In 2007, Haw Par Healthcare faced several challenges. The depreciation of the US Dollar (which is the currency transacted in various key markets), coupled with an unusually warmer winter in Europe, depressed revenue growth.

Markets such as India, Hong Kong, China and Thailand were the main drivers of growth in the sales of Tiger Balm brand products. The change in India’s business model saw a substantial increase in sales in 2007 over the previous year’s with the sizeable increase in advertisement and promotional funds invested by our Indian partner. Similar licensing models are being considered for other selective markets.

In the US market, to keep up with the intense competition and to appeal to the younger consumers, advertising through non-traditional media such as YouTube and Google on the Internet were made and was very well-received. Tiger Balm Back Pain Patch was also introduced into the US market which was met with encouraging acceptance by trade and consumers. Unfortunately, our products also faced delisting threats from some chain stores which are becoming more demanding.

Tiger Balm was awarded the Certificate of Special Congressional Recognition for its service to the community in California by the Honourable Mr Tom Lantos, US Congressman. The ceremony was held on 8 December, 2006 and the award was received by Mr A K Han, Executive Director of Haw Par Corporation on behalf of Tiger Balm. The community service was sponsored by Tiger Balm and implemented by our USA distributor, Prince-of-Peace.

Following its successful launch in Singapore in 2005, Tiger Balm Neck & Shoulder Rub was launched in Hong Kong in 2007 with reasonably good acceptance by the trade. The product was also launched in Thailand in February 2008. A line extension for Tiger Balm Neck & Shoulder Rub was introduced in Singapore in 2007 to meet the needs of consumers who require a stronger version. This new product is branded Tiger Balm Neck & Shoulder Rub Boost. The two versions accorded us higher visibility and image for our brand at the retail level.

Recently, our product registrations were approved and we have appointed a distributor for the Vietnam market. This is a potentially large market for Tiger Balm and Kwan Loong although the competition there is keen.

We continue to face many local challenges in the markets that we compete in. In China, our product registrations and licenses have suffered some unexpected delays. Changes in some of our distributors’ manpower had direct impact on our business. We have preempted this to some extent with the appointment of our Country Managers in the key markets. The cost of our key raw materials, camphor and menthol, have escalated and is projected to continue increasing, thereby affecting our margins.