It has been announced that Gateway Distributors Limited, a publicly
trading Company (NASDAQ OTC-BB: GAWD), has signed a substantial export and
wholesale distribution contract for a period of 10 years, worth over 1.5
billion US dollars, with a major chain of health & dietary supplements
stores operating in South-East Asia and Indian sub-continent.
The principal activity of Gateway Distributors Limited, headquartered in
Las Vegas, Nevada, is to distribute whole food nutrition, health and dietary
supplements and environmental solutions. The Group has been in business
since 1993 and markets and distributes eighteen different nutritional and
health products under the trademark of the Right Solution. Currently, the
Group sells its products primarily in the USA and Canada as well as in
Japan. Some of the products covered by the Group include Fulvic Factor, Body
Gard™ with Lactoferrin, Lifetonic, Master Formula, Natural Immunity, New
Life Corrective A, SuperFood, etc.
The Company’s management made its best effort to achieve wider
international sales for its products which ultimately culminated in signing
the long-term contract with Guandong Zhongua Group Ltd., headquartered in
Hong Kong, a major South-East Asian chain of over 6,000 health and food
stores located in over 15 countries. The Group has principal operations in
China (over 2,000 stores), South Korea (250 stores), Malaysia (128 stores),
Indonesia (360 stores), India (1,500 stores), as well as in other countries
in the region such as Thailand, Philippines, Bangladesh, Singapore, etc. The
combined population of the region covered by the Group is about 2.8 billion
people (over 40 per cent of the total population of the Earth) and consumers
in these countries have been increasingly conscious of the latest
developments in the dietary and nutritional supplements, such as those
distributed by Gateway Distributors Limited.
The contract envisages annual supplies of $ 50 million worth of products
gradually rising to $ 300 million over the life-time of the contract, likely
to bring healthy revenues to the Company which enjoys substantial margin on
its sales. The Company has already entered into negotiations with several
major international banks to obtain lines of credit and trade finance which
would allow it to fulfill its obligations under this Contract. Securing
financing looks very promising taking into account financial stability and
huge size of the contract’s counter-party, Guandong Zhongua Group Ltd.,
which had sales of over $50 billion last year.
Most of the analysts covering the stock agree that the coming months will
see significant appreciation of the Company’s stock price, up to the range
of $ 0.10 – $ 0.35. Citigroup Global Markets senior analyst Cynthia La Rocca
covering small cap pharmaceutical and nutritional sector has expressed
opinion that this contract will almost certainly bring the Company into the
medium-level league of the international distributors operating in this
market segment ensuring lasting stability and revenue growth thanks to the
contract size and diversification of its geographical risks due to the wide
coverage provided by its South-East Asian partner.
Further details of the contract are expected to be coming out over the
course of the next weeks.
If you have any questions or comments, please get in touch with us on
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