Nutritional Growth Solutions starts sales in China and plans IPO

Nutritional Growth Solutions (NGS), which produces protein powder to help children’s growth, is planning to raise $5m to $7m from an IPO that will see its shares listed on the ASX in coming weeks.

The Israel-based private company, whose beverage brands include Healthy Height, is expected to go ahead with the IPO in August.

NGS expects to have a market cap on listing of A$25m.

The company manufactures a unique formula-based protein powder for children aged three to nine years that is consumed in beverages or smoothies.

The product grew out of research by clinicians at Israel’s Schneider Children’s Medical Centre into ways that nutrition can be used to boost the height of young people.

China sales

NGS is starting to diversify from its core market of America to other countries such as China.

The company has arranged a deal with a state-owned Chinese company to distribute its product in one region of the country. Other regions in China are to follow.

“We intend to launch product in China in coming weeks under its own Healthy Height brand and that will be packaged in New Zealand and shipped to China,” NGS chief executive Liron Fendell told Stockhead in an interview.

Sales targets for the year are yet to be finalised for China.

“We have a few strategies for China, one would be working with other distributors, the other would be doing online sales,” she said.

Chinese and other consumers appreciate the protein product is based on clinical research, according to Fendell.

“In our marketing we are showing clinical evidence that our products are unique,” she added.

China expansion

Over the next 12 to 18 months, the company wants to launch new products, starting with its core US market.

“We are looking to add more products to our pipeline,” Fendell said.

One new product is for older children aged over nine and up to teenagers.

A second product is a sports-type formula aimed at children involved in sports and young athletes to help their performance.

Existing NGS products are marketed under the Healthy Height and Horlicks brands.

Another growth driver for the company is to boost sales through retail and medical channels, including some health providers.

Overseas markets also feature in the company’s growth strategy.

“We see a lot of engagement and interest coming from China and other south Asian countries and we are working on potential deals in the region,” Fendell said.