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Taking New Zealand to the World: Why Exporting Matters by Karl du Fresne (published by Business New Zealand) 4 December 2007 Look up bile in the dictionary and you’ll see it described as “a thick yellowish-green alkaline liquid produced by the liver, stored by the gall bladder and secreted into the duodenum, where it plays a major role in the digestion of fats”. Few substances could sound less appealing, but in fact animal bile is a profitable by-product of the meat industry, containing valuable biochemicals that are used in the manufacture of pharmaceuticals. Since 1971 New Zealand Pharmaceuticals, a company based in the Manawatu countryside at Linton, near Palmerston North, has been extracting and purifying those biochemicals and exporting them around the world. Established with just two staff, it now employs 100 people and has a market value of more than $100 million. Sales growth in new products and new markets saw staff numbers increase by nearly 50 percent between 2004 and 2007. NZP is an example of science and technology adding value to a traditional by-product of New Zealand’s land-based industries and taking it to a higher level – exactly the strategy economists advocate as the route to greater national prosperity. Before 1971, bile from cattle slaughtered in New Zealand freezing works was shipped unprocessed to France. But encouraged by the government of the day, which was worried by Britain’s looming entry to the European Economic Community and the potential impact on New Zealand’s meat industry, meat companies began exploring ways of adding value to their products by further processing. NZP, originally a joint venture between a consortium of meat companies and Tasman Vaccine Laboratories, came about as a result. Within 15 years it had become one of the world’s leading suppliers of bile extracts, which are used in the manufacture of pharmaceuticals. These include cholic acid, used for the treatment of gallstones and liver disease, and deoxycholic acid, a key ingredient in anti-inflammatory steroids. Other NZP products derived from cattle bile include taurine, a nutritional supplement used in infant formula. Virtually everything NZP produces is exported, mainly to Japan, the United States and Europe. Ironically, the company has long outgrown the local supply of cattle bile and now imports 10 times as much bile as New Zealand can supply. Bile extracts remain its core business but it also manufactures products obtained from other animal tissues, such as a wound-healing substance extracted from cattle windpipes and an anaemia remedy obtained from horse spleens. NZP has also diversified into plant extracts, including an enzyme from kiwifruit that is sold to Japan as a breath-freshener, and a subsidiary company named Just the Berries exports a range of antioxidants extracted from South Island blackcurrants. The company has close relationships with Massey University, which is virtually next door, and government-owned Industrial Research Ltd. In a strategic partnership with the latter company, NZP has moved into the rapidly developing field of glycotherapeutics, which involves the production of carbohydrate compounds for use in drug treatments for cancer and heart disease and is seen as a key growth opportunity. These are manufactured in a high-tech $10 million unit opened in 2007. Managing director Dr Richard Garland, who began his career with NZP, says the firm has benefited from New Zealand’s image as clean, green and disease-free – a big plus when northern hemisphere countries have had to contend with outbreaks of foot and mouth disease and BSE (mad cow disease). The company has been through several ownership changes – it was once a subsidiary of the multinational chemical company ICI – but was bought by NZP’s management and staff in 1998. More recently the private equity firm Direct Capital acquired a 51 percent share. The acquisition by staff of a direct ownership stake had a positive effect on the workplace culture and the company has enjoyed a very harmonious relationship with the two unions represented on the site. Health, safety and the environment are cornerstone values and the rewards from the company’s performance are shared around – as in 2001, when the entire staff was shouted a long weekend on Australia’s Gold Coast to celebrate NZP’s 30th birthday. |
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New Zealand Pharmaceuticals Ltd wins Agritech, Life Sciences and Biotechnology Exporter of the Year Award
November 15, 2007
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New Zealand Pharmaceuticals Ltd (NZP), a company that is experiencing rapid growth through the development of new, innovative products and new markets, has won the 2007 Agritech, Life Sciences and Biotechnology Exporter of the Year Award. The Award was presented to NZP at the New Zealand Export Awards in Auckland on 15 November. Agritech, Life Sciences and Biotechnology was one of seven sector awards, with the top prize, the DHL Supreme Exporter of the Year, won by IBEX Group of Companies. The Export Awards judges said NZP has continued to grow in difficult global trading conditions and has simultaneously improved and invested in their overall capability and capacity. “This is an exporting company that is responsive to its markets, is well led, and has the ability to transform and compete.” NZTE Chief Executive Tim Gibson congratulated the seven 2007 Export Award winners, describing their achievements as inspirational. “These companies represent a vibrant mix of successful export businesses; companies that have identified a gap in the marketplace and cultivated their point of difference to produce and distribute quality goods effectively in international markets, using a variety of business models. “We need to see more New Zealand businesses following their lead and operating internationally in order to increase our global business footprint. |
