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SeaDragon snares second contract

Last updated 12:16 20/06/2014

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Nelson-based fish oil company SeaDragon has secured a second major sales contract that will boost annual revenue to at least US$6 million (NZ$6.87m).

That is double last year's sales, and the listed company said the new deal would underpin its financial performance into 2016.

SeaDragon, Australasia's largest refiner and blender of fish oils, announced the contract yesterday, following its first major contract in May.

Chief executive Ross Keeley said the two contracts with two existing customers would combine for sales of more than $6.87m for the year following October.

The name of the customer and the terms of the second contract were confidential.

"This contract represents another significant win for SeaDragon and vindicates our decision to take bold steps to secure raw material for our squalene processing factory," Keeley said.

The Nayland Rd business employs 12 staff and would look to add six processing staff.

It expected to submit a building consent application for the new plant by Venice Place at the end of this month and apply for resource consent mid-July, with a view to commissioning it in March to May next year, he said.

Last March, the company announced it had signed a deal with Portuguese company Pescarias Cayon & Garcia LDA that would cover its raw-material supply for the next 12 to 18 months of squalene production.

The supply of shark livers and shark liver oil would arrive in August and October and again in January next year.

Shark-liver oils are said to strengthen the immune system, ease joint pain from arthritis, and maintain healthy skin.

SeaDragon had raised $6.1m earlier this year, of which $4m would be used to fund the development of a new plant in Nelson able to produce more than 5000 tonnes of refined fish oil and generate annual sales worth up to $50m.

Keeley said the two major contracts would not use all of the raw material supplies SeaDragon had secured.

As such, there was "considerable upside" for sales value and volume for the balance of the product which would be produced.

"We are now very well positioned for the current financial year and beyond and are looking forward to 2015 when the completion of our new oil refinery plant in Nelson will allow a major expansion in our range of omega-3 fish oil products," he said.

For the year that just ended March 31, SeaDragon announced a profit of $431,000, on sales of about $3m.

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- The Nelson Mail

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