To accelerate growth in the domestic market, SenesTech (NASDAQ:SNES) has launched an online store (https://store.senestech.com) since mid-December 2019. While ContraPest is also available through national and regional distributors, the online offering allows the brand to reach the U.S. consumers located throughout the country.
Products offered online include bait stations, control tanks and feeder trays in both 400 mL and 550 mL capacities. The 550 mL tanks are priced at $35/tank (sold as a single case comprising of eight tanks) and the 400 mL tanks are priced at $30/tank (sold as a single case comprising of twelve tanks).
SenesTech has begun its drive to expand in Southeast Asia by signing a distribution agreement with New Enterprises Ltd for the marketing and sales of ContraPest in Singapore, Malaysia and Indonesia. New Enterprises has agreed to cover the costs of regulatory approval, marketing and importing costs.
Agricultural sector plays an important role in economic development of SE Asian countries. Rat infestation in SE Asia result in 10-20% reductions in rice yield. Chronic loss in rice production caused by rat infestation is estimated to be about 15-17% in Indonesia alone. According to a study conducted by National University of Singapore, estimated the cost of rodenticides and loss incurred by non-native rats to rice production to be about $2 billion in SE Asian countries. Therefore, expansion into Southeast Asian markets is crucial.
Besides reducing the yield, rat proximity to human food poses a serious health concern. Currently employed rodent control strategies, including fumigation, electrocution, zapper traps, glue boards, baits and poisons, are reactive rather than palliative. Despite resorting to such efforts, rats continue to devour crops. Natural rodent predators, including snakes, cats and birds of prey, have been effective especially near grain-storage areas but pose new issues like killing non-target animals and human health risk. We think one of the effective ways to control breeding is using ContraPest. Once the community is convinced of its effectiveness, it could become easier to implement SenesTech’s strategy across affected regions in SE Asia on a broader scale.
Management has realized that there was a real need for curbing rat population in SE Asia. Expansion in the region could help maximize sales and drive repeat purchasing. SenesTech is making small waves by rethinking the approach to minimize rats as well as making it easy for consumers to purchase from their online store.
DISCLOSURE: Zacks SCR has received compensation from the issuer directly, from an investment manager, or from an investor relations consulting firm, engaged by the issuer, for providing research coverage for a period of no less than one year. Research articles, as seen here, are part of the service Zacks provides and Zacks receives quarterly payments totaling a maximum fee of $30,000 annually for these services. Full Disclaimer HERE.