Good morning, ladies and gentlemen. My name is Rupert Harrington, and I am the Chairman of Clover Corporation Ltd. I welcome shareholders and visitors to the 2025 Annual General Meeting of the company. The meeting is Webcast at the same time. We are holding a Physical Meeting from the offices of our Auditors, PKF, in Melbourne as advised in the notice of meeting. We are not recording using a visual medium at the AGM today. Please be aware the room today has ceiling microphones which are sensitive, so we ask all in attendance to remain silent unless they're asking a question. The Company Secretary has informed me that the quorum is present, and I therefore formally declare the meeting open. Thank you for your attendance in person and online. We're using the Computershare platform to host the meeting.
The platform allows shareholders, proxies, and guests to attend the meeting virtually. All attendees can watch a live webcast of the meeting. Only shareholders, proxies, and corporate representatives have the ability to ask questions and submit votes. Before we proceed, I would like to introduce you to other members of the board. I've got Ian Glassen.
Good morning.
Andrew Allibon, who is the Company Secretary. Peter Davey, Managing Director.
Good morning.
Greg Williams.
Good morning, everyone.
Simon Green.
Good morning.
Fiona Pearce.
Hi.
Tony Bradish is also online, who can't attend today, but she is attending virtually at this meeting. Also present is Ken Weldin and Tom Burton, representing our auditors, PKF. Ken and Tom will be available to answer questions on the accounts of the appropriate party. To attend this meeting, you have downloaded the links as supplied from the notice of meeting and entered the credentials provided to you that recognize you as a shareholder or proxy. Alternatively, you may have entered as a visitor or guest. I propose that the notice of meeting dated the 17th of October, 2025, which was mailed to shareholders, be taken as read. Before we proceed any further, I would like to discuss General Housekeeping around questions and voting. Questions can be submitted anytime during the meeting. Online, to ask a question in the app, press the Q and A bubble icon.
Please notice that while you can submit questions from now on, I will not address them until the relevant time in the meeting, either when the particular item of business is open for discussion or after the close of business, but before the close of the voting polls. I ask that in the interest of time and to realize as many questions as possible to be addressed, please try to keep your questions to a moderate length. Please also note that your questions may be moderated where we receive multiple questions on one topic. These will be amalgamated. By phone, if you wish to ask a question, please note the phone number on the Computer share platform and follow the directions to join the Verbal Question Queue. Please mute your Webcast if you choose to use this method to avoid audio feedback.
Finally, due to time constraints, we may run out of time to answer your questions. If this happens, we will answer them in due course via email and by posting responses on our website. In accordance with current practice, voting today will be conducted by way of a poll on all items of business. I will shortly open voting for all resolutions, and if you're eligible to vote at this meeting, a vote icon will appear. Selecting this icon will bring up a list of resolutions and present you with voting options. To cast your vote, simply select one of the options. You have the ability to change your vote up until the time I declare voting closed. This is shown at the bottom of the Vote Page, as noted on the slide.
In the unlikely event that we experience a loss of signal with the webcast, please do not log out of the application. We have a Backup Webcast Streaming running, which will automatically appear in the Computershare application within about 30 seconds of the initial loss of signal. Finally, voting on every resolution is held open until the end of the meeting. I will communicate when voting is closed. This concludes housekeeping on the questions of voting. Before we move to the formal business of the meeting, I would like to present my Chairman's address. Dear shareholders, 2025 was a strong year for Clover Corporation, and as many of you will recognize, a tale of two halves. The 1st half reflected the steady demand levels we experienced through the 2nd half of Financial Year 2024, with revenue of AUD 37.6 million.
The 2nd half saw a strong uplift of sales to AUD 48.4 million, driven by improved orders from our Human Nutrition Customers. We've had a particularly strong final quarter, with AUD 4 million orders brought forward as customers worked to meet demand and new product launches. The turnaround demonstrates the resilience of our business and the value of our Diversification Strategy. The combination of stronger sales, improved gross margins, and disciplined cost Management allowed us to strengthen our Balance Sheet and to continue reducing our debt throughout the year. Across the year, Clover achieved another step forward in performance. In Ecuador, the commissioning of our Fish Oil Extraction facility has been successful, producing excellent Quality Crude Oil and delivering secure supply and cost benefits to Clover and our partners. There remains significant room to further improve throughput, with cost and yield benefits to contribute to further improvements in our gross margin.
At Melody Dairies, we recorded our 1st full year of profit, a significant milestone driven by better planning, longer production runs of new products, and consistent dryer uptime. Whilst the facility is now operating close to capacity, we expect further efficiency gains and larger improvements as product mix continues to evolve. At our Australian refinery in Melbourne, operations continue to perform reliably, ensuring a consistent supply of quality oils. Whilst incremental margin gains for this refinery will be modest, it remains an essential part of our Vertically Integrated Supply Chain. We remain focused on managing input costs, particularly energy, as we scale our manufacturing footprint and prepare for future expansion. The return to normalized sales in 2025 financial year, combined with strong manufacturing performance, placed the company in a solid position to continue reducing debt. Clover continues to drive growth by expediting the Commercialization of Innovative P roducts.
Our new Distributor Model is progressing well, expanding our reach across North America, Asia, and Europe. Financial year 2026 will be an important year to demonstrate the benefits of this approach, not just to sales growth, but through new product launches and customer and market diversification. The Choline XL product remains one of our most promising Innovation Programs. This Free-flowing Powder offers a new revenue stream for Clover, targeting both Infant Formula, where Choline is mandated, and Prenatal Products, where it is used as an essential nutrient. Approval is expected through Labour in 2026 and beyond, but it's well in process, with Customers' Research, Development, and Trials progressing positively. To support expanded demand, we are exploring a range of solutions, including joint ventures and outright purchase of an additional dryer. Our Encapsulated Powders and Gel Form Products continue to advance through customer trials in high-value Nutraceutical markets.
These are long lead-time opportunities requiring shelf-life testing and regulatory approvals, where they represent meaningful medium-term growth potential. We're also progressing regulatory approval for Premneo in Australia, New Zealand, and Europe. A second round of trial results is under expert review, an essential step to obtain regulatory approval and to pave the way for market entry. In my address last year, I said we expected a return to normalized revenue patterns in financial year 2025. I'm pleased to report that this has been achieved. The final quarter of financial year 2025 delivered record sales, and as a result, we experienced a relatively slow start in the new financial year. However, I'm pleased to report trading is now showing continued growth and steady order flow. As a result, we expect revenues for the 1st half of 2026 to exceed those for the same period in the prior year.
On behalf of the Board of Directors, I extend my sincere thanks to shareholders for your continued support and to our employees and Management for the dedication and commitment throughout the year. I'll now turn to Peter, the Managing Director's report.
Thank you. It's a pleasure. Welcome every morning, everybody, to the Managing Director's report. I'm going to present the FY 2025 results with a bit of an outlook statement. I'm sure it will help everybody in the market. Our full year highlights in revenue, we were AUD 86 million, up 38% year- on- year. A nice return to the business that we were used to. Impact, AUD 7.1 million, up from AUD 1.5 million the year before. Operating expenses were AUD 15.7 million, up 22%, and that's really we were positioning the business for the growth and the additional sales we were starting to see through the market. EBITDA was at AUD 12.2 million, up from AUD 3.9 million the year before. Cash, AUD 8.9 million, still very strong. We hold a good strongest cash position at that point in time in our Balance Sheet.
