Australia
January 30, 2017

Highlights

• Finalising agreement with a major vegetable seed distributor to sell Abundant’s cucumbers in the Middle East and Asia Minor.
• Seed production in Australia and Chile set to increase stock levels for popular cucumber varieties, and new tomato lines undergoing trials and testing.
• Continuing development of our vegetable portfolio, including eggplant (aubergine), peppers (capsicum) and red chili's.
• Corporate cash balance of approximately $1.7 million at 31st December 2016, having maintained operational cash burn to less than $150,000 per month with the majority of costs associated with plant breeding which is recoverable from the Australian Government R&D assistance scheme. 

Abundant Produce Ltd (ASX: ABT), Australia’s only listed plant breeding company, is pleased to present its December 2016 quarterly report on business progress.
 
Business Development Update

Abundant’s business model is centred around developing vegetable plant IP (intellectual property) then earning royalties for each seed sold by distributors. Abundant  has been negotiating with one of the four major international seed houses for some time, and have successfully navigated their cucumber testing regime. As such, we expect to enter into a formal distribution agreement with regard to the Middle East and Asia Minor, in the near future. The distributor may elect to source seeds from Abundant, or produce their own seeds using our parental stock, or use a combination of the two in order to bring product quickly to market. In preparation Abundant is producing seeds in Australia and overseas to supply this contract.
Analysts value the 2016 global vegetable seed market at USD 8.77 billion, growing at 8% annually and projected to reach USD 14 billion by 2022. Primary drivers for this growth are demand for nutritional food, and innovative new, improved varieties… the types that Abundant is developing.
 
Chilean Production

Producing seeds in Chile provides Abundant with seed stock ready to sell to global distributors. Chilean production is cost effective, the environment is relatively disease free, and seeds can be readily shipped to our customers anywhere in the world.
Parental lines being grown in Chile will be ready in March this year, assisting Abundant to generate cash flows more quickly than would otherwise be the case. Abundant staff will visit Chile to see what further production can be achieved with other varieties.
 
ASTA Conference

This month, Abundant staff are attending the American Seed Trade Association’s 56th Vegetable and Flower Seed Conference, for four days of networking with nearly 900 seed industry professionals from more than 20 countries. Meetings are being arranged with distributor representatives, promoting Abundant cucumbers and tomatoes.
This follows our attendance at the Asia and Pacific Seed Association (APSA) conference in Seoul last year, which generated strong interest from distributors, potentially opening up  new markets for Abundant in India and Asia Minor.
 
New Taste Tomatoes for Australia

We are delighted to announce that we have commenced initial trials with a major Australian distributor. During these trials our tomatoes will compete head-to-head with a range of other varieties being offered to Coles and Woolworths. These trials will, of course, be extensive and take some time to complete but the potential returns are substantial.
 
Completed Greenhouses Mean More Plant IP

The new greenhouses are now fully operational and this allows us to develop more plant IP within existing cucumber and tomato crops and together with the hiring of two new plant breeders --  to accelerate eggplant, capsicum and chilli breeding programs. These programs had been paused temporarily while we acquired the necessary space and human expertise. We now have the resources in place for our Chief Scientist Dr Nabil Ahmad to develop more plant IP whilst continuing to improve what we already have: better cucumbers, tastier tomatoes, and more uniform vegetables with Abundant yield and the ability to withstand a harsh and changing environment.
 
Corporate cash flow

The Company’s cash balance on 31st December 2016, was $1.682 million. Management continues to focus on spending on Plant IP development and marketing of Abundant seed;  budgeting to maintain  quarterly operational cash burn to only $450,000 maximum spend. During the September quarter, Abundant lodged its Research and Development Expenditures and management expects to receive a return of approximately $200,000 rebate in the March 2017 quarter.
 
About Abundant Produce Ltd
 
Abundant Produce Ltd (ASX: ABT) is Australia’s only listed agricultural intellectual property development house. Based in Sydney and Cobbitty, New South Wales, the Company breeds superior vegetable seeds at the University of Sydney’s Plant Breeding Institute, Cobbitty.
 
Abundant Produce specialises in breeding hybrid greenhouse vegetables with better yield, disease resistance, temperature tolerance, taste, texture, colour and shape. The Company develops innovative products that target the gap in the market for highly productive food crops that thrive in low-tech conditions.
 

Website: http://abundantproduce.com/

Published: January 30, 2017