Mānuka honey maker Comvita has expanded into Singapore. Photo / NZME
Comvita chief executive David Banfield says the company’s $10.36 million foray into Singapore will boost its earnings.
Shares in the mānuka honey exporter rallied after the NZX-listed company announced that it had acquired specialist honey retailer HoneyWorld Singapore and its consumer brands.
Comvita said the debt-funded acquisition would improve itsearnings per share by 22 per cent in the full year 2024 and would drive a 24 per cent increase in its return on capital.
“It represents a highly strategic acquisition for us in a market that connects the world with Asia and Asia with the world,” he told the Herald.
HoneyWorld, founded in 1997, operates 18 outlets in the Singapore market, with forecast revenue in 2024 of more than S$13m ($15.85m).
Combined with its existing business in this market, Comvita’s market share in the mānuka honey category in Singapore will be around 50 per cent, the company said.
Together, Comvita and HoneyWorld have identified incremental opportunities to further grow household penetration and share of the category in this important market over time.
HoneyWorld is the largest mānuka honey retailer in Singapore.
“People in Asia have used honey as a medicine for thousands of years, so there is a market that is pre-disposed towards it.”
As it stands, the household penetration of mānuka honey in China and Singapore is less than 1 per cent, compared with 3.5 per cent in some of Comvita’s other markets.
“If we achieve what we have been able to achieve in some markets in China and Singapore - then there is significant room for growth. We just have to deliver it.”
The New Zealand mānuka honey sector has long argued that only mānuka honey made in New Zealand should be labelled “mānuka”.
However Australian honey interests opposed the move and this was recently upheld by the Intellectual Property Office (IPONZ).
Separately, Banfield said Comvita would continue to fight to have “mānuka” honey recognised as a New Zealand-only product.
“We are undeterred. We have to get protection for ‘mānuka’ species from Aotearoa.
“Our commitment remains undiminished and we will continue to make sure that we do everything possible to get the right protection for ‘mānuka’.
“And underneath that, making sure that consumers get the quality of product that they deserve.”
By late afternoon, the company’s shares were up 16c or 5.26 per cent at $3.20.
Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.