KUALA LUMPUR: Health supplement company Bioalpha Holdings Bhd (BHB), through its wholly-owned subsidiary, Botanical Distribution Sdn Bhd (BDSB), signed a joint venture (JV) agreement with RS Unggul Sdn Bhd (RSU) for the issuance of 4.9 million new ordinary shares in RS Bio Sdn Bhd (RBSB) to GV Global Venture Sdn Bhd (GVG), an associate company of RSU.
RBSB is a JV company between BDSB and RSU.
Upon completion of the allotment of new RBSB shares, BDSB shall hold 51 per cent stake in RBSB, while the remaining 49 per cent stake is held by GVG.
RSU is principally involved in the manufacturing and supply of agriculture and food products, including but not limited to groceries, pharmaceutical products, medicines and original equipment manufacturer (OEM) health supplements.
The company currently has about RM20 million supply contracts on hand, with the potential to secure up to RM50 million worth of new contracts in the next 12 months.
One of RSU's major customers is Koperasi Permodalan Felda Malaysia Bhd (KPF), the cooperative controlled by Federal Land Development Authority (Felda) settlers.
KPF owns and operates a chain of 201 D'Mart convenience stores nationwide located within Felda settlements, with 187 outlets in Peninsular Malaysia and 14 outlets in Sabah.
These shops serve some 2.6 million Felda settlers and their families, comprising approximately 200,000 households.
Further, RBSB will therefore undertake the supply of a wide range of over-the-counter (OTC) products, health supplements, functional foods and grocery offerings to RSU's customers, including KPF's 201 D'mart stores.
With orders firmly in hand following the JV agreement, BHB shall immediately manufacture and supply various health supplement and functional food products under original design manufacturing (ODM) basis, including Tongkat Ali coffee, Choco Malt and Royal Milk Tea premixes.
BHB managing director William Hon said the tie up with RSU will enhance the range of offerings, including those supplied to D'Mart convenience shops.
"The JV arrangement aligns both companies to better serve the people of Felda, leveraging on each party's expertise and experience to grow both businesses.
"As RSU is an existing supplier to KPF, we shall leverage on the company's established network to carry and introduce health food and supplement offerings to the Felda settlers," he said in a statement today.
He said for BHB, this collaboration will broaden the company's distribution reach to D'Mart stores.
"As we progress along, we look forward to serving the Felda settlers while positioning the Group for future success," he said.