FDA”),
the Federal Trade Commission (“FTC”), and
the Consumer Product Safety Commission, among others.
The Hatch-Harkin Dietary Supplement Health
and Education Act of 1994 will also regulate these activities
and by various agencies of the states and localities in
which the Company’s products will be sold. The Company
believes that it will comply with these laws and regulations
in all material respects. Federal and state regulations
are designed to protect consumers, to govern the promotion
and advertising activities of the Company and other sellers
of the Company’s products.
Changes in laws and regulations internationally
could materially affect the Company and any costs of compliance
associated with such laws and regulations.
Many of the Company’s current health-related
and nutriceutical products consist of bee-related products,
whilst others formulated from marine or flora products,
presented in a soft-gel or hard shell capsules.
Note:
New product lines are
being developed all the time to meet the needs of consumer
demand.
The health food, nutrition and lifestyle
product industries are extremely competitive both domestically
and internationally. The Company faces substantial competition
in each of its product lines. The Company competes in
a variety of segments within these product areas, including
the categories of antiseptic, antibacterial and anti fungal
products, as well as the intensely competitive consumer
product, nutritional supplements and vitamins. Competitive
factors include quality, price, style, name recognition
and service. Although the Company believes that it can
compete favorably in these areas, there can be no assurance
thereof.
The Company will primarily compete in the
sale of its products internationally and within Australia
with pharmaceutical companies, specialty retailers, mass
merchandisers, chain drug stores, health food stores department
stores and supermarkets. Many of such companies have trademarked
products known worldwide.
Mother Nature Health Products Pty Ltd also
competes with big conglomerates as well as those who manufacture
and distribute non-branded (generic) health and lifestyle
products.
The Company’s premium Trade Mark branded “Mother
Natureä” products has frequently featured in
numerous airline magazines, including Qantas Airlines
(Spirit In-flight Magazine), Korean Airlines (The Korean
In-flight Magazine), Air New Zealand (Pacific Way In-flight
Magazine) and Australia Asian Airlines (Southern Sky In-flight
Magazine) and has been sold to airline passengers in-flight
as part of the airlines’ on-board Duty Free sales
and product promotions. The Company’s products are
also advertised in a number of specialty tourist magazines.
Having awareness of the product brand throughout
Asia, an expansion to the People’s Republic of China’s
marketplace would be an important step. Market agents
and representative have been identified who are able to
provide sales potential, and at the same time will provide
the company with opportunities for a joint venture with
local TGA approved pharmaceutical manufacturers, in turn
it may dramatically reduce the cost of raw material shipment,
manufacturing and packaging, that we are at present experiencing.
The Company has maintained the head-office
in Sydney, Australia and through independent sales agents,
such like as GNC (General Nutritional Centre) Singapore
and Malaysia. In addition, the Company sells its products
as a gift line through downtown “Duty/Tax Free”
and airport “duty free” store “DFS Galleria”
outlets on an international basis and locations attractive
to visiting tourist.
The Company creates customised merchandising
programs for the duty free and specialist tax-free stores,
which sell its products consisting of point-of-purchase
displays to tourist with selections of world brand products
in a variety, similar to that of the “Gucci, Chanel,
Elizabeth Arden, Tag, Chivis Brothers, Sony, etc.”
categories.
In this regard, the Company develops uniform
packaging with branded product identification.
The Company has found this approach to be
particularly appealing to buyers in such channels of distribution,
hence minimising their need to work with multiple suppliers
and this avoids fragmented product presentation. This
approach to “program sales” with packaging
uniformity assists in the development of brand recognition
that is an integral part of the Company’s marketing
and product development plan. The Company believes that
brand name product recognition has resulted in significant
opportunities for sales of related or complementary products.
