OptiBiotix Health forms operating subsidiary in India

The AIM-traded firm said OHI would manage the purchase and sale of ingredients and final product manufactured and sold in the country, increasing operational efficiency and partner engagement.

It said such operations were “highly challenging” without a physical presence in India.

OHI would buy ingredients from its manufacturers, sell to product manufacturers, and then buy and sell the final product through partners, deriving value from all parts of the supply chain.

OptiBiotix said that would result in greater sales at improved margins, and if successful, make a “significant contribution” to revenue growth.

The ability to sell both ingredient and final product would lead to a double impact on revenues, the board said, and would allow OptiBiotix to protect its brands from the risk of ‘commoditisation’.

OHI would also be able to benefit from reduced or negligible import, export, and general sales taxes, which would be charged in the absence of a local company presence.

The formation of OHI would allow OptiBiotix to migrate existing profit-sharing agreements to manufacture and supply agreements.

That, the board said, would allow the company to manage and extract value from all areas of the supply chain, to better exploit the market opportunity India represented.

“We are pleased to announce the setting up of a subsidiary in India, a country we have identified as of strategic importance for its high growth potential and access to Asian markets,” said chief executive officer Stephen O’Hara.

“This is all part of our plans to grow sales, margins, and product ranges with new and existing partners in key strategic markets.

“Establishing a physical presence allows us to maximise the potential opportunity in this market and and if successful make a significant contribution to future sales growth.”

At 1315 GMT, shares in OptiBiotix Health were up 0.42% at 48.2p.