Development of bio-active dietary supplement for Asia market

Background: Bio4ASIA is a cooperation project between two similar companies working in the same industry - producing of food supplements - and based on similar needs and ambitions: to expand and diverse market of their products in order to develop companies and make them competitive in long terms. However, both companies are having different competences and strenghts in different areas of producing and distribution. BioCC is focused on work with high qualitative lactic acid bacteria cultures and LotosPharma is producing wide assortment of dry forms of medicine and food supplement. The region of South-East Asia has always been attractive for partners because of its high consuming potential rised by increasing life quality, consumers trust to the EU produced products and other aspects; in case of Bio4ASIA partners, one of aspects is already created business contacts. It's important considering business traditions in South-East Asia region: before conclusion of any cooperation contract there, it's expected to meet potential partners several times and develop relationship based on trust which is a challenge for small companies considering the distance between regions. To enter such market companies should consider that in case of success they have to be able to provide a high qualitative and regular production volumes to satisfy the market demand OR - to offer a niche product. On the base of experience gathered during early stage marketing activities in 2016, 2017 partners created an idea to develop a new product especially for South-East Asia market using local raw materials and specific additives making product better recognizible and attractive for the target market. To sell row materials is always less profitable as to sell a product with added value and there is a good opportunity for new type of dietary supplement combining lactic acid bacteria (the core area of the Estonian partner) with fiber produced by Latvian partner offering digestive stimulant against metabolism and nutrition which is becoming a worldwide problem. Considering development of the new dietary supplement is already complicated process, one of the challenges is time to ensure that the new product is qualitative enough to be interesting for potential consumers and the quality is stabil so giving time necessary for distribution. Distribution time of the product is one of the main aspects regarding export. Cross-border nature: Cooperation between Estonian and Latvian partner provides following benefits: share of competences, because both companies are similar by nature and interests, still having specific competences in related area, share of resources as much as it's possible (experts, data, equipment) because joint activities make investments more efficient, less time-consuming comparing with individual activities, attraction of resources so sharing risks of the product development process, two of three Baltic States together already have an opportunity to position both partners as reprsentatives of the wider region of Europe and Europe as producing region is considered as advantage comparing with local producers or producers of North Asia regions, fixed cooperation rules also works as a tool to limit local competition. The main objective of the Bio4ASIA project is to increase competitiveness of the Project partners in order to expand and diverse the market and ensure long term stability of the production and growth of the turnover. In context of this, the specific objectives of the project are: to create a new dietary supplement on the base of local row materials as well as in-house competences of the both partners, to make the product and also producers - project Partners - recognisable in South-East Asia market.The main activities of the project can be divided into three main groups: project management, development of the new dietary supplement - digestive stimulant which corresponds to the requirements of the South-East Asia region (zone 3 and zone 4). It's planned to develop the product on the base of Partners' competences and local row materials - fiber and lactic acid bacteria including development of formula, pre-tests, development of prototype, stability tests (the minimum - 12 months to have rights to register the product in target market), joint marketing activities including development of product's design, marketing materials and joint participation into the 4-5 international fairs of pharmaceuticals and nutritional supplements in South-East Asia in order to overcome barriers of the distance, different business culture and environmental requirements. The main expected outcomes are: a new dietary supplement - digestive stimulant for South-East Asia market ready to be registered (full documents package including at least 12 months stability results (the minimum lenght of shelf-life)),new contacts, developed existing contacts during participation in 4-5 international fairs, signed intention letters or similar agreements on the further cooperation on distribution of EE / LV products. Recognision of the product and producers - project partners - as well production and sale of the produst rising turnover and competetiveness of partners are expected as long-term results of the project.

Bio4ASIA will be contributing to the results indicator of the programme in a way that: 1. There will be more than 2 enterprises working together and sharing their competences and resources in order to achieve the same aim - to widen and diverse target markets: 2 of them will be project partners as well as there will be service providers most likely located in Latvia and Estonia. 2. At least one new product will be developed within this cooperation; taking into account indirect results (experience, new knowledge, tests of the new combinations and/or conditions etc.) it's not excluded that there could be even more ideas of new or improved products to be developed in the future. 3. There will be joint marketing activities sharing existing competencies and developing new knowledge in order to join resources and to become more recognizable as it would be possible for each partner separately. The impact (result) of the project will be measurable by changes of the turnover of both partners and other indicators in a longer period after project implementation considering the time necessary to complete the products stability tests as well as considering the time necessary between the first contacting of the potential partner and the signing of the real sales contract (in particular industry of the food supplements sometimes it can take even up to 5-6 years). It expected that in long term this project will be one more step forward to increase recognition and competitiveness of the Baltic States by the export of high added value products based on local raw materials.