KUALA LUMPUR (Jan 7): Engineering services company Minetech Resources Bhd is teaming up with a local private company to import and trade processed food products from South Korean food manufacturer Samyang Food Co Ltd.
In a bourse filing, Minetech said its wholly owned Diman KS Chin Sdn Bhd (DKSCSB) had on Friday (Jan 7) inked a teaming agreement with Vitamin 2U Sdn Bhd (V2SB) for the trading business.
As such, it is proposing to diversify into the business of food and beverage (F&B) trading.
Under the agreement, DKSCSB shall be primarily responsible for the sale of the products to local wholesalers and/or retailers. VS2B, on the other hand, will manage the daily operations which include sales, marketing and delivery of the products, submission of purchase orders, as well as liaising with the supplier and relevant authorities.
V2SB is principally involved in the trading and distribution of goods and services. Its sole shareholder Lee Byoung Jin is from South Korea.
“The execution of the teaming agreement with V2SB also provides Minetech group (with) an added opportunity to venture into the F&B industry, so as to mitigate its reliance on any particular business segment and to create an additional revenue stream for the group, moving forward,” Minetech said.
The board expects the new business to contribute 25% or more of the group’s net profit or net assets, moving forward.
Minetech's financial year ends on March 31. The company has been loss-making for the last five years between FY16 and FY20. It managed to turn around in FY21 with a net profit of RM916,000, on a revenue of RM95.02 million.
However, for the six months ended Sept 30, 2021 (6MFY22), the company posted a wider net loss of RM7.14 million, compared with a net loss of RM4.29 million a year ago, dragged by higher costs of sales, administrative expenses, as well as selling and marketing expenses.
Minetech shares closed unchanged at 10 sen apiece on Friday, valuing the company at RM117 million.