Our final dividend was at AUD 0.01 per share, up from AUD 0.0075 the year before, as traditionally we tend to return money to our shareholders. The next slide, please. Some operational highlights. Record revenue year with new customers. We saw a velocity of increased sales through the business. We added significantly new customers as we sought new channels and new products going to the marketplace. Our existing Infant Formula Customers transitioned their business, and that was quite a significant shift for us. A lot of them have gone into the Adult Market, the Seniors' Market, and the Children's Market, away from the Baby Segment, realizing they have significant investment in both assets and brands, and they need to be able to utilize those. That has given us benefit with our products, and I'll talk a bit more as we go through that.
We've moved to a Distributor Strategy throughout the marketplace. For us to be able to open up new markets and segments, we've been traditionally very good at accessing the Infant Formula Market, but recognizing that we need to transition the business away from a reliance on that segment, we've appointed new distributors, some of which came on early, some of which have come on late. We'll continue to see the benefit out of those. We've appointed distributors in North America, Asia, Europe. That's certainly giving us better access to the marketplace, and that'll continue as we find new people to help represent us in the market. We applied for a patent for our Choline XL technology, which I'll discuss more with you. In terms of the Ecuador facility, it's a really good story.
Twelve months on from actually starting this facility, we achieved oil deliveries into Australia in November 2024. It is well ahead of plan. To build a Greenfield site and get it going so quick was a testament to some really good Management across the business in quite a difficult marketplace to do that. It now supplies 30% of our General Oil Supply. Our plan is to have it to supply 50% of our General Oil Supply. The quality of oil that we are getting out of that facility and the grade of the DHA and EPA that we get out of it is the world best. We are getting excellent quality of oil and it allows us to blend with other oils and get better value. Effectively, at this point in time, we have largely repaid all the debt. We have now paid all the debt back on that facility.
Melody Dairies, been a bit of a longer story. We started the build of this during COVID, you might recall, and it has been a bit slower to get started. Thankfully, during this year, we saw some really strong improvement in financial performance to deliver a small profit in the business. We operate this business to get the lowest absolute cost throughout the business, and we are seeing that reflected in the margins of the business. We have been able to increase production. It is now running 24/7. We have got a good Management team. We have made all the upgrades to the facility, and it is operating at absolute full capacity. I was there last week, and it is going extremely well. We added a little bit of CapEx into the business that does not reflect in our Balance Sheet, but it has really helped us get that facility to absolute full production.
We own 43.9% of that site, and we are the biggest customer on the site at the same time. We can move to the next slide, please. The P&L for the year delivered really strong revenue growth for the business. Europe and Asia were particularly strong as we moved our business into the Nutraceutical Segment and Food and Beverage. Infant Formula really did benefit us as well through Europe. It was not our focus, but Infant Formula Customers recovered quite well across the European markets after a couple of slow years. Our impact increased significantly, partly by new customers that have come on board, new products that we have given to those customers, and we have got a whole lot of new orders out of those customers that are giving us much better margins through the business with the new products.
Those new products gave us the margin, but also we've improved cost efficiencies through the business. Certainly, we're seeing the benefit of Ecuador Oil coming through the business and full production of Melody Dairies helped with our cost of goods. It's helped our bottom line. As Rupert pointed to in his address, the 2nd half was particularly strong. In Q4, we got AUD 4 million of orders that we didn't see coming. That's probably slowed the 1st half of this year because we brought forward a lot of sales. We've struggled to keep up with the orders that we've had going through the business since. Significant volume improvement, and that's reflected in our outlook statement as well. Operating expenses rose. We really are putting investment into people and into the business and some reward to be staged for the next stage of growth of the company.
It's nice to be positioning the business for a strong future. Next slide, please. I'll move on to the Balance Sheet. Good, strong Balance Sheet. Net assets are up year-on-year. We've increased in our working capital and reduced our borrowings quite significantly. Our cash position is very healthy. We have been spending a fair bit. We've got very High Trade Receivables that you can see from the Balance Sheet, but we've reduced our debt across the business. At that point in time, it was AUD 8.9 million. We have some lumpy purchases in the business, so we always need cash in the business to be able to make those purchases. Trade receivables have increased, really reflecting that we've got very strong sales momentum. We've reduced our inventory, improved our working capital. We've tried to demand lead our investment in our working capital.
It's a difficult balancing act, but we're able to get on top of it recently. Our non-current borrowings have been fully repaid, so that's really improved the gearing through the entire business. Next slide. I'm going to talk through a bit more about the business rather than the numbers. New products have been really driving the growth of the business. It's been a significant addition over the last year. A lot of that has been, if you've followed the business for some time, we've talked about innovation of the company and how much we've launched. What we've recognized probably in the last 12 months is the sales of the launches of those new products. We often refer to we introduce a new product to customers' need to trial it, learn how to use it, and go through Shelf-life Testing.
A lot of the benefit of that came out in the last year. A lot of those new products we've done over the last week, we've patented eight products over the last four years. In that, we're now seeing the benefit of those sales come through as customers start to utilize it and see the benefits they get in their business. I'm going to turn to the next slide. Just talk a bit about Choline XL. It's a new product that we've just applied for patents for. Choline is a product that is legislated to be used in Infant Formula. It's also used in a lot of Prenatal Products, Medical products, feed products, and Nutraceuticals, and general food applications as well. The actual product is a salt. It has significant issues associated with it in terms of its manufacturability.
It is Hygroscopic in nature, so therefore, if you put it in the atmosphere, it attracts moisture, turns into a wet, sticky product, and is very difficult in the manufacturing process. It's been legislated for use, so manufacturers have a significant problem, but a legal requirement to be able to use it. So we have invented a flowable Choline product, which we've termed Choline XL. It's a white flowable powder that is the same bulk density as milk powder. It's Non-hygroscopic. It flows perfectly. It can be used in production of any sort of products. We've had it on trial with customers. It's gone into things like gummies and biscuits and powdered drinks. It's performing very well under trial application so far. We haven't commercially sold this product. So we introduced it to a very select group of customers initially. They've done trials.
We've been talking to them about Commercial Arrangements on that, which is good. They all want it. We've got to be able to get to a production scale to actually produce it. We've applied for the patents for the technology, so we should get that globally. It's a lengthy process, but we've got protection around our patent now. We did a very soft launch of this in North America last week or last month at the largest food show in the world called SupplySide Global, and to absolute acclaim, customers that we showed this product to looked at it and just went, "Wow, you've actually solved a major problem. When can we have it?" It is a good story going forward. Our next issue that we need to face is getting the production capacity sure that when we do launch this product commercially, that we can meet demand.
We have very limited demand with our current capability, so we are talking to a variety of different providers that we could go into a top Manufacturing Arrangement, a joint venture, or an outright purchase of the facility to increase our production. We have got irons in many fires that allow us to get there. We would expect in the next six months to have a position where we can go into large-scale commercial manufacturing to have this product available to the marketplace. It takes some time for consumers, customers then to do their own trial work with it. I think it is a great product for the future, and we will see the whole Clover business expand its business considerably. If we can move to the next slide, please. Premneo. We have talked about Premneo for some time. It is an Emulsion Product that we created. Went through a large clinical trial.
The outcome of that is that it can increase the IQ of a Preterm Infant. We've got a fantastic result. Getting that approved by regulators is a very challenging exercise. We're trying to put a brand new product, a molecule, into a baby that's never been done. Getting it through regulatory has been challenging. We are confident that we will get there. It's currently going through some regulatory in the EU. We expect to hear from that shortly. We're also going through clinical trial work in India. There has to be proven for safety. We're going for trial work in both Singapore and Canada, which are marketplaces that when you get acceptance in those markets, they'll open up others. We've had extensive discussions with manufacturers in India to make the product so they can make it as a pharmaceutical grade or a Medical food product.
