Asian expansion gives BioGaia reasons for optimism: Managing director

By Gary Scattergood

- Last updated on GMT

BioGaia reported positive full-year results for 2016.
BioGaia reported positive full-year results for 2016.

Related tags Probiotic Japan

Probiotics manufacturer BioGaia has reported annual sales growth of 9%, excluding exchange rate effects, with managing director Axel Sjöblad highlighting growth in Asia as a key reason for continued confidence over the next 12 months.

Net sales for 2016 amounted to SEK534.7m (US$60m), an increase of SEK 51.5m (US$5.7m). This represented an 11% year-on-year rise, or 9% excluding foreign exchange effects.

“Looking back at 2016, we can only feel satisfied. With sales growth of 9% excluding foreign exchange effects, we were able to pass the half billion mark and achieve annual sales of SEK534.7m,"​ said Sjöblad.

“This enabled us to increase our market shares despite the fact that the sales to Brazil, one of our most important markets, were low as a result of the inventory build-up during 2015.”

He pointed to recent deals in Japan and Thailand as good signs for the next 12 months.

Our strong financial development, while we were building a platform for future growth and signing new distribution agreements in Japan and Thailand, demonstrates the strength of our business model, our employees and our products, and gives us reason to look to the future with continued confidence,”​ he added.

In Japan the firm signed two major deals with Nippon Kabaya Ohayo Holdings Inc. 

The first agreement concerns the exclusive rights to sell probiotic supplements with BioGaia’s patented strains of Lactobacillus reuteri​ at drugstores, supermarkets and similar outlets.

Depending on the product category, products will be sold under Kabaya, Ohayo and/or BioGaia brand.

The other agreement is an exclusive license, giving Ohayo Dairy Products the rights to use strains of Lactobacillus reuteri​ in food, such as drinks and dairy products.

Meanwhile in Thailand, the company sealed a deal with Abbott to commercialise its probiotic products in the country.

The products will be co-branded under the BioGaia and Abbott brands.

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