Food Revolution shares surge on sanitiser announcement

As the world battles the coronavirus, an announcement by a Melbourne company has put a rocket under its share price.

Commuters take cleaning gel for hands during a campaign for washing hands at the skytrain station in Bangkok. Picture: AP

Food Revolution Group’s shares have soared by 61 per cent after the company announced it would commence production of hand sanitiser in response to global shortages.

Formed under the recently formed Sanicare brand, the supply of hand sanitiser products will take advantage of the ballooning demand stemming from the global coronavirus outbreak.

Speaking to The Australian, Food Revolution chief executive John Florey said the majority of supply would be directed towards China initially, before turning to Australia as production increased.

“The demand for hand sanitiser has been quite incredible,” Mr Florey said.

“Talking about quantity that goes with the Chinese market is like asking how long is a piece of string – you just don’t know.”

At the close of trade on Tuesday, Food Revolution shares had jumped 61.4 per cent to 9.2c – the highest since May 2019.

Although the company generally manufactures a range of juices, fibres and waters, upgrades at Food Revolution’s Mill Park, Melbourne facility in December 2019 have enabled it to produce and bottle numerous products.

Mr Florey said the decision to produce hand sanitiser was only made two weeks ago, and credited his “nimble” team for turning things around quickly.

“When we looked at it, we have an all purpose bottling line, which we are just in the process of commissioning – why don’t we kick it off with hand sanitiser?” he said.

“It has been a monumental task.”

In a statement to the market, Food Revolution said its hand sanitiser products would be distributed through partner Careline Australia, which had received “unprecedented demand” locally and from China, and it expected “significant orders from its distribution partner imminently”.

Food Revolution’s recent factory upgrade included construction of a state-of-the-art 1260 sqm clean room and laboratory, providing the company with flexibility to cater to the demands of the Chinese market.

The rapid and widespread outbreak of coronavirus has caught suppliers of sanitation and safety products off-guard, as customers rushed to buy face masks and hand sanitisers.

On January 28, Sigma Healthcare – a major pharmaceutical retailer and supplier – told The Australian it had been working to ensure ongoing supply.

“Since [the coronavirus became public knowledge], we have experienced a significant increase in demand. This is due to the community pharmacy network increasing their holdings to cope with rising consumer demand,” a Sigma spokesman said.

Earlier this month, shares in hand sanitiser Zoono surged more than 35 per cent in one day after it announced it had agreed to develop a range of hand sanitiser products for the Chinese hotel and childcare sector. Zoono shares closed at $1.90 on Tuesday, having lifted its market capitalisation more than 55 per cent stronger since the announcement.