They open up a Distribution Channel that allows us to get into 38 different countries where this product would be sensibly well. We are down the track. Really, the piece that we have to get over is the Regulatory Approvals. We've got a great product. We've got the outcomes of it. We know how to make it. It's getting the regulators to say, "Yes, you can put this into a baby." That's the challenging part. I can understand. They're very cautious of that. It's a bit frustrating when you've got a product that you sell. On to adult and Infant nutrition. For us, the Global Infant Formula market has probably stabilized. We've seen a real good growth with some of our newer products.
We have talked in the past about our Hypoallergenic products, so products that do not have anything that has to affect the label, no protein that is going to affect the label, no fish. We have products that are very specific that will not impact a baby, and that is allowing our customers to create products that are different. We have higher levels of fortification that we can put into our products that then the consumer and our consumer, the customer, can use less of. That has given us new traction for new products in the marketplace. Many of our customers have found a way back into the China market. You may go back in time and see that there was a lot of regulatory change that occurred in the China marketplace. A lot of our Western manufacturer customers were challenged by that, did not find a way back in.
They didn't get licensed. Most of them have now found a way back into the marketplace. In the last 12 months, we saw a flip between the Western brands and the Chinese brands, where the Western brands have now overtaken the Chinese brands by volume of sales again. The consumer is voting in China to take the Western brands more than the Chinese brands, which we supply both. We don't really care who wins as long as we're in the product in the can at the end of the day. We're supporting both sides. The big change for us is we've been able to, over the years, our stable of products is significantly broader than any of our competitors in the marketplace. If you followed us, we have continuously innovated and invented. That's what this company is about. We don't sell a commodity product.
We sell unique products. We have a broad stable of different powders that can suit multiple different applications. You go to a competitor, you get one or two options. Us, you get 22 options. We can go into a whole range of different products that have allowed us to go and leverage different market opportunities. We're getting really good growth into those Nutraceuticals, sports, and seniors' nutrition, especially the seniors' market, which is obviously a growing market. The world is getting older. We've picked up significant business in that market, and that's where we really saw a lot of that pull forward, that AUD 4 million sales in the year prior. That was really going into the adult and seniors' nutrition market, not the Infant nutrition market. Over the next page. Going to some other products, a bit of a pipeline story.
In the highly concentrated part of the marketplace, we're getting some good traction with a product that we launched probably two years ago. We would have put it into one of these decks. It was a very highly concentrated. It's termed DPA. So it's an element of Omega-3. It helps with reduced inflammation within the body. We're getting some applications into Nutraceuticals at food. It's quite amazing, but it's a really strong growth marketplace for us. And then food for special Medical purposes. In fact, we're putting this product into a Cancer Drug that's being sold into China for cancer patients. The Gel Form product we launched some time ago. This is an evolving product. We are developing it, so it has a much higher concentrate of DHA and Omega-3s within the oil.
When you think of a product, you only have a limited space that you can put things into. You want to be able to put the least possible to get the highest outcome. We've been able to develop higher concentrates of oil that are now going to our Gel Form product and getting better traction with customers. They can put less in to get a higher Fortification Rate. It's the only product in the world that you can get high levels of Omega-3 into a UHT product. We've got good traction in the U.S. We've got a lot of trial work going on in the EU. In the Asian markets, we are going through regulatory approvals. Again, unique product. Most markets have never seen something like this before. They're trying to work out what is it, how do we position it. Is it a food?
Is it a Medical product? Is it a Nutraceutical product? We're going through that process with some. A little bit more about the future with our Probiotics product. We've been for a long time challenged by our customers to help them with their Probiotics. Probiotics are traditionally, it's a live organism. They're grown, they're frozen, and ground down into a powder. That's a very expensive, difficult process to go through freezing. We've got a Frozen Cold Chain Distribution Network around the world. It's very expensive to move product. You've got a Frozen Powder that you're trying to put into a powdered product. It's very sticky. It's very difficult. The product starts to defrost. The probiotic becomes alive from a dormant state, and they start to die. We've been working on technology around encapsulating rather than freezing.
It takes out the cost of the freezing, a lot of asset cost, a lot of time cost, a lot of electricity cost. We go directly into our Spray Drying Technology. We've been quite successful at a lab level with one range of Probiotics. We're looking at a 2nd range of Probiotics. It's a continuing R&D project with exciting developments for the future. It is another Choline. If we can get this right and we invent something that's a game changer, then it's another opportunity for this business to take another growth step. A bit of pipeline for the future, but there's good potential for us. Some of the projects that we've got through in the business. Into the next slide. A little bit about strategy and outlook. We'll take you through it. You can move to the next slide.
We've put in a specific slide with regards to China. We've been working on China for a long time, and I think we're starting to find our channel into that marketplace through the people, the products, and the distribution that we have. It represents a real growth opportunity for us because we're moving maybe not away from Infant Formula, but we're focusing more on dietary supplements, pet food, and functional food applications. It is the single largest marketplace in the world for our products. We're finding that our Infant Formula market in China, there are massive assets and brands that exist in China. Most of you would be aware that the birth rate in China has roughly halved over the last 10 years. It is a significant reduction in birth rates, and companies have enormous investment in assets to produce in distribution channels and in brands.
Where we're starting to see some real opportunities in, those manufacturers are now looking to, how do we get into use our assets to go into other segments? We saw significant growth in that segment for us. We are now into products that are going into Toddlers, Baby milks, not Infant milks, into Sports nutrition or Teenage sort of growing up products, and especially into the Senior segment. Specialty products in the Senior segment. Going to China now, there's all virtually equal space on the shelf to a baby as to see consumer. Because we have a unique range of products, we can take customers into those segments. We're not a meathood of the others, the competitors in the marketplace. We can provide high concentrates and EPA products, DHA products, products that suit different applications. They can be cooked. They can be put into jellies.
They can be put into foods and powders. It is our broad range that is allowing us to access that China segment. We are winning, which is wonderful. Some of our distribution partners are helping us into that. We will broaden our distribution in China over the coming year to help us access more of that marketplace because we can see that broadening diversification beyond Infant Formula is a marketplace that we can be different in and win in. That is a great opportunity for the future. We are also seeing that our Western customers are getting more growth into the China market. Whilst they do not record as a China sale to us, if you look at the breakdown of our sales, China might not look much. We are supplying into around 60% of the Infant Formula manufacturers, and about 60-80% of their business ends up in mainland China.
We are a significant part of the China marketplace indirectly by that. Also, a lot of the Western manufacturers have set up manufacturing within the China marketplace. They have facilities there. We might sell them product into one market. It ends up in the China market. It is something to look at. We have Choline to launch there probably later in the year when we get some capacity, and that will help us even differentiate our position further. We will be able to take a Choline DHA blend, which no one else in the world can do, provide something unique. Again, it is legislated to be used in China. You have to include Choline in formula products. We have a good position. Onto the next page. A few other points about our strategies for growth. We have talked a lot about our new products.
We've put a lot of investment into our R&D facilities, into our people. Now is the intent to try and accelerate that growth. We're putting more resources into that. A big part of that is the distribution strategy. Those distributors are giving us access to get into new markets that our traditional sales force hasn't been able to access. I've just come back from the U.S. We were able to see four customers a day that we would have never got into before. They're not interested in just talking to us about DHA. They want to buy a range of products, not just ours. It was wonderful to offer them a product that's so differentiated to what they've seen before. We're able to get access and talk to them, which provides us with some opportunities for growth, especially in the U.S.
