Xylitol Canada Inc.
(TSX.V:XYL)
President & CEO:Andrew Reid
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Interview Transcripts:
Juan Costello: Good day from Wall Street. This is Juan Costello, senior analyst at the Wall Street reporter and joining us today is Andrew Reid, CEO and President for Xylitol Canada Incorporated. The company trades on the TSX venture, ticker symbol is XYL. Thanks for joining us today here Andrew.
Andrew Reid: Thanks for having me Juan.
Juan Costello: Great, anytime. Now, starting off, give us a brief history and overview of the company here for some of our listeners that are new to your story.
Andrew Reid: Xylitol Canada was founded as a Company called Sweet Diabetic Delight in 2004. The reason for the company’s start-up was to bring a natural sweetener that diabetics could use, low glycemic, low-calorie, low-carb sweetener to replace the sugar or artificial sweeteners that are out there now. And basically we went through a process of watching the Xylitol prices consistently go up and down, pricing go up and down, supply go up and down. So, we came to a conclusion the only way to really bring xylitol to North America was to find a consistent supply and pricing, and in the few years we’ve become a company, we’ve gone down the road to figure out a way to manufacture cheaper and better xylitol in North America and we went public in 2010 last April for the reason of raising money to go down that road and build the plant.
Juan Costello: Certainly. And so, what – talk a little bit about the market opportunity for Xylitol and who some of the key competitors are in the arena?
Andrew Reid: Yes, I mean the big players in the xylitol market in North America would be Danisco who was just acquired by DuPont. They would be the world leader in that area. Most xylitol is coming from outside North America and that’s why it’s relatively new in North America markets, I mean, its well-known in Scandinavian countries, Europe, Asia what not, for all its myriad of benefits in oral health and diabetics and some ear infection prevention. So, you know, it’s large in confectionery the biggest use of xylitol would be in gum/ So, there is a few large players but as I said the cost of xylitol is relatively high for most people who want to purchase it, and our game is to get out there and find a better way.
Xylitol Canada partner with a company called SunOpta BioProcess which was Canada’s largest natural food distribution company. They also had an arm that was working on Biomass conversion to cellulosic ethanol and we partnered with them in 2008 on an extensive R&D project to find a better way to come up with a way to make xylose which we in turn make xylitol here in North America. A big thing that happened last year is SunOpta got purchase by a larger company called Mascoma and from that they put their technologies together and became one of the world leaders in basic xylose, which we will then take and turn, to a hopefully a better and easier way of making xylitol here. And we’ll able to bring a better supply made here in North America to the North American people.
Juan Costello: And is there anything else that you feel makes the company unique from some of the other players in the sector?
Andrew Reid: Well, I mean as far as that we’re going down to two tier system, we’re developing products right now, we’re launching a Xyla brand which is an all-natural and obviously xylitol made in from North American hardwood trees where most xylitol is coming from corn cob right now, outside of North America. We are all North American made front to back, saying that we take the tree or whatever biomass is developed here in North America and we turned into xylitol, we’re not bringing the xylos in, everything is done here. We’re developing our own products as far as mint candies, nutraceuticals, Xylitol is used and basically anything as I said to anti-bacterial so it can be used in a ton of different myriad or different products across the board from foods to all the way to cosmetics. So it’s really unbelievable product that’s under used here in North America right now we’re hoping to change that.
Juan Costello: And, so regarding some of the recent acquisition, do you believe that the company right now is pretty involved to a position capitalize on some of the trends right now in the sector?
Andrew Reid: I do, I mean we acquired a company called Emerald Forest which was a large product development company in the United States. We bought them for, we want to get access to a quick distribution in the U.S. instead of having to developed our own distribution. They are one of the bigger xylitol players in the field right now, So we acquired them in September 2010 and we’ve worked with the company – we’re developing more products for the distribution line and it’s working very well. We hope to see great result this year. Things are looking very positive in that form, as a whole we’re seeing xylitol due to marketing and campaigning and one in the oral field of dentistry we’re seeing a lot the major shows more and more the large dentists talking about xylitol and putting their clients on to xylitol for it’s amazing benefit. It’s a sweetener that’s safe for kids, prevent cavity, fights cavity, low glycemic, low calorie, low carbs and with many more benefits and it’s just a matter of time to people grasp how great this, this product is and that really pull themselves to it.
