Business Overview

Nutritional Choice Australia Pty Ltd (“NCA”) owns a milk powder mixing, packaging and wholesaling business with a range of products for sale in Australia and internationally.

NCA owns a number of brands that were developed by Chinese companies and will now be used to complete production runs for those customers for sale online and, following receipt of a Chinese import approval, direct export for retail sale in China.

NCA produces various iterations of:

• Milk powder

• Infant formula

• Flavoured milk powder

• Adult nutritional powder

• Protein powder

• Whey powder

• Colustrum powder

Demand for these products is exceptionally high in China and within Chinese communities worldwide.  In addition, new markets such as the middle-eastern countries are showing increasing demand for high grade milk powder products.  The prices charged for Australian and New Zealand milk powder products in international markets are 2 – 3 times higher than can be achieved locally, making export significantly more attractive than production for domestic markets.

NCA has the capacity to produce 864 containers per annum (at 48 weeks x 6 days), each of 17,772 x 900g tins.  NCA’s factory is highly automated and requires only supervisory and logistics staff to operate.  NCA has low fixed costs of just under $2.8 million per annum (inclusive of premises and equipment rental payments and employment costs) and has a break even point of $10.4 million in gross sales (around 52 containers, depending on product mix).

NCA has budgeted for 2015 calendar production of 390 containers with a gross sale value of $83.26 million (exclusive of GST) and a gross margin of $21.32 million.  This represents just over 45% of NCA’s current production capacity. All customers pay deposits prior to production commencing and pay the balance prior to despatch of goods.

Investment Opportunity

This opportunity is available to sophisticated investors only.

NCA is willing to entertain interest from strategic investors at two separate levels:

  • equity participation in NCA at a minimum of 20% / $2 million to a maximum of 50% / $5 million
  • debt finance provided via a convertible note with a coupon rate of 12% per annum, capitalised for 3 years, and an option to convert to ordinary equity on terms to be negotiated.