It is allowing us to diversify our products into new markets. Medical foods and Nutraceuticals are large segments and valuable segments in the marketplace that we can access with our range of products. A part of the other development we have done is we have been very successful with some Europe. We are putting technical support into the field. Whereas normally all of our technical support has been back in Australia, we have put a resource into Asia and one into Europe, where we have a Technical Person in the field to actually go and visit customers and provide solutions in the field. Customers just value it. We go in and we are not trying to sell them a commodity. We are trying to sell them service and advice as well.
Not just, "Here's a bag of product," but, "Here's how you use the product." That is really helping us get growth. If you look at our year-on-year European growth, you'll see that our numbers were significantly improved year-on-year. That is really driven by that Technical Support and new market growth. Next slide, please. If we move a bit into our FY 2026 trading update, we're seeing really good growth across that human nutrition. Infant Formula for us has really morphed into human nutrition. Most of our manufacturers today are now manufacturing a whole range of products. They're not just Infant manufacturers. That is just a matter of necessity as the birth rates are dropping globally. Wonderful for us because our range of products suited perfectly. We're continuing to point the distributors. We've had some good experiences with them. We're going to become Distributor Managers.
That's going to be our business in a lot of the way. That's great. We can leverage the people we've got in the field to focus on helping distributors sell into new segments and new geographies. More opportunities for growth. In Ecuador, currently supplying 30%. Our target is to get to 50%, and that's where we're trying to get to this year. It's really a matter of being able to get enough tuna through the business to be able to extract the oil out of it. It's just a volume game at the moment. About Choline, we did the soft launch in October at SupplySide West with great results. We think we'll see some fast-tracked results in that. It's our capacity to be actually able to make and sell enough product. We don't want to overpromise the marketplace, and we don't want to disappoint the marketplace.
If I'm a customer and I start making a product and I can't get the volume, then we're going to disappoint them too quickly. At the moment, we can make a limited tonnage. We need another facility to be able to leverage that growth. We've made some very good ground over the last few months to be able to access that and increase the capacity of the business. Those customers will go through their own production trials and Shelf-life Trials to be able to sell the product. With Premneo, as I said before, we're seeking regulatory approval, ANZ and EU. EU should be soon. We're also seeking approval in Singapore and India and Canada as well. Trying to get that product into marketplaces.
We're trying to also ensure that we've got this well-ringed fence with patents and controls and understanding of the product so we don't lose it along the way. It's a wonderful product. It's just taken time to get to the marketplace. As I turn to the last slide, our outlook for this year is based on the current sales and forecast demand. The board now expects the 1st half of FY2026 revenue to be in the range of AUD 40 million-AUD 43 million. Certainly an improvement of where we were looking earlier. Assuming that demand momentum continues, supply chain remains stable, we expect the full-year revenue should outperform FY 2025. It's a vast improvement of where we've been and happy to deliver some better results for the shareholders in the business. Thank you very much for your time. We appreciate it. Nice to be delivering some good results.
Thanks, Peter. We now move to the formal business as set out in the notice of meeting. Each of the resolutions will be taken in turn. I will introduce each item and resolution. Chair Oliver's got a chance to ask questions on the resolution, and I will display the proxy results received for the resolution on the screen before we move to the next resolution. Voting is now open. I will go to the first item on the formal business. As required by the Corporations Act, a financial report of the company for the year ending 31st of July 2025, comprising the company's financial statements and the Director's declaration, together with the Director's report and the auditor's report, will be considered. I will present a copy of them to the meeting, which is signed by me for the purpose of identification.
I invite you to ask any questions about these reports. I remind you that there were no resolutions required on this item. Please limit your questions at this time to matters related to financial statements and other reports. There will also be time for general questions at the conclusion of the meeting. Questions may be addressed to me or to Ken Weldin of PKF, companies' auditors through me. Are there any questions regarding the reports?
Okay. There is no verbal question on the phone. Thank you.
My name's John Sabljack. In regard to the accounts, I'm just wondering, five years ago, Clover was doing ROE of circa 20%. We've had our Hiccup and Downturn. We're now at 9.8%. Is there a plan that we will return to approximately 20% ROE in the future, or is 10% sort of where it's at?
I think if you stop a business, you can increase its ROE, but you do not grow. I think the challenges are to continue to grow and look at your asset base and decide what is an appropriate asset base for the business. We have increased the asset base of the business. Of investment in Melody Dairies, our investment in Ecuador, which we think are strategic and risk mitigation for the business. We have also expanded our footprint in relation to broader representation and spending more money on product development. We are focusing really on a high-margin business and areas where we can grow more rapidly. I think our focus is on growth and gross margins and managing our Cash Flows to do that. We think if we do that, we can improve our Return on Investment.
I'd like to be able to say that we make our promises to when we're going to.
You're not making promises. I'm just saying. Five years ago, even though we were in a growth phase then, we were getting 20% ROE. I understand there's been a whole range of issues. Now that things have stabilized and improved and we're talking about a bunch of premium products, broad product range, competitive positioning in the market that's advantageous relative to our competitors, do we not be getting a premium pricing that enables that return on equity to improve?
Our strategy is to approach that and also trying to be Asset-light in relation to the way in which we achieve that. I think part of the challenge is in relation to growth and representation. Part of the move to a Distributor Model is helpful in relation to that.
I think it is a focus to continue to improve. I think we would like to see the return, certainly in the Double-digit teens. Aspirationally, everyone had no problem in aspiring for 20%, but it is not in our horizon at this stage. Are there any other questions in the report?
There are no other questions online. Before we leave the show, in case I forget, I really would like to formally thank PKF for allowing us to use these facilities today. I think it is great to be close to our partners in business and also to have a good central location where we can have a shareholders' meeting. Thank you, Ken. We now turn to item two, which is the retirement of Graeme Billings.
I would like Graeme to speak a little bit about his time and reminisce a little bit about some of the changes that have occurred during his time before we formally acknowledge and thank him for his time on the board.
Thanks, Rupert. Good morning, everyone. I've been very proud to have served on this board. I can recall when I joined the board all those years ago, the 14th of May, 2013. I can recall thinking that this was a different world. This is a sector that I was not overly familiar with. I could see I was really interested in the business. I could see that this business, down the track, was going to make some meaningful contributions. That hasn't disappointed me. It is a business that I'm vitally interested in these days.
Just to reflect on when I did join in 2013, some numbers and personnel that we've experienced as a board going forward. Back then, revenue was AUD 44 million. The return on sales of 14%. Now, of course, revenue is about AUD 86 million. Return on sales of 8%, but almost double the revenue. Net assets, 2013, AUD 32 million. Net assets in 2025, AUD 72 million. So more than double. The company goes without saying has really grown. The board back then had five Directors. Peter Robinson was the chair. Ben Brown was the Managing Director. Some of you who've been around for a while might remember these people. Marilyn Slay was one of the meds, as was Cheryl Hayman, and as was David Wills. During my time, we've had three CEOs, including Peter. We've had two chairmen, including Rupert. And we've had four CFOs, including Andrew.
