KUALA LUMPUR: Sozo Global Ltd, of which Khazanah Nasional Bhd controls a 10.43 per cent stake via Agro Treasures Sdn Bhd, is investing RM15 million to set up a halal processing plant in Penang.
Chief executive officer Shen Heng Bao said: “It is most likely to be at Penang Science Park, Seberang Prai. We hope to conclude the deal by year-end and the plant construction should start next year.”
Since its inception in 2005, Sozo makes ready-to-serve meals, frozen vegetables and canned foods such as fruits and seafood.
It also produces vacuum fried food and asparagus tea. Sozo’s products are currently marketed under brands such as Geleifu (Green Food), Hengbao Food and The Four Seasons Farm.
Sozo is banking on tapping Malaysia’s halal food stature in the global arena to penetrate the booming global halal food segment worth US$2 trillion (RM6.22 trillion).
It has signed a memorandum of understanding with the Malaysian Halal Development Council.
“We want to leverage on Malaysia’s reputation as a halal food hub and gain certification to penetrate the Middle East, Asean, the US and Europe’s halal markets,” he told reporters at a briefing here yesterday.
Sozo has invested 120 million yuan (RM58.56 million) in a modern duck farm and its third production plant in China, specifically for halal-certified products.
This is estimated to increase Sozo’s production by 37 per cent and maintain its profit margin at above 30 per cent next year.
Shen said Sozo is targeting a secondary listing on the Singapore Stock Exchange in the third quarter of next year.
“We estimate to raise about S$20 million to S$30 million (RM49.2 million to RM73.8 million) from the exercise,” he said.
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“We are a cash rich company and do not need to raise a lot of money,” Shen said at a briefing yesterday.
As at June 30, Sozo, which is lised on Bursa Malaysia, has cash and cash equivalent of RMB450.9mil (about RM220mil), with total borrowings and debt securities of RM11.6mil.
The company raised RM44.3mil from its initial public offering (IPO) on Bursa Malaysia last December.
Corporate advisor Alex Khor said Sozo had appointed advisors for its IPO in Singapore and was working on its prospectus. The process usually took about nine to 15 months and is targeting a listing only in the second half of next year.
The group, which derives more than 80% of its revenue from ready to serve (RTS) food, expects slower sales this year, due to constraints in its output capacity.
Production is already at maximum capacity and the third production facility is being constructed in China.
“With the third factory expected to be completed by year-end, we expect our installed capacity to increase by 37.5%,” he said, adding that Sozo was trying to penetrate into the South-East Asian market next year.
Presently, more than 90% of its products are for the China market.
“We have submitted our application for an export licence for poultry products to Singapore; two assessments have been made by the Singapore authorities,” Khor said.
The group hopes to penetrate into Singapore, Indonesia and other Asean markets.
Shen said Sozo wanted to leverage on Malaysia’s reputation as a halal food hub and certification to penetrate the Middle East markets.
Meanwhile, Sozo is also looking for land in Malaysia to set up a halal processing plant and has allocated RM15mil for the purpose. It hopes to conclude its land acquisition by year-end and construction to start next year.
“We have seen some locations but have yet to decide on them. We are also looking at potential places in Johor Baru,” he said.
Sozo is looking for a location that has access to ports and workforce, as well as assistance from the authorities.