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OCEANUS Group Limited gave updates on Thursday regarding its memorandum of understanding (MOU) with BioValence Sdn Bhd to set up a joint-venture (JV) company in China to distribute shrimp in the country.
The MOU was inked in January, and the parties have recently concluded their feasibility studies and have initiated discussions in relation to implementation plans with a view to finalising the definitive agreement to launch the joint venture in early 2016.
Under the MOU, Oceanus and BioValence "shall use their best endeavours to incorporate the China SPV (special purpose vehicle) and execute the definitive agreement in relation to the joint venture as soon as practicable" within one year from the date of the MOU.
Oceanus and BioValence shall hold 40 per cent and 60 per cent stakes in the China SPV respectively. The SPV shall operate as an independent profit centre, with a capital injection of up to S$1 million. Further operating expenses shall be funded through sales revenue.
BioValence shall establish a facility for the production of RSPF (rapid specific pathogen free) shrimp in Penang with a capacity to supply up to 500,000 RSPF juveniles or 75 per cent of the estimated annual China SPV demand, whichever is higher.
Oceanus shall be responsible for the import of the RSPF juveniles into China by putting forward purchasing orders at RM50 per piece or at a price agreed by the parties for the first four years. The RSPF juveniles will then be sold by Oceanus to the China SPV at RM60 per piece.