We virtually held meetings in two head offices other than going up to Brisbane for the R&D facility. We had an office in Tullamarine some years ago. We continued to fit out the plant to North Altona, where we moved board meetings to. Sydney was always a prolific leading spot because of Solpat's equity in our company. The company continues to be on a journey, establishing itself as a serious player in the sector. I think it's fair to say that everyone around the board table would attest to the fact that this is a quality company and certainly punches above our weight, which I think is a testament to the Management Team and the board over the years. The company's R&D facility in Brisbane is 2nd to none and enables significant research to occur. Innovation has been the cornerstone of what Clover does best.
Over the years, we have seen innovation manifest itself in a range of product development projects, such as Premneo, we'll talk about Choline, Probiotics, and gel form. As part of the growth journey, the company has identified partners to supplement specialist skills. I urge this practice to continue. I know we have the right Management Team and board skills in place to drive this growth. The company is at an inflection point, poised for sustainable growth. We must be prepared to continue to invest in our future. Be bold in our view of the future and be aspirational in what we can achieve. Shareholder wealth will always be a priority for us. Thank you to everyone. Just before I do your final thanks, I'd like to welcome Fiona onto the board. Fiona stepped on probably three months ago, formally takes over the Chair of the Audit Committee role today.
I know we've got someone with the right skills and the right person for this role. Congratulations. Good luck. Thank you to everyone, Staff, Investors, Management Team, and the Board for all the support over the years. Lots of good luck as we go forward. Thank you.
Thanks, Graeme. On behalf of the board and shareholders, I'd really like to thank Graeme for his wonderful contribution over the years. He's been a very committed member of the board, majored on his comments, but always insightful. He's been extremely helpful in establishing the Risk Management and Governance Procedures within the company, which I think we believe will stack up with anybody else in the sector or other significantly listed companies. He's mentored a number of CFOs.
I think his board experience as a Senior Director has added to the growth of other Directors around the table in the contributions he brings to the table. Graeme, thank you very much. I wish you well in your retirement.
Thanks very much, Rupert.
Thank you.
Sorry, Mr. Chairman, there's a general question from shareholder Mr. Stephen Main, just asking if Graeme, and I'll bridge the question given the commentary that's taken place, if Graeme can state what he believes to be the two best decisions made by the Clover board during his time with the company, and does he have any regrets?
Thank you, Stephen Main. Firstly, no regrets. We've always moved forward. There have been two standout decisions out of a number of decisions.
Firstly, along the journey when the board really adopted in a serious way a growth strategy, and that was about reinvesting into the company, particularly into R&D and innovation in the Brisbane facility. That's been a real highlight. We've talked a lot about the outcomes there, new product development like Choline, Probiotics, Gel Form, Premneo. Some of those, of course, still yet to prove out totally, but we're very confident that those products will be successful. Secondly, investment in the Spray Dryer, Melody Dairies, and Ecuador, still playing out, but will represent the future of this company.
Thanks, Graeme.
Any other questions?
No further questions. Thank you.
Item three, resolution one, set out in the note of the meeting which relates to the adoption of the Remuneration report ending the 31st of July 2025.
The Remuneration report is in the Director's report section of the published company's annual report, pages 18 to 27. By way of summary, the Remuneration report explains the company's Remuneration policy and the process of determining the Remuneration of Directors and Executive officers. Sets out Remuneration details for each Director and each of the company executives named in the report the financial year of 31st of July 2025. Section 250(r)(2) of the Corporations Act requires companies to put a resolution to their members that the Remuneration report be adopted. Please note that the resolution is advisory only and does not bind the company or the board. I move that the adoption of the Remuneration report for the year ending 31st of July 2025 be put to the meeting in the form of resolution one set out in the notice of meeting.
Details of the proxy votes in respect of this proposal resolution are shown on the screen. Are there any questions regarding the Remuneration report? There are no questions on the line.
There are no verbal questions on the phone. Thank you.
No questions. If there are no further questions, I put a motion to the meeting that the Remuneration report be adopted. The results will be decided by way of a poll at the end of the meeting. I now move to the next item. The fourth item, being the second resolution, relates to the reelection of Dr. Simon Green. Simon is required to retire by rotation, pursuant to the Constitution, and be eligible to offer himself for reelection.
Simon has been on the board since October 2020 and chairs the Innovation and Development Committee, which provides oversight, support, and strategic guidance to the Management team in conjunction with two independent consultants. Simon, would you like to make some comments about you and your commitment?
Thank you, Rupert. As Rupert said, I've served on the board since October 2020, and I'm still incredibly energized about the prospects of the company. It's a well-governed company. It's got an outstanding Management team and a clear strategy for growth, as I see it. As Rupert said, I take great delight in chairing the Innovation and Development Committee for Clover Corporation. As Rupert said, the focus is to govern the specific programs that underpin the delivery of innovative, world-leading products and help diversify our product offerings in order to help fuel future growth.
I have a Bachelor of Science degree with honors. I've got a PhD from Melbourne University in the field of Biochemistry. I'm a graduate of the Australian Institute of Company Directors. I have international experience, having worked in the United States, in Europe, and also in Australia. I spent 17 years at CSL Limited during its Global Expansion Phase, where I held the positions of Senior Vice President for our Global Research and Development for Plasma products. I was also the General Manager of our operations in Europe, based in Germany, and also ran our Broad Meadows facility here in Australia. I have experience in managing innovation, developing new products for global markets, manufacturing operations, due diligence, and Mergers and Acquisitions.
I'm also currently the co-founder and CEO of ImmunoSYS, a Small Biotech Startup company that is developing Artificial Intelligence-driven RNA technologies for diagnosis and Management of patients with immune disorders. I have 10 years' worth of board experience on ASX-listed companies, and I confirm that if I'm elected, I have the capacity to serve as a board member for the next term. I'm incredibly excited about the opportunity to stand for reelection and contribute my knowledge, my energy, and my passion to the Clover board and the subcommittees that I've participated in. Thank you very much. Back to you, Rupert.
Thank you, Simon. The board, with Simon abstaining, can honestly recommend the reelection of Dr. Green as an executive Director of the company and recommends that you vote in favor of the resolution.
Details of the proxy votes in respect of this proposed resolution are shown on the screen. Are there any questions regarding this resolution?
Please. One question, because you are clearly the Director with a focus on R&D roleplay, was the company being not a huge company or about tech startup? Can you elaborate on your thoughts on how to focus the capital and effort of the team on the best return of capital projects? Because the company does seem to have multiple high-potential growth targets in the fire. As shareholders, we would like to know we are punching above our weight, but also being very focused and considered in managing the capital. I'd love to hear your thoughts on that.
Sure.
I think the most important starting point is having a clear strategy, at the Board level and at Management level, about what the company would like to do. Then to translate that strategy into activities that occur within the whole company, but specifically within the R&D organization. We have a formal process within the organization that involves input from the commercial side of the organization, the research part, manufacturing, operations. Each part of the organization comes and contributes to a formal process that we have that looks at all the different opportunities and then selects best opportunities to progress. There are many good ideas that we still do not know that are on the shelf, but the ones we are progressing out, we think are the best for shareholders and for future growth of the organization.
Once we have done that, we have an ongoing process for monitoring how those projects are progressing. The board regularly reviews the progress of the R&D projects, and we also go for a deeper dive three times a year with the Innovation and Development Committee.
You might like to comment on the formation and the members of the Innovation Committee?
Yes. The Innovation Committee has now been running for over 12 months. I am the chair of that committee, and we also have the Head of Research and Development, so Glenn Elliott from the company. Peter Davey, our CEO, also joins that meeting when available. We have two external experts in the field that we have recruited onto that board, Colin Barrows from Deakin University and Effie Farmer-Koledes from Sydney.
