KUALA LUMPUR (Aug 18): VS Industry Bhd (VSI) said it had signed an agreement with Victory Innovations Company Inc (Victory Inc) to manufacture and supply cordless electrostatic sprayers on a box-built basis.

According to VSI’s exchange filing today, the supply agreement was signed between Victory Inc and VSI’s wholly-owned unit Guardian South East Asia Pte Ltd.

Under the agreement, Guardian shall provide manufacturing, supply chain and logistic services to Victory Inc in accordance with the specifications and purchase orders, with effect from yesterday.

However, VSI said today, no contract volume or amount was specified.

“The board expects the agreement to contribute positively to earnings of VSIB from the second half of the financial year ending July 31, 2021 (2HFY21) onwards. The agreement will have no effect on the issued capital of the company,” it said.

In addition, the group noted some risk factors affecting the agreement that include availability of skilled manpower and materials, changes in pricing, market demand volatility, competition and foreign currency rate fluctuation.

“Notwithstanding the above, VSIB has a proven and established track record in undertaking electronics manufacturing services that would help mitigate such risks.

“Having considered all aspects of the agreement, the board is of the opinion that the agreement is in the best interest of the company,” added the group.

In a separate statement, VSI managing director Datuk SY Gan said Victory Inc is leading the charge in infection prevention and helping fight the spread of disease across the globe. 

“We have to hit the ground running and work as fast as we can to roll out the products as we understand both handheld and backpack sprayers are currently out of stock due to extreme demand brought about by Covid-19.

“The ongoing US-China trade dispute provides us the opportunity to establish this relationship with Victory. VS continues to be a beneficiary of the trade war as MNCs (multinational corporations) from the US are looking to shift or diversify their manufacturing base to Southeast Asia,” said Gan.

Gan added that VSI’s business development team is kept busy pursuing opportunities from the trade diversion and continues to engage in active discussions with prospective customers.

“Meanwhile, our relationships with our existing key customers remain strong and healthy.

“All in all, despite the pandemic, VS’ long-term outlook remains bright, underpinned by our solid fundamentals, strong execution skills, recent addition of a new key customer and potential future contract wins,” he said.

In a separate filing, VSI announced that trading of its securities as well as structured warrants had been halted with effect from 9am today.

“Kindly be advised that trading of VSI securities will be halted with effect from 9am, Tuesday, Aug 18, 2020. Accordingly, trading of structured warrants relating to VSI will also be halted at the same time.

“Trading of the above securities will resume with effect from 10am, Tuesday, Aug 18, 2020,” said the group.