Healtheries to gain more mussel power

By DITA DE BONI

Health-food and dietary-supplement company Healtheries of New Zealand is set for an earnings boost with its purchase of Avondale-based mussel extracts manufacturer McFarlane Laboratories.

The purchase will add around $4 million to Healtheries' coffers and expand the company's own small line of marine extracts.

Healtheries estimates annual sales will grow to more than $40 million when the McFarlane business is added at the end of next February, but will not disclose the cost of the deal.

Integration of the two businesses has yet to be decided, but it is expected that McFarlane's 26 staff will stay on to operate the company's Avondale plant and extraction machinery - unique in New Zealand for the "cold-opening" and freeze-drying of the mussel flesh.

Privately owned Healtheries has around 60 per cent of the domestic market in health foods and dietary supplements. Exports of milk products to Asia and marine extracts to Europe make up 30 per cent of its business.

McFarlane exports 75 per cent of its mussel extracts, powders and other marine byproducts to Europe and South-east Asia.

The company's flagship brand, Seatone, is a world-renowned anti-inflammatory used to ease arthritis, and Britain's top-selling mussel extract product.

McFarlane Laboratories evolved from the business of entrepreneur Stuart McFarlane, who pioneered the lucrative green-lipped mussel industry in the 1940s.

Mussels and related products now bring in $100m in export earnings for New Zealand.

McFarlane Laboratories was set up in 1983 to develop mussel extracts and marine byproducts. It grew rapidly with Seatone's success and heavily publicised research into applications of the native green-lipped mollusc.

McFarlane managing director John Ryan says demand for mussel-based remedies is ever-increasing and the company needs a bigger funding base with which to expand.

"The business reached the point at which it needs to be run by other people who have more resources, more staff and more back-up.

"It will be very exciting because both [McFarlane and Healtheries] are New Zealand companies and there will be an expansion of business, and possibly greater employment opportunities."

Mr Ryan - who, with marine researcher John Croft, will stay on as a consultant - says the company received a plug during Lyprinol's brief hype as a cancer cure-all because Seatone contains around 10 per cent of the oil.

But he stresses the company has not gone down that path and could increase earnings through anti-inflammatory applications alone.

Healtheries managing director Sarah Kennedy concurs, saying that extracts have a wide variety of uses, such as the recent move by margarine makers to add another marine extract - Omega-3 - to their products.

Although not sure if the Seatone product will bear the Healtheries label, she says other synergies between the two businesses will benefit both lots of products.

"By joining forces, we can capitalise on each other's export market strengths and distribution channels.

"With McFarlane's proven intellectual property and research and development expertise in marine products, we can also create new, clean, green products with specific natural health benefits."