The loss (slightly higher than the $12m loss in Q3, 2012) was mostly due to inventory impairment charges of $8.6m (which reflect a “technical obsolescence provision”), and capacity charges of $1.5m, said GLG, which posted an 8.8% drop in revenue in the quarter to $5.2m.
The drop in revenue was driven by lower volumes of stevia extract sales to other stevia providers, said GLG, which is now focused primarily on selling to international customers who buy stevia on a recurring basis rather than selling to other stevia providers.
But it added: “With the growth in the stevia market worldwide, GLG anticipates that its ability to produce 1,500t of high purity stevia products will enhance the company's attractiveness as a large scale producer as stevia becomes a mainstream product.”
As the largest food company in China, COFCO's distribution channels reach every consumer in every market
Meanwhile, GLG continues to make progress in developing its business with COFCO (China National Cereals, Oils, and Foodstuffs Corporation), it added.
Projects include developing reduced sugar dairy products for the COFCO Mengniu Dairy Subsidiary and multiple healthy foods and beverages for COFCO’s China Foods subsidiary, said GLG CEO Dr Luke Zhang.
“We continue to develop our relationship with COFCO, and will be their supplier as they introduce stevia sweetened products. As the largest food company in China, their distribution channels reach every consumer in every market.”
The parties are also assessing some of GLG's existing stevia sweetened products for distribution in China including tabletop, added GLG, which recently sold its 80% interest in its consumer products subsidiary, Dr. Zhang’s All Natural and Zero Calorie Beverage and Foods Company.
Strategic focus on international customers, steady income
GLG’s stock price plummeted in 2011 after bosses revealed they had renegotiated a supply agreement with Cargill such that it would no longer be obliged to purchase most of its stevia from GLG. In May 2012, its shares were suspended after it failed to file its accounts on time.
However, things are now firmly back on track, says the firm, which resumed trading on the Toronto Stock Exchange (TSX) in the summer.
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