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“My congratulations to all the finalists in this year’s Awards and my thanks for your willingness to stand up and stand out among your peers in Export Year. You are inspired and inspiring.” NZP was formed in 1971 to extract and purify biochemicals from by-products of New Zealand’s meat processing industry, such as cholic acid extracted from bile, which is used in vaccine manufacture, drug delivery and as diagnostic ingredients. Commercial Manager Mike Callagher said to this day cholic acid remains NZP’s core export product, enjoying a global leadership position built on quality and service. The Palmerston North firm recognised early on that diversification would be a key driver of growth, and in the 1990s refocused its market development onto plant extracts. “Our Just the Berries branded blackcurrant products aimed at the international functional foods sector are now bringing the much awaited returns, with a three-fold increase in sales over the last 12 months,” said Mr Callagher. “We’ve also been working closely with an Australian company to bring a range of seaweed extracts to the market, which has seen significant increases in sales over the past year.” NZP’s other big focus has been the burgeoning niche of synthetic biopharmaceuticals. Its symbiotic relationship with the carbohydrates team at Crown Research Institute Industrial Research has enabled the successful commercialisation of this novel technology, allowing NZP to establish niche products with applications in treating cancer and heart disease. The development of the synthetic carbohydrates market provided the commercial basis for NZP’s new $10 million specialty manufacturing facility. This has given NZP a platform to accelerate its export growth rapidly, providing the firm with much greater operational capability and advanced compliance levels. Today NZP exports 99 percent of its products and has more than 150 customers in 30 countries across the globe, including eight of the world’s 12 largest pharmaceutical companies. A rapidly growing, medium-sized New Zealand firm, Market Development Manager Selwyn Yorke said the foundations are now in place for NZP to achieve annual export sales of $100 million within the next 10 years. More information on all of the finalists including images is available at www.exportawards.co.nz |
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22 March 2007
From New Zealand Trade and Enterprise - Success Stories
New Zealand Pharmaceuticals (NZP) is a leading New Zealand biotechnology company, manufacturing and exporting pharmaceutical ingredients and diagnostic products for major global pharmaceutical and biotech companies, and producing a range of dietary supplements.
NZP is well connected globally, exporting almost all of its products to more than 150 customers in 30 countries around the world. 
Its product line up includes direct pharmaceutical ingredients such as digestive aids, antiviral agents and drug delivery agents, as well as a range of biochemicals and natural extracts for the international health food, cosmetic, biotechnology and aquaculture industries.
The company was originally formed, in 1971, to extract and purify biochemicals from by-products of New Zealand’s meat processing industry. This includes cholic acid, extracted from bile, used as a pharmaceutical intermediate in products to treat liver complaints.
NZP Managing Director, Dr Richard Garland, says cholic acid was one of the company’s first products and demand for it continues to grow, with sales accounting for almost half the company’s export revenues. NZP is one of the three largest producers of cholic acid in the world.
As well as continuing with its core business, NZP has also moved into manufacturing carbohydrate compounds for a promising range of new drugs to treat cancers, heart disease and other life threatening diseases.
It recently opened a NZ$10 million speciality products facility in Palmerston North. Dr Garland says this gives NZP the capability to manufacture a wide range of specialty carbohydrates on a significant scale, and the means to become a key niche player in the global market,
NZP’s exports of the new specialty carbohydrates have the potential to grow in value to NZ$50 million over the next five to ten years.
Underpinning this new direction for NZP is a close working relationship with the glycotherapeutic research team at Industrial Research Limited, one of New Zealand’s nine, government-funded Crown Research Institutes. Glycotherapeutics, which offer a new and more effective delivery mechanism for drugs, is experiencing growth rates of nearly 20 per cent a year with excellent long term growth expected.
The Industrial Research team, led by Dr Richard Furneaux, has a long established reputation in the development of novel carbohydrate compounds for big pharmaceutical companies, and has several intellectual property arrangements with NZP which assist it to cost effectively produce the carbohydrate-based building blocks required to make the new drugs.
“The new specialty products facility is crucial to our ongoing success,” says Dr Garland. “Good Manufacturing Practice is the key quality standard for NZP and an essential element in the acceptance of our products in pharmaceutical and biotechnology markets. The new plant gives NZP the platform to take business to a new level, enhanced operational capability and advanced compliance levels.
