Frankly Speaking: Sanichi’s unaccomplished missions

TheEdge Tue, Feb 13, 2024 12:00pm - 3 months View Original

This article first appeared in The Edge Malaysia Weekly on February 12, 2024 - February 18, 2024

Sanichi Technology Bhd last week terminated a memorandum of understanding (MoU) that the company had signed five years ago.

In December 2018, the company announced that it had entered into an MoU to form a joint venture with Singapore-based outfit FKS Holdings Pte Ltd in which it would hold a 70% stake.

The lofty plan then was to provide fresh produce to the international food and beverage industry, namely seafood, wagyu beef, fruits and vegetables. The plan included setting up 25 outlets in three years.

The termination of the MoU was because both parties had lost interest in the business collaboration due to unfavourable market sentiment.

A month before signing the MoU on its venture into the supply of fresh produce, Sanichi had announced that its financial technology (fintech) subsidiary Bina Bicara Sdn Bhd was “aiming to secure a healthy piece of a US$2.7 billion outward money remittance business from Malaysia to Indonesia”. The statement, filed with Bursa Malaysia, said the unit would enter into an equity joint-venture agreement with “one of the biggest public-listed government-linked companies in Indonesia to provide money remittance services”.

There has not been any update on this venture since, while Sanichi continues to seize other diversification opportunities.

In May 2020, Sanichi announced on Bursa that it had entered into an MoU with PNE PCB Bhd, AT Systematization Bhd and US-incorporated Arzon Solar LLC to form a JV company to produce medical-grade mechanical air ventilators. This MoU was terminated two years later with Sanichi saying all parties agreed that “the demand for mechanical air ventilators had reduced tremendously in parallel with the improving situation of Covid-19 globally”, according to a bourse filing dated June 29, 2022.

In 2020, Sanichi also entered into a collaboration agreement with PDZ Holdings Bhd to jointly develop and operate a regional e-commerce logistics hub in Desaru, southern Johor. There has been no update on this venture either.

In the following year, Sanichi wanted to diversify into glove manufacturing, but this did not materialise as the global demand for gloves had returned to normal.

Sanichi’s core business is the fabrication of precision moulds and property development. The company has been loss-making for several financial years.

Sanichi may not have suffered any financial loss when its diversification plans did not come to fruition. Nonetheless, this may have resulted in the perception that the company was making such announcements just to draw investor attention, although that might not have been its intention.

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