Swings and roundabouts for Tas Alkaloids business

By Sharon Webb

Tasmanian Alkaloids at Westbury will cut operating hours and workforce in opiate production at the same time as announcing a new market for its medical cannabis product.

While it is rumoured 20 positions may be made redundant, CEO Ross Murdoch said job cuts numbers hadn’t yet been decided.

But in late April the company announced an agreement to sell medical cannabis to Melbourne-based Avecho Technologies.

Avecho will buy Tas Alkaloids’ natural cannabis products to combine with its own TPM technology to investigate increasing the oral absorption of natural cannabinoids.

TPM is being developed to create injectable, oral and topical products for the human health market but will also be used to enhance the feed efficiency and health of livestock.

According to Tas Alkaloids’ chief operating officer Brad Blackaby, ‘By providing the initial raw ingredient in this way, we facilitate our partners’ ability to produce an improved commercial product, improve the quality and options for patients and gain the benefit of a long-term supply agreement.’

Dr Murdoch said Tas Alkaloids is currently consulting with employees and unions on the job cuts. ‘This is not a cost-cutting move. It’s a recognition of what’s happening in the market.’

He said the company’s diversification into medicinal cannabis over the last few years gives it the opportunity to potentially redeploy people into that area of the business.

‘We are also looking to accelerate capital works on-site.’

As demand for medicinal cannabis increases, Tas Alkaloids is adjusting longterm to a world-wide decreased demand for its opiate product.

‘There has been a steady decrease in global demand for alkaloid raw material,’ Dr Murdoch said. ‘It’s stabilising now but it won’t return to 2014 levels.’

Poppy Growers Tasmania chief executive Keith Rice said the job cuts were not unexpected.

‘In 2013 Tasmanian growers were growing close to 30,000 hectares of poppies. Last season it was 12,000,’ he said.

‘Tas Alkaloids has done a top job keeping that complement of staff as long as it has.’

Mr Rice said growers expected no impact on their industry. Farmers have gone through the pain of a reduced market for poppies and diversified into fat lambs, cattle and vegetables.

‘In 2014 President Obama released a white paper on the overuse of prescription drugs and since then the

Tas Alkaloids’ agreement with Avecho seems a natural move. Dr Murdoch took on the Tas Alk CEO position in 2015, moving from his job as Avecho CEO.