Tristel pulls plug on supply arrangement

TRISTEL, the contamination control and hygiene products manufacturer based near Newmarket, has sought to assure investors that the end of a supply arrangement for a range of disinfectants will not affect its earnings.

Snailwell-based Tristel has terminated its supply arrangement with Medichem, to which it became principal supplier following its acquisition of the intellectual property and manufacturing rights for the products in 2009.

Since then, Tristel’s sales to Medichem have been worth around �2million a year, but the East Anglian company now plans to market the products directly to veterinary practices, hospitals and industry under Tristel-related brands.

Tristel said that its manufacturing plant would continue to produce the products and its ownership of the ISO accreditation for the manufacturing process and the CE marks authorising use of the products meant it was well placed to ensure continued supply to the marketplace.

It said it believed that the enhanced margins achieved under direct supply arrangements would help offset the short term disruption which would be caused by the termination of existing arrangements.

Paul Swinney, chief executive of Tristel, said: “The termination of this arrangement, whilst not planned, will give Tristel the opportunity to utilise its sales team in these new areas.

“Whilst there will undoubtedly be some short term disruption, we see this as a positive opportunity in the medium term and beyond.”

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Broker FinnCap said that, in view of Tristel sticking to its previous guidance, it was leaving its own forecasts unchanged, but it added that “given the potential margin improvement, maintaining the current sales estimates actually means Tristel capturing less end market share than that enjoyed by Medichem.”

Tristel said it estimated that the aggregate sales value of disinfectants supplied to the United Kingdom veterinary market was approximately �5million.

“The products manufactured by Tristel account for approximately 60% of this total,” the company added.