In mid-December a liquidator was appointed for Tauranga-based TRG Natural Pharmaceuticals, previously HoneyLab, while receivers were appointed for Mānuka Bioscience in late January.
The companies have been active in the natural ingredients market utilising the likes of kānuka oil and honey as ingredients to treat skin conditions for anti-aging ingredients in beauty care products.
Mānuka Bioscience’s second largest shareholder and chairman Wayne Wright is one of the country’s NBR rich-listers with estimates his family wealth sits at $400 million.
Newsroom reports he is also the company’s largest single debt holder, with his finance company WFT providing a $3 million three-year facility, over which receivers were appointed in January.
Meantime, TRG Natural Pharmaceuticals’ liquidation was triggered by investor Shaun Holt, with the company owing $839,000 to secured creditors and a further $397,307 to unsecured creditors. This includes $368,000 to trade creditors.
The position of the companies has thrown uncertainty around the emerging biological pharmaceutical market in New Zealand. They accompany issues last year emerging from the multi-startup medicinal marijuana market that resulted in the failure of Cannasouth.
Mānuka Bioscience has been held up by the Treasury’s NZ Export Credit Office (NZEC) as a case study company that had the office’s support to expand its export operations through greater funding security, guaranteed by the office.
Farmers Weekly understands TRG has a joint venture with an East Coast iwi group providing the land resource for sourcing kanuka.
Mānuka Bioscience has also partnered with local iwi in the East Cape district, with Tanitaki Ahu Whenua Trust and Nepia Hona Lands Trust listed as partners.
East Cape mānuka formed 40% of the company’s oil production.
Both companies received grants from the Callaghan Institute, with Mānuka Bioscience being granted $350,000 and TRG $201,000.
Craig Bunt, University of Otago professor in agricultural innovation has followed the evolution of medicinal marijuana and botanical focused companies.
He said the companies’ failures were indicative of NZ’s poor record when it came to transferring science and research into sustainable commercial outcomes.
“Much of the funding in NZ is all linked in some way to government support, so when these companies fail it makes it look like government is no good at supporting winners.”
NZ’s tyrannical distance also played a role in an intensely competitive global startup environment.
“If these companies were in Singapore, Australia or United States for example they would be so much closer to their clients.
“You really have to have that camp overseas, or be prepared to get on a plane most weeks.”
He also lamented a reluctance in NZ for investors to be prepared to fork out for business class travel over the vast distances needed to be travelled.
NZ was also compelled to find unique “NZ” products like kānuka oil, rather than emulate the likes of lavender or rose oil production which can be done elsewhere in the world on far vaster scale.
“But it can take a generation, not a five-year investment time line, to convert consumers to these unique products.
“Iwi see that multigenerational timeline, but looking at ROI and funding cycles can be a quick way to a hiding.”.....The full article can be read HERE
Richard Rennie is a rural journalist and has been involved in farming.
Mānuka Bioscience’s second largest shareholder and chairman Wayne Wright is one of the country’s NBR rich-listers with estimates his family wealth sits at $400 million.
Newsroom reports he is also the company’s largest single debt holder, with his finance company WFT providing a $3 million three-year facility, over which receivers were appointed in January.
Meantime, TRG Natural Pharmaceuticals’ liquidation was triggered by investor Shaun Holt, with the company owing $839,000 to secured creditors and a further $397,307 to unsecured creditors. This includes $368,000 to trade creditors.
The position of the companies has thrown uncertainty around the emerging biological pharmaceutical market in New Zealand. They accompany issues last year emerging from the multi-startup medicinal marijuana market that resulted in the failure of Cannasouth.
Mānuka Bioscience has been held up by the Treasury’s NZ Export Credit Office (NZEC) as a case study company that had the office’s support to expand its export operations through greater funding security, guaranteed by the office.
Farmers Weekly understands TRG has a joint venture with an East Coast iwi group providing the land resource for sourcing kanuka.
Mānuka Bioscience has also partnered with local iwi in the East Cape district, with Tanitaki Ahu Whenua Trust and Nepia Hona Lands Trust listed as partners.
East Cape mānuka formed 40% of the company’s oil production.
Both companies received grants from the Callaghan Institute, with Mānuka Bioscience being granted $350,000 and TRG $201,000.
Craig Bunt, University of Otago professor in agricultural innovation has followed the evolution of medicinal marijuana and botanical focused companies.
He said the companies’ failures were indicative of NZ’s poor record when it came to transferring science and research into sustainable commercial outcomes.
“Much of the funding in NZ is all linked in some way to government support, so when these companies fail it makes it look like government is no good at supporting winners.”
NZ’s tyrannical distance also played a role in an intensely competitive global startup environment.
“If these companies were in Singapore, Australia or United States for example they would be so much closer to their clients.
“You really have to have that camp overseas, or be prepared to get on a plane most weeks.”
He also lamented a reluctance in NZ for investors to be prepared to fork out for business class travel over the vast distances needed to be travelled.
NZ was also compelled to find unique “NZ” products like kānuka oil, rather than emulate the likes of lavender or rose oil production which can be done elsewhere in the world on far vaster scale.
“But it can take a generation, not a five-year investment time line, to convert consumers to these unique products.
“Iwi see that multigenerational timeline, but looking at ROI and funding cycles can be a quick way to a hiding.”.....The full article can be read HERE
Richard Rennie is a rural journalist and has been involved in farming.
6 comments:
One observation I have had from my travels is that Governments are very bad at picking winners and usually signals that you should short the industry.
The next two in the gun are solar and wind farms they exist only because energy is starved, an open market will see both fail as will happen in time regardless.
It may just be a further example of a bad idea.
Bill... Solar and wind hardware have quite a short life as well, maybe 20 years max. Nuclear please.
Maybe the firms were let down by marketing deficiencies; should have pushed as a cure for kauri disease; with maori connections they woud have been suppliers.favoured by official policy.
The DFC (Development Finance Corporation) used to be quite a winner in its time when common sense and being cautious in their speculation were solid. Sadly it too ended up in liquidation from bad investments and massive debts...History repeats whether we like it or not.
The only reason they were 'mainstreamed' was because of the government (read taxpayer) subsidies that were thrown at the foreign corporations that built them. Taxpayer loses again.
While I would always say avoid carrot farmers (eg hydrogen related businesses), in this case it appears there are otherwise sucessful business people involved. So something else going on apart from relying on govt grants.
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