KUALA LUMPUR (Jan 29): Mestron Holdings Bhd is the latest company to propose venturing into the Covid-19 vaccine distribution business.

The steel pole maker said it has inked a Heads of Agreement (HOA) with China-based Zhongyu Yexing (Chengdu) Industrial Co Ltd to distribute the Covid-19 vaccine in Malaysia.

In a statement, Mestron said it expects to invest up to RM20 million for this business venture, which will be funded via internally-generated funds, bank loans and proceeds from a private placement.

Zhongyu is part of the Sino Pharma Group of Companies, and is one of the authorised distributors for Sinopharm’s China National Biotech Group Covid-19 vaccine.

It said pursuant to the HOA, Mestron and Zhongyu have jointly agreed to commence discussions on the structure and terms of the proposed collaboration, where both parties are expected to finalise and enter into a definitive agreement within 30 days of discussions.

Mestron’s managing director Por Teong Eng said the company has obtained the clearance letter from the Ministry of Health to commence negotiation and cooperation with any company from China for the importation, distribution, sale, marketing, use and application of the Covid-19 vaccine in Malaysia.

“We are currently in the midst of negotiating with Zhongyu on the details of our potential collaboration. Once we have firmed up the terms, we will submit an application to the National Pharmaceutical Regulatory Agency (NPRA) to register and get approval for the distribution of Covid-19 vaccine in Malaysia.

“Zhongyu, on the other hand, will provide all support to ensure Mestron obtains NPRA’s approval for the registration and distribution of Sinopharm CNBG Covid-19 vaccine in Malaysia,” said Por.

He added that once the company has obtained all necessary approvals, Zhongyu is expected to supply an estimated three million doses to Mestron in stages.

Shares of Mestron ended one sen or 4.55% lower at 21 sen today, for a market capitalisation of RM185.32 million.