TFS in $50m supply deal

Nedlands-based TFS Corporation has signed a $50 million supply deal for its Indian sandalwood oil with US-based Young Living under a five-year agreement.

TFS will supply the oil at $US4,500 per kilogram in monthly shipments beginning from October, with the total contract valued at about $50 million (including fixed annual increases of 2.5 per cent).

“The Young Living agreement adds to the strong momentum of supply contracts TFS has secured this year,” TFS managing director Frank Wilson said.

“Our new customer recorded more than $US1 billion in sales in 2015 across 14 countries, and is intent on growing both its market presence and product range.

“TFS now has multiple supply contracts in place with global customers for both wood and oil products across a breadth of markets including cosmetics, aromatherapy, pharmaceuticals, and traditional wood uses, meaning the vast majority of our harvests are now forward sold through to 2021.”

Last week, TFS reported a 20.2 per cent drop in net profit to $90.1 million for the 2016 financial year, but was bullish on the year ahead.

TFS shares were 1.9 per cent higher to $1.57 each at 10am.