Seasonality of products is generally not
a factor affecting the Company’s sales, although
certain products are derived from plants, flowers and
trees whose harvest is dependent upon weather and other
climatic conditions, which may affect the yield of oil
produced from a particular crop. The Company has endeavoured
to mitigate such risk by contracting to buy its oils from
plantations in different regions with varying weather
and climatic conditions and from farms and plantations
with diverse plant stock and maturity levels. The Company
believes that such variety in purchasing will provide
levels of oil production within predictable and identifiable
ranges.
The Company currently sells its products in more than
35 duty free, tax-free and specialty stores, most of which
are located in the Australia, Asia and Pacific region.
Duty free goods are sold wherever international travel
takes place; at airports, on international flights, on
cruise lines, and at international land border crossings.
It is proven that retailing of duty-free and tax-free
goods has now become increasingly sophisticated and is
now an important source of income for airports, airlines
and ferry operators, as well as a significant market for
manufacturers and suppliers of duty-free and tax-free
goods. Today, duty-free shops are found at virtually every
international airport border crossing, cruise line and
airline.
According to the 1996-1997 duty-free database and directory
published by Duty-Free News (the Duty-Free Database),
sales by Duty-Free and
Specialty Tax-Free stores in 1996 are expected to exceed
$22 billion, an increase from $20.5 billion in 1995. Among
the continents, the strongest region is Asian/Pacific
that had sales of $6.25 billion in 1995, an increase of
18.7% over the prior year, adding almost $1.0 billion
in sales. The Duty Free Database also reported that the
Asian/Pacific share of the world market in general grew
from 29.3% to 30.5% in 1995.
Airports are the main beneficiaries of Duty-Free spending,
which has had a significant influence on operational changes
and investments in the airport industry. Airlines also
benefit from in-flight Duty-Free sales. The continued
growth of Duty-Free spending in airports and on airlines
are generally believed to be based upon availability and
accessibility; there is usually a higher degree of involvement
by the airport landlord; and Duty Free customers at airports
and on airlines are a captive base for retailers.
As a result, according to the Duty-Free Database, airports
remained one of the largest Duty-Free distribution channels.
Duty Free sales in airports grew 12.8% in 1995 to $8.2
billion and its share of the world Duty-Free sales was
40.1%. Historically dominated by liquor, tobacco and fragrances,
Duty-Free shopping has emerged as the global home of a
wide variety of premium luxury goods. The desire to purchase
gifts and souvenirs by travellers has also stimulated
the production of specialty-packaged products in the Duty-Free
and Specialty Tax-Free industry. As new travel destinations
are added and itineraries change, the assortment of products
found within the Duty-Free shop changes as well.
The Company had formed Aries Holdings Limited, based in
Hong Kong, in September 1999, in order to explore opportunities
in the Asian market, hoping in the future to explore opportunities
in expanding the manufacturing, marketing and distribution
of the Company’s products in Asia.
In addition, the Company has entered into a number of
sales and marketing agreements with sales agents and sales
consultants for various territories within Asia and the
United States. Amongst other services, such agents and
consultants assist in the development, study and evaluation
of sales and marketing proposals, the pricing of products
and other.
.
The desire to purchase “gift
line” and “souvenirs”
by travelers has also stimulated the production of specialty-packaged
products, targeting Duty/Tax Free, Specialty and industry.
As new travel destinations are added and itineraries change,
the assortment of products found within the Company’s
current channels of distribution philosophy changes as
well.
The Company depends upon the development
of brand recognition for its current and proposed products.
Currently, the Company utilizes the following trade name
in the sale of its products “Mother Nature”.
The Company acquired its “Mother Nature” trademark
and registered such trademark for protection in Australia
in 1990, New Zealand in 1992 and Hong Kong in 2002.
Registration of the Trademark are pending in Singapore,
Japan, United States, Canada, China and Taiwan. The Company
has not yet applied for trademark protection for any of
its other brand names but intends to make such applications
in the near future.
The Company believes that brand name identification differentiates
the Company’s products from its competitors and
reflects the Company’s marketing strategy of providing
customers with high-quality, value oriented products.