Juan Costello: And perhaps you can walk us through your background experience Andrew and talk a little bit about the management team there.
Andrew Reid: Yeah, I mean my background, I’m an entrepreneur by trade, I was with the biotech company for 10 years and its sort of how I found Xylitol, it’s in 2004. I was – we were doing with a company and we are developing oral insulin being around diabetic everyday and juvenile diabetics, you know, at that time there wasn’t a lot, they could have for snack or to eat, it was pretty blend, so you know they ended up cheating quite a bit and they would spike their insulin levels and cause problem. So, I was learnt about Xylitol and found an unbelievable product and I thought this product needed to be out there and marketed and people need to know about, I was very surprised at the time it wasn’t very well known in North America. And sort of went on the, went on the drive to bring this to a North American a much bigger way then it wasn’t at the time.
And our management team, which we put together as a board are very strong business people they are very knowledgeable and they are very involved with the company and basically we work together to put this company in a spot for growth, that’s where we’re going.
Juan Costello: And so, what are some of the goals and milestones that you and team, I hope, you know, accomplish over the course of the next year?
Andrew Reid: Well, the biggest goal obviously is to, you know, sell on the full scale cellulosic plant connected with a xylitol plant and that’s been our goal from day one and that’s the path we’re going down. We have a great partner Mascoma who is developing cellulosic ethanol and we hope to be right next door with xylitol plant as a co-product to cellulosic ethanol. So, that’s our main goal, our other major goal obviously to educate the North American people on xylitol, its benefit what it can do for your body and helping you put your body into a proper alkaline state and help get people off sugar. There is you know, a huge problem out there right now with obesity and diabetes and xylitol definitely fits into helping prevent both of those. So, that’s our goal as well, but obviously the focus is the large commercial plant you know, a big part of what happened last year was the acquisition of SunOpta by Mascoma, what that did is put us, in my mind ahead of time. We were supposed to build a pilot plant here in North America, Mascom already has a pilot, so we were able to sort of leap frog, from having to build the pilot plant to going now to a full scale location.
Juan Costello: Great. And as far as investors in the financial community are concerned, do you believe that the company story and your message and ultimately the company’s full upside are completely understood and appreciated by them?
Andrew Reid: I think they understand the need for a bio refinery when it comes to Ethanol and the need to co-products with these greenhouse projects that are being built to bring more value to the project. So, in that case yes, Xylitol is a whole I think people are still learning and that’s part of the company’s strategic, you know, marketing place to educate them. We brand ourselves Xyla, we’re launching our products under Xyla brand, X-Y-L-A and when pick up Xyla they know it’s a North American product. It’s made from North American hardwood trees and produced here in North America is not coming from outside of the states or Canada where most Xylitol is coming from outside of North America. So, that’s our goal and I think, you know, our strategy to all this to let people know where we’re coming from and where we’re going to.
Juan Costello: And so once again joining us today is Andrew Reid, the President and CEO for Xylitol Canada Incorporated. The company trades on the TSX venture, ticker symbol is XYL. Currently trading at 35 cents a share, the marketed CAP is north of 22 million. And before we conclude Andrew to recap some of your key point to your, why do you believe that investors should consider the company as a good long term investment opportunity?
Andrew Reid: Well, the sweetener sector is always a big one, people are always looking for new products obviously right, and today’s society health is a major issue. As I mentioned before the obesity and diabetics this fits into both those areas, you know, we’re are a natural product and people are gear towards natural products right now. We are partner with a company that’s using biomass to create fuel which is unbelievably it’s, you know, it’s one of those things obviously with what’s going on in the world right now it’s a topic and so is xylitol. Its a food which people need and a sweetener that can help in many ways, while still giving you the sweetness that people are desiring and they will never walk away from sweets, you [Indiscernible] [0:12:13] for. I think we are in a good spot and I just see a lot growth with the company and I, you know, feel pretty good about that.
Juan Costello: Well, we certainly do look forward to continue and attract the company’s growth and report on your upcoming progress and I like to thank you for taking the time to join us today Andrew and update our investors on Xylitol.
Andrew Reid: Thank you very much Juan, I appreciate