Colin brings an awesome background in Algal Oils, Fermentation, Omega-3s, and Effie has spent some time working with Danone as Head of Regulatory Affairs. We have really been focusing that committee on understanding the regulatory strategy for all of our projects, and Colin's providing information on the tech. Thank you.
Thank you, Simon. Any other questions? If there are no further questions, I put the motion that resolution two be adopted. The results will be decided by way of a poll at the end of the meeting. This concludes item three of resolution two. The 5th item being the third resolution relates to the election of Fiona Pearce. Fiona, having been appointed by the board with an effective date of the 1st of August 2025, is required to offer us some reelection.
We've had a question by way of background, and so it's appropriate that I answer that question at this stage, which relates to the process of recruitment of Fiona. This time last year, as part of a planned transition, Graeme's time to retire at this meeting was understood, and so we started a process for recruitment. We did that by drawing up a spec of what we considered to be appropriate, looking at our skills matrix and looking at what impact Graeme's departure would have and what we needed to sort of expand on it or bring additional skills onto the board. Out of that came then a specification for the recruitment of an effective Director. We looked at three different parties who could assist us with this, headhunters, who could bring and select one, Amirra Partners.
They brought a broad range of opportunities to us, which was distilled down into a shortlist. An important part of that was we were keen that we had a broad selection of male and female. We wanted to ensure that it was talent, but we had an adequate pool of talent that gave us options and opportunities. Fiona was not known to any of the other Directors on the board. She certainly was not introduced that way. She was interviewed by the board and by individual Directors and as part of a shortlist of people. The process, I think, was thorough, and I think we have all been happy with the selection. Fiona, maybe you would like to give some background of you and your reason for being here.
Sure. Thank you very much. I am an Accountant.
I worked for about 19 years at BHP and BlueScope Steel in a wide variety of different jobs in that time on-site and in Strategic head Office roles, Financial accounting, Management accounting, Tax, the whole gamut. In the last roughly 16 years, I have sat on a variety of different boards. Some of them are very large boards. We have got one at the moment, AUD 3 billion, 25,000 staff, public hospitals, private hospitals, aged care, and then also private companies. I Chair the Board of an Ethical Fund Manager and then listed. I am on the Board of Smart Parking, which is a High-Growth Global Company. When I joined the board in 2019, and I have chaired the Audit Committee there for most of that time, but I joined the board in 2019. Its share price was sub-AUD 0.20. It is now more than AUD 1.20.
It's been seeing huge rapid growth, and we've done a really big global expansion into Europe and the U.S. I guess what really attracted me about Clover was it's another growth story. I hope that a lot of my pay doesn't come from my pay. It comes from the shares. I've just bought AUD 100,000 worth of shares, and I hope there'll be good upside in that, which is, and I love the challenge of growing a business. I will bring that. I'll be asking, and I already think I have, some of the hard questions on the Finance Front. That's not just the annual report. That's more, how do we grow? How do we actually, how do we price? How do we get the cost? How do we grow the business? That's what I love doing. I have got a Bachelor of Economics.
I've got an MBA. I'm a Fellow of CPA Australia, and I'm a Fellow of the AICD. So hopefully, that's enough.
Thank you, Fiona. The board, with Fiona abstaining, recommends the reelection of Fiona Pearce as an Executive Director of the company and recommends that you vote in favor of the resolution. With Graeme's retirement, Fiona will be appointed to the position of Chair of Audit and Risk. Details of the proxy votes in respect of the proposed resolution are shown on the screen. Are there any questions on this resolution?
There's no further questions online. I think Mr. Stephen Main's question has been addressed. Mr. Chairman?
Thank you. If there are no further questions, then I put the motion that resolution three be adopted. The resolution will be decided by way of the board at the end of the meeting. This concludes item five, resolution three.
Item six, being resolution four, is set out in the notice of meeting relates to the approval of the issue of financial year 2026 performance rights granted to the Managing Director under the company's long-term incentive plan. Approval of this resolution will affect the company to issue 529,638 performance rights to Mr. Davey, with a Vesting date subject to performance on the 31st of July 2028. The Managing Director has 832,068 outstanding performance rights yet to vest, previously approved by shareholders at previous AGMs. Mr. Davey will hold 1,361,706 performance rights vesting over the next three years if resolution four is approved. The terms of these performance rights are summarized in the notice of meeting on page nine, the Explanatory Statement.
I move that the resolution for approval of the acquisition of the Managing Director's performance rights and the issue of other provisions of shares in satisfaction of performance rights be put to the meeting in the form of resolution four set out in the notice of meeting. Details of the proxy votes in respect of the proposed resolution are shown on the screen. Are there any questions regarding resolution four?
Mr. Chairman, there's no questions in regard to resolution four online.
Questions from here? If there are no questions, I move the approval be given to the grant of performance rights to Mr. Peter Davey on the terms described in the Explanatory Memorandum accompanying this notice of meeting. Item seven, being resolution five, set out in the notice of meeting relates to the approval of the company's Long-term Incentive Plan.
The plan was previously approved by resolution of shareholders passed at the company's annual meeting held on the 18th of November 2021, more than three years ago. The company is considering providing financial assistance to the trustee of its employee share trust, CPU Share Plan, Pty Ltd, to acquire fully paid ordinary shares in the company to be held on the terms of the trust through the provision of funding to the CPU for the acquisition of shares in the company on market to hold them on the terms of the trust. An exemption to the financial assistance prohibition under section 260(c) of the Corporations Act includes where financial assistance is given under an employee share scheme that has been approved by a resolution passed at a general meeting of the company, section 260(c)(4) of the Corporations Act.
I move that the resolution for the approval of the long-term incentive plan be put to the meeting in the form of resolution five set out in the notice of meeting. Details of the proxy votes in respect of this proposed resolution are shown on the screen. Are there any questions regarding this resolution? There are no questions online, Mr. Chairman. Thank you. I move that approval be given for the company to provide financial assistance on the terms described in the Explanatory Memorandum accompanying the notice of meeting. Item eight, resolution six set out in the notice of meeting relates to the approval for the adoption of a new constitution. The company's existing constitution is in the old form of memorandum of association and articles of association, which were adopted in 1988.
The articles of association were amended at the Annual General Meeting of the company held on the 23rd of November 2010 to insert a replacement article 28, but neither the memorandum nor the articles have been amended since that time. In the circumstances, the Directors proposed to adopt a new constitution to replace the existing constitution in its entirety. This is intended to bring the company's constitution into current Law and Corporation Governance practice. I don't propose to detail the details of changes. These have been summarized in the agreement below. Resolution six, being a special resolution, requires 75% approval. I move that the resolution for approval and the adoption of the new constitution be put to the meeting in the form of resolution six set out in the notice of meeting. Details of the proxy votes in respect of this proposed resolution are shown on the screen.
Are there any questions regarding resolution six?
Yes. I sort of fell asleep halfway through the constitution. So I just wonder if you could tell us at a high level what the key changes are in terms of implementing this, apart from changing the name of the ASX and changing some of the other sort of housekeeping type issues.
I think most of them are housekeeping. I think the only thing that was not in the old one was the ability to hold electronic meetings. Other than that, everything else is what I would call housekeeping. There were no changes in form or substance proposed by the board or our lawyers to change the power of anything that was available to be done under the previous constitution.
