KUALA LUMPUR (Sept 22): Rhone Ma Holdings Bhd, via its subsidiary A2 Fresh Sdn Bhd (A2FSB), has entered into a joint venture (JV) agreement with Kulim (Malaysia) Bhd to develop, operate and manage a potential dairy project.

In a Bursa Malaysia filing today, the animal health solutions provider said the initial investment required for the project will be up to RM41.39 million, which will be funded through equity in the form of subscription of shares by the shareholders in proportion to their shareholding ratio in the special purpose vehicle (SPV) company.

According to the group, the business of the SPV is to undertake the dairy project and to engage in all other related activities to implement, support, and enhance the business and transactions in relation to the project. 

Based on the agreement, Kulim will be the largest shareholder in the SPV with a 65% stake while the remaining 35% will be held by A2FSB. 

“The dairy project is developed to increase the nation’s milk production to reduce dependence on imported milk and it aims to produce up to 11 million litres of fresh milk a year. 

“The JV will allow Rhone Ma to expand the footprint of its dairy farming business in the southern region of Peninsular Malaysia whilst leveraging on the financial resources of Kulim,” it said. 

Notably, Kulim is principally involved in oil palm plantations, investment holding and property investment in Malaysia, and is a subsidiary of Johor Corporation. 

“The JV will not have any effect on the issued share capital and substantial shareholders’ shareholdings of the company but is expected to contribute positively towards the consolidated earnings and net assets per share of Rhone Ma for the financial year ending Dec 31, 2021 (FY21),” it added. 

Rhone Ma principally offers animal health services as well as the manufacturing and distribution of animal health products. It is also involved in the distribution and supply of food ingredients.

At noon break today, shares in Rhone Ma were unchanged at 67 sen, giving it a market capitalisation of RM133.61 million.