Suvo Strategic Minerals Ltd (ASX:SUV) has made its first foray into the highly lucrative pharmaceutical-grade hydrous kaolin market, executing a sales agreement with Belgian company Fagron.
The sales agreement covers 300 tonnes of pharmaceutical-grade kaolin to be supplied over three years and is valued at A$588,462.
Fagron is a major pharmaceuticals company, having generated €763 million in turnover in the 2023 financial year supplying medications to pharmacies, hospitals, clinics and directly to patients.
Pharmaceuticals garner premium pricing
“Achieving a 14% growth in sales in the December 2023 quarter and subsequently signing up five new customers from the start of the 2024 calendar year, is testament to the work of the sales and marketing team,” Suvo Strategic Minerals interim CEO Bojan Bogunovic said.
“The pharmaceutical industry commands premium pricing for the company’s premium products as we look to work with Belgian company Fagron and expand sales beyond the Americas and into the European pharmaceutical market.
“Other significant buyers of kaolin in Asia, some of which occupy end-user markets where orders are measured in the thousands of tonnes for more industrial applications, continue to test the Pittong kaolin for quality and suitability and our primary goal remains to continue increasing sales following the recent plant upgrade at Pittong.”
Under the sales agreement, Suvo’s hydrous kaolin will be sold to Central de Drogas, SA de CV, a wholly owned subsidiary of Fagron and the leading supplier of raw materials to compounding pharmacies and the pharmaceutical industry in Mexico.
Fagron owns compounding facilities globally, with facilities in Europe, Israel, the United States, Colombia and South Africa and is active in 30 European countries as well as the Middle East, Africa and the Americas.
Suvo says it has samples with more than 20 other potential customers throughout the Asia Pacific, who continue to test samples from the Pittong Operation in Victoria.