Through its recently acquired Sun Asia Group, Invigor Group Ltd has secured a A$25 million per annum sale agreement for the supply of Australian produce into Asia. As a result, its shares opened 25% higher on Wednesday.
This is the first material contract since Sun Asia was acquired by Invigor on May 29, 2019, an event that resulted in the company’s shares doubling. Then there was news that it has been able to quickly deliver on the anticipated benefits of the acquisition.
The annual sales agreement has been negotiated at healthy margins, and payment for the product will occur before shipment. In terms of the agreement, the first $A2 million of Australian produce is contracted for delivery in the coming months.
Prominent Indian agricultural group
The customer is Mayuresh Protenz, one of India’s largest agriculture companies and it is a division of Indian conglomerate Mayuresh Group.
Mayuresh Protenz has supply agreements with a broad range of Asian customers and Sun Asia will supply products to these customers directly from Australia utilising the Smart Farm solution, comprising products including chick peas, table grapes, stone fruit and citrus.
In what would be an outstanding commercial arrangement, Mayuresh Protenz is considering making Sun Asia its exclusive Australian supplier. The sourcing of supply of Australian produce is a critical element of the Smart Farm division together with the establishment of distribution systems.