UK life sciencies stock ProBiotix Health [AQSE:PBX], which specialises in probiotics to support cardiometabolic health, has secured what it is calling an important new supply agreement in East Asia.
The company has entered into a material and exclusive long-term partnership agreement with Kemin China Technology which will allow KCG to sell the ProBiotix proprietary probiotic strain LPLDL as a cardiometabolic health supplement ingredient in China, Hong Kong and Macau.
The parties retain the opportunity to discuss expansion into other regions, driven by Kemin’s global commercial operations. ProBiotix will supply its raw materials in bulk to KCG, whereupon LPLDL will be marketed and sold under a co-branding arrangement.
Significant market for ProBiotix
This looks like a significant market opportunity for ProBiotix – the company will continue to retain the rights to sell finished formats under its own brand or as private label in China.
Access to China’s huge healthcare market should be a very positive move for ProBiotix. The overall market in China is valued at $1.5 trillion, making it the second largest in the world after the US. It is also rapidly growing, with double digit growth over the last decade.
Importantly the Chinese government has rolled out a Healthy China initiative, a 10 year program to improve overall public health in the country.
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Demand for probiotic supplements in China
Over 330 million people in China are affected by cardiovascular disease, with two out of five deaths caused by the condition. The Chinese probiotic supplement retail market, was valued in 2024 at $2.3 billion, and is projected to reach $3.6 billion by 2028, a CAGR of 12.8%.
The parent company of KCG is Kemin Industries, a multinational international ingredients supplier. Founded in 1961, Kemin is headquartered in Iowa in the US, has revenues in excess of $1 billion, and has more than 500 patents and applications.
As a global leader, Kemin operates in over 120 countries, and from more than 15 manufacturing facilities worldwide. Its nutrition and health activities are focused on providing functional ingredients sourced from plant-based, natural sources for functional drinks, food and supplements.
Steen Andersen, CEO of ProBiotix, explained further:
“With the huge prevalence of cardiovascular disease in China, we are delighted to have secured this important, long-term collaboration with KCG, which should provide a significant and sustainable revenue stream to both companies. It provides scope to expand our sales of LPLDL in what is a key market for us, through a well-established partner with a strong industry brand. It also complements the recent agreement between ProBiotix and Dancare, who sell and distribute finished products.”
Andersen said that ProBiotix continues to see ongoing momentum in the business.
The cooperation deal not only realises the strong combination of technological advantages of both sides, but also the firm practice of KCG’s own “healthy China” strategy.”
According to Chris Liu, a senior portfolio manager with Invesco, who specialises in China: “The traditional Chinese medicine sector is also becoming more interesting as government rolls out policy initiatives including market liberalization, improved manufacturing standards, and efforts to foster talent cultivation and international trade.”
This should help ProBiotix as it feeds demand for health supplements in China.