Dr Garland says during its 36-year history, NZP has built a reputation as a reliable producer of high quality products. This is further strengthened by the international recognition of New Zealand’s ‘clean, green’ and ‘disease-free’ status.
Broadening its product portfolio has been an ongoing focus for NZP and, in addition to specialty carbohydrates, the company is also diversifying into the development of plant extracts. Its unique product lines include a range of blackcurrant extracts under the brand ‘Just the Berries’ which are being successfully marketed in the Japanese functional foods market.
NZP is owned by private equity firm Direct Capital and NZP management and staff. It is ranked in the New Zealand top 500 list of companies and has a market value of more than NZ$100 million. The company employs 100 people at its production site in Palmerston North.
Key export markets are Japan, the United States and Europe with opportunities in India currently being explored.
Dr Garland says NZP is able to compete with lower-cost manufacturers like China and India by focusing on high value specialised niche products that its customers need.
“It’s a key differentiator we have as a business and New Zealand has as a country. We don’t often need huge economies of scale that other international businesses believe are necessary. We can accept what may look like a small scale business, but which has potential to develop. One of our competitive advantages with new products is speed to market and the fact that we are flexible and responsive.”
He says NZP nurtures its client relationships, regularly visiting top customers and using agents around the world.
New Zealand Trade and Enterprise (NZTE) has worked closely with NZP in recent years, providing funding to help with the design and consultancy for its new manufacturing facility, market development grants and including NZP in trade missions to Europe, the US and Australia.
In 2005, NZP won New Zealand’s first technology makeover contest, sponsored by Microsoft and Hewlett Packard. NZTE identified NZP as its first ‘Pathfinder’ company – a leader in its field with the ability to create further wealth in the community by taking new products to international markets. In 2006 NZP was a finalist in the NZTE Export Awards.
22 February 2007
New Zealand is sealing its success in the drug development world by opening a purpose built facility to produce carbohydrate compounds for a promising range of new drugs to treat cancers, heart disease and other life threatening diseases.
The $10 million Specialty Products Facility is the largest single investment in the 35 year history of New Zealand Pharmaceuticals Limited (NZP).
This new factory is a new beginning for NZP and the beginning of a new industry for NZ,” says Richard Garland, Managing Director of NZP.
NZP is already an established manufacturer of biochemicals and is one of the three large producers of cholic acid in the world. Its customers include the leading global pharmaceutical and biotechnology companies. More than 99% of production is exported.
“This investment opens new horizons for the company,” Dr Garland says.
“It gives us a toolset to manufacture a wide range of specialty carbohydrates on a significant scale and the means to become a key niche player in the global market.”
Initially, the facility will manufacture a carbohydrate mainly for American and Japanese pharmaceutical companies while a further range of products is developed.
NZP’s exports of specialty carbohydrates are expected to exceed $5 million this year and have the potential to grow 10-fold over the next five to 10 years.
Specialty carbohydrates are a key ingredient in glycotherapeutics, a new and more effective delivery mechanism for drugs, which are experiencing growth rates of nearly 20 per cent a year and are expected to experience long term growth.
New Zealand Trade & Enterprise identified NZP as its first “Pathfinder” company – a leader in its field with the ability to create further wealth in the community by taking new products to international markets.
Underpinning NZP’s investment in carbohydrate compounds is a close working relationship with the world renowned glycotherapeutic research team at Industrial Research Limited (IRL), a Crown Research Institute.
The team, led by Dr Richard Furneaux at the GlycoSyn business unit of IRL, has a long established reputation in the development of novel carbohydrate compounds for big pharmaceutical companies. This is backed by projects with world-class research partners such as Albert Einstein College of Medicine in New York and biotechnology companies such as BioCryst Pharmaceuticals who have since progressed deals with Roche and MundiPharma.
“This is an exciting phase in the development of NZP. The marrying of IRL’s research and NZP’s production expertise is creating the competitive edge necessary in this sophisticated market,” Dr Garland says.
NZP is a privately owned company whose shareholders include private equity investor Direct Capital. The company anticipates an Initial Public Offering of Shares and a listing on the New Zealand sharemarket within the next 15 months.
NZP employs 100 staff at its production site in Palmerston North. Its main product is used for making drugs that treat liver disorders and it has a range of other biochemicals used as pharmaceutical ingredients, dietary supplements, and in microbiological and fermentation media that are supplied to leading pharmaceutical and biotechnology manufacturers around the world.