CHAIRMAN’S STATEMENT
Dear shareholder,
I would like to thank you once again this year for the trust you have placed in Puleva Biotech at such a challenging time for all businesses due to the unfolding global economic crisis. I am convinced, however, that our company will emerge stronger at the other end.
2008 was key to shaping the future for our company. The acquisition and integration of Exxentia has meant a significant step forward in the development of a new Puleva Biotech. The outcome of the merger of both companies is the configuration of one of the most powerful players in the Spanish biotechnology field, armed with an extensive product portfolio and an increased number of target markets. The merger will also unlock synergies which will have a multiplier effect on the company’s value medium term.
We are therefore immersed in the integration process, which is well underway at the manufacturing level, with the execution of plan to concentrate activities in order to gradually raise efficiency.
To this end, we have invested significantly at the Talayuela (Caceres) and Granada facilities. The Talayuela (Caceres) facility has been equipped with cutting edge technology and will house the entire plant extracts business, while the Granada factory will house all probiotics and lipids production. Also last year we completed the works necessary to enable expanding Omega 3 production capacity fourfold. These initiatives have allowed us to dispose of the Lillo (Toledo) facility, thereby streamlining our productive capacity to the maximum. Already this year, the Board of Directors has given its blessing to the installation in Peñafiel of a new plant to make bioactive ingredients from plant extracts; these products will be focused on the treatment of cardiovascular disease, obesity, diabetes and other illnesses.
This raft of strategic decisions puts Puleva Biotech in an ideal position to adopt a more intensive sales and marketing policy. A sales and marketing policy which, without altering the broad brushstrokes shaping our performance during these last few years, will bring us much closer to the customer and bring us access to companies and international markets, offering a range of products in response to emerging food standards.
We already have an extensive product range, thanks to our applied research work in areas related to lipids, probiotics and plant extracts.
We are the international benchmark in the production and marketing of Omega 3, and are poised to emulate this leadership in a broad range of products targeted at the food, diet, pharmacological and animal nutrition segments. Our contribution to the companies seeking our services goes beyond the mere role of product supplier: we also provide a broad number of services ranging from research to consumer care. In short, we add value.
At times such as these, dominated by the unfolding economic crisis, we need to step up our efforts to reinforce the solid foundations of a company focused on research, development and innovation.
Puleva Biotech’s strategic focus clearly dovetails the strategic targets established in Spain’s VI National Plan for Scientific Research, Development and Technological Innovation for 2008-2011, sponsored by the Ministry of Science and Innovation, which sets five core strategic lines of initiative: health, biotechnology, energy and climate change, telecommunications and the information society and, lastly, nanoscience, nanotechnology, new materials and new industrial processes.
The Spanish government, in accordance with the targets set by the European Union in the so-called Lisbon strategy, formulated the 2010 Ingenuity program, an undertaking conceived to engage the state, businesses, universities and other public research bodies in a focused effort to raise Spain’s contribution on this front to the level befitting its economic and political clout in Europe.
One of the instruments put in motion by this program, specifically by public entity CDTI, is the CENIT program, whose aim is to intensify public-private initiative in the field of scientific research.
We are very proud that the PRONAOS project, spearheaded by Puleva Biotech together with 15 other private companies and 39 public research centres, including the main Spanish universities, the CSIC (Upper Council of Scientific Research) and other renowned research centres, has been included in the CENIT program.
The PRONAOS project will focus on scientific research applied to the development of the next generation of foods designed to help control weight and obesity. Unquestionably, leadership of a project of this scope also constitutes a public service responsibility in light of its public dimension and the number of organisations involved. Investment of €27 million has been earmarked for the project, of which €12 million will come from a CDTI grant, €11 million is being put up by Puleva Biotech and the rest by the remaining participating companies.
We have undertaken to work tenaciously and rigorously throughout the project towards the generation of satisfactory results, furthering research into the molecular mechanisms associated with obesity and identifying, developing and marketing new ingredients and products associated with weight control and the battle against obesity, one of the major public health issues facing society today.
2008 was not a good year for the Company’s stock, just as it was a dismal year for all equities. However, we have solid fundamentals and a sustainable equity story which leave us optimistic regarding the stock’s future performance.
I would like to finish up by saying that 2008 was a very intense year in terms of the integration of Puleva Biotech and Exxentia, putting in place the foundations for the future we all want for our company: to become nothing short of an international benchmark in bioactive ingredients.
I would like to thank our great team for their efforts and dedication and, of course, to thank you for placing your trust in us.
Gregorio Jiménez López
Chairman
