GLG Life Tech narrows loss as revenues increase

17-May-2010 - Last updated on 18-May-2010 at 11:14 GMT

Stevia supplier GLG Life Tech has narrowed its first quarter loss from $1.5m to $1.3m as it continued to capitalize on growing demand for the zero-calorie sweetener, the company said.

Revenue increased 174 percent to $8.2m during the period ended March 31, compared to $3m in the first quarter last year. Gross profit stood at $3.3m, an increase of 171 percent from $1.2m for the first quarter of 2009.

“The increase in gross profit can be attributed to increased stevia sales and reduced production costs of stevia extract,” the company said.

It added that the increased gross profit in part was driven by lower production costs associated with use of GLG’s proprietary stevia leaves.

“Also, in the first quarter of 2010, GLG was using its new more efficient production facilities at Mingguang and Dongtai, compared to the first quarter of 2009 when it was only using less efficient production facilities at Runde in Qingdao,” GLG said.

The US market for stevia-derived sweeteners, which are said to be natural and are calorie-free, opened up in December 2008 when the Food and Drug Administration (FDA) issued GRAS (generally recognized as safe) no objection letters for the stevia extract Reb A at 95 percent purity or above for use in food and drink.

Looking ahead, the company said it intends to expand into several key markets. During the first half of the year, GLG Life Tech announced a partnership with Sugar Australia to extend its presence into the South Pacific region, and with Essentia Stevia to market its stevia extracts in South America. Just last week, the company announced it had signed a memorandum of understanding with Indian firm Global AgriSystem Private Limited, to introduce its stevia products in India.

Also in the first quarter, the company announced the launch of a lower-price range of stevia-derived sweeteners, Sweet Success, based on stevia extracts other than Reb A. These have yet to be backed by an FDA letter of no objection, although they are in line with JECFA (Joint Expert Committee on Food Additives) standards in use in many other countries.

And GLG Life Tech and Weider Global Nutrition agreed to end their joint venture, Sweet Naturals, and dismiss lawsuits against each other, after a disagreement over the terms of the partnership. The two companies said they would both continue to market their stevia extracts separately.