If there are no further questions, I move that the approval be given for the adoption of the new constitution described in the explanatory memorandum accompanying this notice of meeting. There are no questions online. In accordance with the ASX rules, I now ask the floor and everyone online to finalize their votes. Now, the welcome gets to Paul and the motion. First, is there any person present who believes they are entitled to vote but has not registered to vote? Would you please raise your hand for assistance? First, entitled to vote on this floor are all shareholders, representatives, and attorneys of shareholders and proxies who hold Admission Cards. Blue cards are voting cards. Yellow, non-voting. White is a visitor. On the reverse side of your admission card is your voting paper instructions. I will now go through the procedure for filling out the voting papers.
Proxy holders have attended to their admission card, a summary of proxy votes, which entitle the voting instructions for business items on the appointment documented in your favor. By completing the voting paper, when instructed to vote in a particular manner, you are deemed to have voted in accordance with these instructions. In respect of any open votes, a proxy holder may be entitled to cast, need to mark the box beside the motion to indicate how you wish to cast your votes. Proxy holders should refer to the summary of proxy votes form attached to your voting paper for further information. Shareholders also need to mark a box beside the motion to indicate how they wish to cast their votes. Please ensure that you print your names where indicated inside your voting paper.
When you've finished filling in your voting paper, please lodge it in the ballot box or pass it to a Computer Chair Representative. We will move around the room to collect and ensure your votes are counted. If you require any assistance, please raise your hand. I'll pause once voting papers are completed and collected. Please indicate by raising your hand if you require more time to complete and lodge your voting card. Shortly, I will close the voting system. Please ensure that you have cast your vote on all six resolutions. As Chair and as previously advised at the meeting, it is my intention to vote all open proxies given in favor of each resolution. I will now pause to allow completion of the voting. Voting is now closed.
The formal business of the meeting having been completed, I now open the floor for questions from shareholders to the board. Questions asked of the moderator.
Okay. There are no verbal questions on the phone. Thank you.
We have two remaining questions online under general business. And yep, you are on the floor. Mr. Gary Ellis has asked whether we can provide a bit of an update on Ecuador, and I will read the question. Is the present Political Climate in Ecuador and its surrounding neighboring countries causing concern to Management with respect to the ongoing processing and supply of Fish Oil from its Fishhead Processing Plant? Is or has the company investigated or considered establishment of additional or alternative facilities within the Australasia region, given the high quality of seafood from our Southern Oceans?
Peter, would you like to take that question?
Ecuador is not without its challenges.
We certainly have practices and processes in place to ensure that our shipments and production is protected. Our facility is actually behind a 12-foot wall, and it has armed guards in front of it. All of our shipments are conducted by a 3rd party who videotape the entire process with security. All containers are loaded under secure mechanisms. The trucks that take the product to port are all Escorted Trucks that take it from our facility to the actual port, and it goes in behind locked gates at the port. To date, we've had no issues without political issues within the country itself. We haven't been—I don't think Ecuador will be affected by Venezuela or things that are happening in other countries. It's quite unique in its own country and borders. Have we looked at other facilities within the region? We have considered things in the region.
Much of the Tuna fish that's caught in this region is Farmed Tuna Fish. It doesn't contain the right levels of DHA or Omega-3 within it because it's Farmed Fish. It's not Deep-sea Fish. You can only use caught Deep-sea Fish for use in the Infant Formula. It's World Health Organization policy. It doesn't stop us thinking about other facilities in other parts of the world. Ecuador is very new. It's going extremely well. We've got growth opportunities there. Once it is at its full capacity, we would then turn our attention to other supply opportunities. John?
I was just wondering whether you could talk about the impact of AI to your business, especially given the amount of R&D you do and what impact and whether that's delivering any benefits or is—
I think you can both answer, but you can answer it a little bit from the Innovation Committee, and you can answer it from the—you go first, Peter.
Okay. So we're beginning the journey, probably the best way. We have invested in AI in the business. We're just rolling it out now. It's in its infancy. We're certainly looking at projects around how we best apply it into our R&D process. Just to give you a glimpse into it, one of the questions we've asked the people that we're dealing with is, "We've got a problem. We've been in this business for a long time.
How do you look back within what we've already done in the past and find that information and do it? In a couple of seconds, we can get answers. It is a game changer for all industries, I think, and R&D will certainly support. It's a long track. We've just begun, but it'll certainly be one of the applications now. Yeah, just echoing that, at this point, the AI is really about sort of information gathering and efficiency in its own processes rather than it being the core foundation of the new products that we have. I think that in time, that will change. At this point, it's really about increasing efficiency and information gathering. When you say in time, are we talking one year, two years? Oh, I think a longer—it depends on the type of company.
If you're an IT company, you'll be talking about that now. You'll have new products coming out. I think for us, we're physical products. AI can really only contribute to the design of those products rather than actually being the product.
Mr. Chairman, we have one remaining question, which comes from Mr. Stephen Moenegan in relation to when was the audit last tendered and when will it be tendered next?
I don't know the date of when it was last tendered, but it wasn't in the last three or four years. It was nine years I've been signaled. The process, I think, is when we look at audit, we look at the quality of the outcome and the relationship with the auditor. From a cost perspective, I think we do get an insightful perspective from other Directors in other boards.
I think, like all things, things are always subject to review from time to time. We've got the existing Audit Partner; he's got one more year to run in his appointment within his organization before he moves out of rotation. Fiona is taking over as Chair of Audit and Risk. That is a relationship that will be—the transition, I think, is important. I am sure that Fiona will look at what we think to do or what we need to do in relation to ensuring that we refresh our process and that we're happy with our processes. I would think that will probably be something that will be reviewed at the end of next year.
If I could, a couple of questions. Just firstly, on the New Zealand trends and just looking across the district, there's been a couple of movements there in terms of capacity.
A2's bought the Chili plant and has bought a plant in Pocono. I'm just wondering, in terms of the capacity that might become available in New Zealand, and if you might explain on the Choline line, just what sort of plant you need, will there be scope for some of those plants if they're underutilized? Maybe use some of that capacity in New Zealand going forward.
The plants that you describe are Milk Dryers. Effectively, they are massive facilities that do, on average, probably 8-10 tons an hour. Our dryers are significantly smaller. We have dryers that are 750 to 1.2 tons an hour. Because we're doing very specialty products, smaller runs, they're way beyond the scope of our business. Once we've looked at our Smaller Dryers that are available, there are a number of dryers throughout New Zealand.
As I described earlier, we're talking to a number of players around Co-manufacturing with them, joint venture manufacturing with them, and a buyout. There are other options on the table within New Zealand. New Zealand is a good marketplace for us. It's the second largest formula marketplace in the world. We do a significant amount of different formula business there. It speaks well. We've got people that are already operational people. It's the right place for us to look. The big ones are just too big.
It sounds like you were using one of the MG sites here or the Spooner site. It's a relatively Small Dryer, though. It's a 1.5-ton dryer. For Choline, is it a different type of dryer you're thinking about, or what sort of dryer will you—or what sort of product?
It's a Nutritional Dryer that requires a fair bit of upgrading and change to be able to run to the Choline product. We are using a dryer here in Victoria now that's gone through 12 months of retrofitting to be able to make the product. We would have to do the same with another product.
With the connection you've got with a2 Milk Company, you're talking about a range of new products going forward. How do you see opportunities in the English label versus the China label and what they've got planned?
I wouldn't comment on any individual customer. All I'd say is that generally, all customers are looking at broadening their scope, as I described earlier. If you are an Infant Formula manufacturer, you have to go and invest in other products and other applications. We have been doing very well in that field.
