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GLG’s profits boosted as proprietary stevia leaf comes on line

By Caroline Scott-Thomas , 10-Aug-2010

Stevia supplier GLG Life Tech’s gross profits increased 126 percent in the first half of 2010, and revenue grew 35 percent, to C$18.7m, boosted by development of its proprietary stevia leaf, the company said.

Gross profits reached C$6.9m in H1, compared to C$3m a year earlier.

The company has also seen growing profit margins during the past six months, which it attributes to a cost reduction strategy that involves developing stevia leaf with a higher proportion of Reb A – the component of the leaf thought to be the sweetest and most sucrose-like.

GLG said in its financial report: “The company's use of its own proprietary stevia leaf to meet 100 percent of production requirements is central to this strategy. It is expected this goal will be met late in the third quarter of 2010 once the next stevia leaf harvest is underway.”

The company, which grows, markets and distributes stevia extracts, is also involved in research and development work with the plant-derived sweetener and, along with rival stevia company PureCircle, supplies Cargill with Reb A stevia extracts for its Truvia-brand sweetener.

Over the past six months, it has signed a number of collaborative partnerships around the world, including in Mexico, India, South America and Australasia, focusing on providing its stevia blends to world markets and on developing stevia-sugar blends for use in reduced calorie products.

GLG Life Tech said it would continue to seek strategic partnerships for distribution of its stevia extracts in other parts of the world.

Despite increased physical sales volumes, revenues from sales of stevia extract were down during the second quarter, from $10.8m to $10.5m for the same period a year earlier – a situation the company said was largely due to a stronger Canadian dollar. GLG conducts a large proportion of its sales in US dollars.

The company said its revenues were boosted in the first quarter of 2010 as it fully employed its new production facilities at Dongtai and Mingguang, when leaf processing capacity increased from 5,000 metric tonnes a year to 41,000 metric tonnes.

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