KUALA LUMPUR (March 20): China-based XingHe Holdings Bhd has entered into a joint venture (JV) agreement with My Ocean Venture Sdn Bhd (MYO) and VC Marine Sdn Bhd (VCM) to venture into the seafood processing business.

In a filing today, the company said its 90%-owned subsidiary XingHe-Jefi Sdn Bhd and its JV partners will establish a company under the name Sea Tuna Industry to undertake the business of tuna and other seafood processing and trading.

Under the JV agreements, XingHe-Jefi will hold 52% of the shares, while MYO and VCM will hold 35% and 13% respectively in Sea Tuna Industry.

“The proposed JV is intended to unlock alternate business opportunities and to enable XingHe group to expand its business by having a new Malaysian-based business in tuna and seafood processing and trading to supplement its existing production, blending and marketing of peanut oil and other edible vegetable oil, all of which are based in China and hence to provide an additional income stream for XingHe group,” it said.

MYO is a private limited investment holding company which is 50%-owned by Leong Keng Wohand, who has interests in companies engaged in the supply of lubricants and provision of logistics services.

Yu Pao-Chu — a substantial shareholder and president of Thai Ocean Venture Co Ltd — holds the remainder of shares in MYO.

VCM is an investment holding company which is 99.99% owned by Datuk Gooi Kok Song, who has interests in companies involved in the supply of tyres and lubricants.

XingHe-Jefi will make a capital contribution of RM7.5 million out of the agreed issued share capital of RM14.5 million, which will be funded by internally-generated funds.

XingHe-Jefi’s obligations include the provision of a suitable location for the establishment of a processing plant and securing the necessary licences and approvals.

Meanwhile, the JV partners will provide the technical know-how and expertise for the construction of the plant, procure a consistent supply of input for the plant, manage and offtake of finished products from the processing plant to customers and procure all necessary food safety certifications.

The proposed JV is expected to be completed in the second quarter of 2018.

XingHe’s share price went up 0.5 sen or 9.09% to six sen, giving it a market capitalisation of RM154.41 million.