If I'm an Infant Formula manufacturer and I want to produce a product for a Senior's product, it's not the same ingredients that I'm going to put into an Infant Formula product. There are a few competitors out there that can match the products that we've got. We are well positioned to take advantage of those opportunities.
I think when you look at China and you look at the Infant Formula market in China and you look at the Birth Rate Decline, you can see that it's incumbent on all of those parties to want to find other applications that broaden that sustainability. We see opportunities to feed into all of that change across all markets.
Sorry. Yeah.
Just to lastly, so that trend that you alluded to, the current switch towards English label even with a2 Milk Company, but similarly with the known safety happening as well there, do you think this is a temporary phenomenon, or what do you think's behind it? Does this represent a pivot away from China to these European manufacturers versus really targeting China? Or is it complementary?
We've certainly seen a shift the past 12 months away from towards Western manufactured product. That's probably been the best outcome. That is, Western manufacturers lost a lot of share in the marketplace. They favored the local Chinese manufacturers. Western manufacturers invested significantly in online marketing and therefore using Bonded Warehouses and Electronic Shop fronts to represent their brands. They've done very well at marketing those products and using influencers within the China market.
It did swing back towards the Western manufacturers in the last 12 months. I have no doubt that the Chinese are very good at competing, and they will fight their way to try and win back the share that they've lost. It'll be a fight between the two. As I said earlier, we supply both, so we're quite happy for anyone to win business as long as our ingredients are in the can of Infant Formula manufacturers.
Just following on, we've got a question related to a2 Milk Company's big change in its supply chain. Obviously, you can't comment on a specific customer, but can you give us some sense on whether there's going to be any impact on your vendor relationship going into the new design of supply chain?
I would just see all of those as an opportunity. There is more capacity.
It's an opportunity for us to get more business, and hopefully, we do get that business.
I actually have two questions of my own, if I can interrupt or piece. Yeah. The first one—Kelly, please. The first one is coming back to Choline XL. Now, you mentioned in the next six months, you aim at coming to the ability to be able to supply commercial amounts. Can you maybe talk us through the timeline of what we should expect? Do you need to see a certain level of commitment from your end customers? And what do the board need to have in terms of the confidence in the return on equity or a committed amount of volume offtake to pull that trigger for either a JV or toll vendor signing contract? And when can we see that? When should we expect that to happen?
After that, when should we expect you guys to actually announce signing a JV or pull the trigger for your own Greenfield CapEx or signing a toll producer?
That is a big question.
That is the answer in that question.
You want to start?
No, finish.
From the board perspective, we see this as a growth opportunity. As you correctly questioned, what is the timing in relation to various takeoffs? I think if we had a facility of our own, we bought something, then we would be saying, "What is the transitional plan? And how do we manage whilst we are building up Choline? What else are we going to do with this facility? And therefore, how do we manage it, make it cost-effective, and be sensible about it from an investment perspective?" That is sort of one leg.
The other leg of, I think, toll manufacturing is all of our trials that we're doing, we've got somebody who would toll manufacture for us, but they've got limited capacity. We know we can get to a certain level with them and it's a good relationship. All of our volume trials and so forth have been done with them. They're probably the two bookends. If you're to scale up, then it's outside of them, what is the next opportunity? To what extent is that going to be driven by access? The problem with going to 3rd parties is location. Can you get access when you want, or have you got to batch process from time to time? How do you deal with that? I think we're still in that stage of assessment in relation to it.
I think all of those things are alive. I'm not sure there's any one answer we can give you today. I think the board is very supportive of the strategy to implement this. We see it as a great growth opportunity. I think we're happy to take measured risk around it to support a sensible plan as put up by Management.
Maybe the extension of that is we've had a number of initial trials done with the product. They've all been very successful. Now we are expanding that. We probably signed up another 10 customers in North America last month. Again, it'll be staged to ensure that the product actually functions, works, that the supply chain's correct, and it actually has the shelf life required for brand new investment in product.
Those customers definitely will take about 12 months to go through their own production and Shelf Life Testing before they'll start ordering product in volume. It gives us time to catch up and scale up to be able to meet increased demand. The intent is not to go Greenfield. We have very good knowledge. We can back it up. We can present a case to the board that says we need the investment in Greenfield. That is probably five years down the track. We have a very small facility at the moment where we have been able to manufacture the product. We will fulfill that demand fairly quickly. Therefore, that is why we are looking for more of a Brownfield operation or a joint venture or a toll manufacturing. The issue with it, as I said to Mark, is you cannot just go and manufacture it on any facility.
You need a Nutritional Dryer, and then you need to invest in that dryer. If it's ours or somebody else's, that requires upgrades and changes to manufacture the product. It's not a simple product to make. It's a really hard product to make. I'm not keen on investing in somebody else's dryer. I'd rather invest in my own asset.
When you talk about six months, that's six months of assessment and small scale scaling up, looking at the transition when your customer is doing their 12-month Shelf Life thing. You might get some sort of maybe verbal commitment from them for you to move on to brownfield. If you do eventually do a Greenfield, it's like a couple of years.
The six-month reference here was that we should be in a position where we know if we've got another facility or a toll manufacturer or a joint venture. Actual moving to customer orders and sales is probably more of a 12-month.
Second question. Second question, please. We talked so much about China. I got to ask about in China, it's been easy making.
Sorry.
About the Chinese market and how far you guys have gone in the Chinese market. It's been years of hardworking making, but we still haven't seen a material line just for Chinese domestic product. Can we actually expect that to ever happen? Because according to they do.
I don't know. The answer, you can lead a horse to water. We have had ups and downs within the China marketplace. We are certainly qualified with the top five major Infant Formula brands.
We have one business with them. It tends to be in their premium brands. The opportunity now is that the same license in China, all licensees have to reapply for their license, basically starting now, which means that we're again an opportunity to be in the licenses, which will then stay for five years. Every five years, you have to relicense. There's a good opportunity there. As I said earlier, we've one business within the Senior Adults Market, which we'll see growth out of. The significant market, it's a very competitive market, and you're probably aware. We don't compete on price. We have to compete on technology. That's where we win. You look at some of the localized brands, they have an absolute super premium segment.
We tend to be in those products where there's no, where people are paying for a product, they don't want any sensory issues, no smell or no taste, or they want higher doses of Omega-3 in their product, which we can achieve with locals. Locals really don't compete. That's the bit. We try, we quote, we work at it. I think what I tried to show you earlier was that we're trying to now leverage our broader application of products into different applications. Formula channel is extremely price-conscious, and we just can't play there. Yeah. Sure. You spoke during your presentation about incorporating some of your technical staff with customers in their product development. Is that done on a fee-for-service basis, or that's a sales and marketing expense? It's a sales and marketing expense. Yeah. Of course, our product is very unique.
You actually have to teach customers how to use your product. It is not like you just buy it off the shelf and you can use it. You have to teach them how to, when to incorporate the product, so it is not destroyed in the process. If you put it in too early or too hot or too cold, it could impact the product. It is a thing. It is Omega-3. It has significant issues. If you break the barrier, then you are going to destroy your product. We have to teach them and show them how to do it properly.
Any other questions? No more questions online. Kim? Thanks for the questions. That is enough for the questions. I would like to thank you all for your attendance today. The results of the poll will be announced in the market via the ASX platform later today.
As the business of the meeting has been concluded, I declare the meeting closed. Thank you again for your attendance and your continued support of Clover Corporation. I look forward to updating you. I hope you. Thank you.