CNN 6.25% 15.0¢ cardia bioplastics limited


  1. 689 Posts.
    Vibes are positive at present and 2.5 mill chinese joint venture looks good.

    Small Caps Investment
    with Mark Simari


    Cardia Technologies

    Cost effective and environmentally friendly solutions are very much sought after nowadays in all forms of industry and health. Over numerous years Cardia Technologies (ASX: CNN) has focused on offering solutions to some of these problems and the company is now at the stage where their efforts are nearing commercial reality.

    The Cardia Corporate Strategy

    Leveraging lifestyles of health & sustainability (LOHAS) products/services with Internet marketing and e-commerce strategies - the LOHAS customer base crosses environmental technology, natural healthcare, healthy living, eco-friendly products & knowledge development industries as identified by current market research in the U.S.A.
    Generate regional and global revenues. 1st company in Australia/Asia to focus on LOHAS in complete way.
    To invest in world leading technologies in industries with projected double-digit growth rates to realize full market capitalization values on business units with possible I.P.O. back to shareholders of Cardia.
    Year High: 20 cents Directors
    Year Low: 3 cents Patrick Volpe
    Current Price: 14 cents Kenneth Ingbritsen
    Shares Issued: 126.1 million * Peter Pena
    Listed Options: 115.5 million *

    (* Includes recent placement made to Tony Technology Company Limited)

    Cardia has not limited their focus to an individual niche market within their environmentally friendly products range and by taking this strategy, has placed them in a position to take advantage of numerous market segments. By doing this, it also enables them to bring certain products from their portfolio that have gone through the trialing stage onto the commercial market to derive income, while other products they have an interest in can continue through the R&D stage.

    In order to be able to evaluate all of Cardia Technologies interests, we will look at each of their main investments separately. The portfolio is made up of four major investments:

    • Agricultural Biotechnology • Natural Pharmaceuticals • Environmental Technologies • Medical Biotechnology
    Agricultural Biotechnology

    Cardia holds a 43.8% interest in Bioglobal P/L., which is a crop protection and environmental pesticide company.

    Bioglobal’s goal is to become a biorational pesticide company, a term which means that its products are either made up of natural ingredients or a combination of natural and chemical ingredients, which are generally regarded as safer to the environment and health. Apart from those safety issues, this type of technology does not have to undergo long term and costly toxicology trials and has a much faster lead in time to commercialisation which is a major financial benefit in regards to capital costs and eventual revenue returns.

    Bioglobal was founded in 1999 by Mr. Stephen Sexton, an entomologist with over 25 years experience in the formulation and development of this type of technology. His experience and reputation have lead to strong links to institutions such as the CSIRO, Monash University Green Chemistry and State Government Agricultural Departments. Although Bioglobal will focus on developing and commercialising its own range of products, the company will also commercialise and market products from those institutions when they feel a market opportunity exists.

    Trials currently underway include products targeting the following:

    Provisional patent lodged to eradicate colonies and for a timber preservative which could eventually replace copper chrome arsenate.

    Fire Ants:
    A serious environmental problem found in the United States of America, and recently located in Queensland, Australia.

    Corn Root Worm:
    Sprayable bait is being developed which reduces the use of insecticide by 98%

    Helicoverpa Moth:
    A major pest in the cotton industry: product registration expected to be June 30 2002 with product sales estimated to be sold under permit to the cotton industry in Feb. 2003

    A product that acts as a deterrent to rats:

    Bioglobal also has a 13.56% investment in Biocontrol Ltd, which distributes pheremone technology products to the horticulture industry and which had annual revenues of $17 million for Financial Year 2000/2001. Biocontrol’s major shareholder is Shin Etsu Chemical Company of Japan who hold 70%, the world’s leading manufacturer of Insect pheremones
    Natural Pharmaceuticals
    Cardia has a 49% interest in Natural Pharmacy Ltd, a company that develops natural pharmaceutical and dietary supplements

    Natural Pharmacy formulates and develops its own products and has a current catalogue of 150 products. Although products are sold locally, the company’s marketing efforts are directed mainly at overseas due to the greater volume potential.. Through its 60% owned subsidiary, Herbworx International P/L, sales and distribution has been established in the USA, Europe and the UK.

    Natural Pharmacy’s aim is to build a strong overseas presence for their natural pharmaceuticals and supplements. The product range includes treatments for conditions such as insomnia, varicose veins, stress and anxiety, PMS, arthritis, circulation, liver cleansing and menopause.

    Herbworx is currently underway with a major USA television commercial promotion to market a range of their products.

    Environmental Technologies
    Cardia has designed, developed and manufactured a water treatment system that the company claims to provide superior performance in comparison to other water treatment methods that are currently available.

    Electrcoagulation does the water treatment process, which is the removal of containments in the water by an electricity induced chemical reaction. This process has been trialed at various locations for various industries and has proven to be very effective and highly efficient in a broad range of applications.

    The system is designed to handle a large range of flow rates, ranging from 10 litres per minute to 500 litres per minute, which would therefore address the needs of most customers.

    The waterpower system would be suitable for a large range of industries which could include the mining industry, industrial companies, agricultural industry and waste services companies. The possible uses for this product appear to be vast and with the ever-increasing trend towards more stringent requirements by government authorities on waste management, this can only lead to continual growth in wastewater management.

    Cardia recently announced that it had entered into a partnership with a Papua New Guinea company, by way of a 33% holding, that had been selected by the PNG Government's Office of Environment Conservation as consultants for the planning and remediation of the Fly River system in PNG. This involves the clean up of the Fly River and OK Tedi mine site and will be a long term and high cost project and should Cardia be successful in gaining the contract for the work it could certainly put them in the spotlight from other mining companies looking for a solution to their own similar problems. This week Cardia made another step forward with their Waterpower system by announcing that it plans to set up a $2.5 million joint venture with Tony Technology Company Limited, a Hong Kong based company, to manufacture and sell its water technology in the People's Republic of China. This move into the Chinese market could eventually prove to be significant and may possibly lead to further expansion throughout Asia.

    Medical Biotechnology
    In July 2001, Cardia entered into an agreement with the International Diabetes Institute to develop a new anti-diabetes drug, which will help to lower blood sugar levels and combat the most common form of diabetes, Type 2 diabetes. The Institutes research team’s goal is to chemically synthesize a drug that enhances insulin action similar to the natural compound. The fact it is based on a naturally occurring protein reduces potential side effects usually associated with drugs based on chemical modeling. Tests have been going well and have achieved significant breakthroughs and are now at the stage where animal testing is about to begin. With over 150 million people who have type 2 diabetes, the market potential is considerable. A provisional patent has been lodged by IDI, and Cardia will receive exclusive worldwide product development and marketing rights.

    With a portfolio of assets directly targeted to the environment, both on the global front and the lifestyles of individuals, combined with this weeks cash injection and management expertise from the alliance with the Tony Corporation coming out of China; Cardia is well positioned to potentially deliver shareholder wealth via the realisation and commercialisation of its research and development over the past few years. The work done over recent years has given the company a diverse range of interests, each with their own unique opportunities. The commercial market for all the products within its portfolio is large, wide ranged and rapidly growing. With a degree of patience we may see Cardia develop, in the not too distant future, into a highly profitable company. We rate Cardia as a Speculative Buy and watch its future with interest.

    Mark Simari (Stinger)
    Authorised Representative
    Swiss Financial Consultants Pty Ltd
    Licensed Securities Dealer
    Phone 03-9663-7590
    Fax 03-9663-7989
    Level 6, 220 Collins Street
    Melbourne Victoria 3000
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