WNB surges 100% as it enters hand sanitiser market

By Trevor Hoey. Published at Apr 15, 2020, in Trev's Stock Tips

Shares in Wellness and Beauty Solutions Limited (ASX:WNB) commenced trading at 2.2 cents just after the company announced around midday that it had executed a binding heads of agreement to produce MICRO19 hand sanitiser products for sale.

The saying goes, ‘’what’s in a name’’, but WMB certainly nailed it with MICRO19 as this afternoon’s high of 2.3 cents represented a gain of more than 100%.

The HOA is with two private companies, Piggott Investments Pty Ltd and Glegra Pty Ltd.

The aim is to form an incorporated joint venture company, MICRO 19 Pty Ltd (JVCo).

JVCo was established to meet the strong growth and expected long term demand for quality, efficacious hand sanitiser products.

It brings together parties with extensive experience in the manufacture, plastics packaging, distribution and retail of personal care products.

WNB’s MICRO19 hand sanitiser product range is 100% Australian owned and manufactured with raw materials and packaging sourced through Australian suppliers.

Effective against 99.99% of germs

MICRO19 products are effective against 99.99% of germs and the range was developed in direct response to efforts to contain the spread of COVID19.

A leading pharmacy retailer has placed an opening order for MICRO19 and the company has received strong inbound demand from other retailers in Australia.

As previously announced, the range includes MICRO19 Hand Sanitiser Pump in 300ml in both peach/cucumber and lavender scents, MICRO19 Hand Sanitiser in 50ml bottle in both peach/cucumber and lavender scents, and MICRO19 Room and Surface Spray 300ml orange scent.

WNB has since extended the range to include MICRO19 100ml tube products, and the group anticipates that JVCo will have the ability to produce between 200,000 to 500,000 units a month across various pack sizes.

Molloy brings valuable experience from PPK Group

Molloy has a strong background in manufacturing, packaging and distributing fast moving consumer goods (FMCG) throughout his time at PPK Group which he originally founded in 1979 as Plaspak.

Glegra Pty Ltd is a company associated with Glenn Molloy who is the major shareholder in PPK Group Limited and Piggott Investments Pty Ltd is a company associated with Ralph Piggott.

Piggott is a highly experienced plastic engineer who, along with Molloy, has been involved in the plastics packaging industry for the past 40 years.

The entrepreneurs identified that the rapid spread of COVID-19 across the globe in recent months had created a supply shortage of raw materials, including quality Australian supplied Ethanol necessary for the manufacture of hand sanitiser.

WNB managing director Christine Parkes said, “The company used established industry contacts to secure an ongoing supply of Ethanol for the manufacture of MICRO19 and now, through JVCo, is able to provide continuous supply of both tubes and bottles of MICRO19 Hand Sanitiser.”

She noted MICRO19’s current products are cosmetic grade hand sanitisers and that JVCo is also developing products that meet the World Health Organisation (WHO) standard grade sanitiser requirements.

These requirements were detailed in the updated TGA Regulations published on 29 March 2020 to regulate the manufacturing of hand sanitisers for the period of COVID19.

The products will contain Ethanol 80%v/v (B.P) grade.

Increased use of sanitisers won’t be a blip

Parkes highlighted the anticipated long-term demand for sanitisers even as COVID-19 dissipates in saying, “Clearly there is an unwavering demand for hand sanitisers in the current environment and we are pleased WNB has been able to form a joint venture that brings together the brand development and manufacturing expertise of WNB and the expertise of plastics packaging specialists Glenn Molloy and Ralph Piggott to build MICRO19 into a trusted household name beyond the global COVID-19 pandemic.

"We believe this JV further demonstrates WNB's ability to identify a market gap in the beauty and wellness sector pivoting quickly to execute on a strategy to deliver value for our shareholders.

"We are also proud that we are able to make MICRO19 at a time of great community need whilst supporting local Australian businesses through this partnership."

Indeed, one would be surprised if the issue of personal hygiene doesn’t remain highly relevant in terms of preventing contamination, with near-term demand driven by the upcoming flu season and the next COVID-19 type breakout difficult to predict.

S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

Conflict of Interest Notice

S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.

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