KUALA LUMPUR (Feb 6): After more than five years in talks, precision plastic mould maker Sanichi Technology Bhd has aborted plans with Singapore-based FKS Holdings Pte Ltd to provide fresh produce such as seafood, wagyu beef, fruits and vegetables to international food and beverage (F&B) industry players. It did not reveal the reason.

In a bourse filing on Tuesday, ACE Market-listed Sanichi said the two companies had mutually agreed to terminate the memorandum of understanding (MOU) signed in December 2018. Both companies also agreed that each party will not make any claim against the other party due to the termination.

It added that the termination does not have any financial impact on Sanichi Group.

In December 2018, Sanichi and FKS had inked the MOU with the intent of forming a joint venture (JV) to supply fresh produce for the international F&B industry, as well as provide Japanese fine dining cuisine for regional markets, namely Singapore, Malaysia, Indonesia, China and Australia.

Under the MOU, Sanichi was supposed to own 70% of the JV company, while FKS would own the rest.

When the group announced the MOU, it noted that the JV was expected to set up 25 Japanese fine dining outlets over three years and collaborate with suppliers in Japan for fresh produce to be supplied to international F&B players.

Sanichi has been loss-making for its prior three financial years. More recently, the group returned to the black with a RM470,000 net profit for the third quarter ended Sept 30, 2023 (3QFY2023) versus a net loss of RM12.24 million a year earlier, despite revenue slipping 20.8% to RM3.42 million from RM4.32 million in 3QFY2022.

However, the return to quarterly profit was insufficient to offset the group’s losses recorded in preceding quarters, leading to a cumulative net loss of RM13.08 million for the nine months ended Sept 30, 2023 (9MFY2023).

The group has since changed its financial year end from Dec 31 to March 31, citing “to have a better planning of its financial resources”.  

Shares in Sanichi ended half a sen or 25% higher at 2.5 sen on Tuesday, valuing the group at RM29.23 million.