Back in the game: Why Life-Space's former boss is returning to the biotics business after bumper 2018 sale

In 2018, Silbery sold Life-Space for AUD$690m to major China health foods company BYHEALTH. He stayed on as chief executive of Evolution Healthcare – the company which owns the Life-Space brand – and left in 2020.  

He recently bought the assets of Queensland-based contract manufacturer Probiotics Australia.

In about three months’ time, his company Specialty Probiotics Australia, will start to manufacture its first ingredient at the factory which is currently undergoing renovation.

“We already have very strong interest, and we have customers ready to start working with us.​

“We're renovating the site at the moment and there are some key equipment that we've had on order for a little while that are due to land soon, so we've got about three months before we start to manufacture an ingredient,” ​he said.

By early next year, he hopes to start manufacture finished products as well.

Aside from probiotics, the site will also produce postbiotics ingredients that could be made into gummies, bone broth, and dog food – which is related to Silbery's pet nutrition business known as ilume.

The plan does not stop here, however. 

Over the next two to three years, he will be investing up to AUD$40m (US$26.8m) to upgrade the facility's production capability.

This includes the ability to create products in new dosage and packaging formats, as well as higher concentration products which he says will help cut cost and offer more competitive pricing.

“Manufacturing bio cultures is highly technical. To produce the best ingredients, you need to reduce exposure time to very small water particles and also oxygen, amongst other things.​

“There are several critical stages of the production process that require investment in very high-tech equipment to achieve this and these are not the sort of equipment you can buy off the shelf. Some of these are custom made, with very long lead times, well in excess of 52 weeks,”​ he said.

What Silbery is aiming through the endeavour, is to make Australia a world-class location for probiotics and postbiotics ingredients manufacturing.

Currently, Japan, Taiwan, South Korea, and China are some of the places in Asia-Pacific where probiotics ingredients are commonly produced.

Australia-based companies will thus need to procure probiotics ingredients from overseas. During the transportation process, probiotic ingredients could be subjected to degradation.

“Today, some of the challenges that the probiotics industry has is that with the overseas suppliers, you are transporting this very delicate ingredient to Australia, and it just takes one breakdown in that supply process to degrade the ingredient."​

Most dietary supplement contract manufacturers in Australia are also hesitant to deal with the “high-risk” ingredient, as one wrong move could lead to financial losses, he said.

“From a pricing point of view, the contract manufacturers in Australia see probiotics as really high-risk ingredients to be dealing with.​

“They can have an issue and end up having a financial dispute with a supplier, or they have new members in their team, and they made a mistake, and suddenly, they’ve lost $50,000.”​

Most contract manufacturers in Australia also specialise in vitamins, fish oil, and herbal supplements, and might not necessarily possess the expertise in manufacturing probiotics, he said.

He hopes to change the current landscape through Specialty Probiotics Australia. This will also allow companies to tap on the prestige of made in Australia products and market their products as made in Australia - which they are otherwise not allowed to do so if the probiotic ingredients are not sourced locally, he said. 

“I feel that Australia should have the capability to manufacture this, to play a role in this industry and today, I believe Australia can actually lead the world and set new benchmarks and levels of excellence in the manufacturing of probiotics."​

Self-collected strains library and new benefit areas​

With a library of 60 probiotic strains collected from all over the world, the company will be manufacturing probiotics ingredients that are both commercially available and not yet sold in the market.

Silbery amassed the collection while travelling around the world.

“I was visiting researchers and small fermenters that were developing strains and working on research, so they may be specialty strains such as isolated from healthy human breast milk, they could be isolated from urogenital regions or healthy athletes for example.​

“Through those years, I brought up the network and there were several, I guess, close collaborators that I worked with, and these relationships have been fostering over many years and that has led us to where we are now, which is to be able to offer these world class, world leading strains to Australian producers,” ​he said.

Some of the countries that the strains are sourced from include Spain, Norway, Japan, Sweden, Denmark, and North America.

Health benefits of the strains range across immunity, gut health, as well as new areas such as anti-ageing, women’s health, and mood.

How did the opportunity come about​

The plan to start another human health probiotic business has been on Silbery’s mind for a few years now.

In fact, he did run a feasibility study on building a fermentation facility back in 2019.

“I did do a feasibility study with a European fermenter that had almost 100 years of experience in that area, and looked at a joint venture with them in 2019, and I had approval from BYHEALTH to work on that project.​

“That project was going to be a very expensive 60 to 80 million dollar investment with an over three or four years process behind it, and it was probably just too much and too long to bring them to market,”​ he said.

The planned investment to upgrade the current Queensland site is around AUD$40m, which he said was a significantly lower amount than expected.

Silbery owns 60 per cent of the Specialty Probiotics Australia business, with private equity group H&S Investments holding the other 40 per cent.

The company is currently made up of key individuals from Probiotics Australia and some former members from Life-Space.

Silbery acknowledges that he is not as interested in creating brands anymore, but remains intrigued by live bacteria and what they can do. 

“I remain fascinated by these little, live, living organisms and I like making things, and creating brands is really really hard and is a long journey and it takes a lot of determination.​

“Manufacturing and making ingredients are difficult but it's more predictable, and you’ve got one step ahead, one foot ahead of each other as you go, and you're learning, learning, learning.​

“Creating a brand is a different art form, and I'm not so much interested in creating brands anymore, but certainly creating something that's very unique and can make a difference in health outcomes of humans and dogs and cats, and horses, that's really exciting for me,” ​he said.

Listen to the podcast to find out more about Silbery’s journey and his current project.