Bioalpha partners with HK-listed Ritamix to manufacture dietary supplement
02 Dec 2020
Health supplement group Bioalpha Holdings Bhd has been appointed by Hong Kong-listed Ritamix Global Ltd as a contract manufacturer to make and supply a longevity dietary supplement.
“We are expecting multi-millions of orders from Ritamix for the Malaysia and China markets,” Bioalpha managing director William Hon said in a virtual press conference today.
The supplement product contains the nicotinamide mononucleotide (NMN) compound that can help restore energy and reduce typical signs of ageing such as gradual weight gain.
“The NMN market is forecast to grow to approximately 100 billion renminbi (RM62 billion) in the future,” Hon quoted Chinese research house CITIC Securities as saying.
He added that he expects NMN products to deliver a gross profit margin of 50% based on the selling price to Ritamix.
Apart from its longevity benefits, there are also research studies currently being conducted on NMN’s effect of improving immunity system as a control measure against Covid-19 infection and illness, said Hon.
“We are thrilled with the prospects and potential of NMN compound. As such, together with Ritamix, we are appointing Universiti Teknologi Malaysia to conduct research to substantiate and validate the efficacy of NMN along with its longevity benefits and immunity-boosting properties,” he added.
The collaboration agreement between Bioalpha’s wholly-owned subsidiary Bioalpha International Sdn Bhd and Ritamix was held earlier today at Biolapha’s headquarters in Bangi.
Under the five-year deal, Ritamix, which owns and formulates the NMN product, will distribute it in Malaysia and other Southeast Asian countries as well as mainland China and Hong Kong.
Hon said the partnership with Ritamix represents an important development for Bioalpha as the group maintains the growth momentum in expanding its customer and product base.
“We are grateful to have the trust from Ritamix to manufacture this NMN longevity supplement, backed by our solid track record of 15 years in the health supplement industry. We expect to receive the first batch of orders from Ritamix by the first quarter of 2021, which will be produced at our Good Manufacturing Practice-certified plant in Bangi,” Hon added.
Ritamix chairman and CEO Datuk Seri Howard Lee Haw Yih expects the sales projection for the NMN product in Malaysia alone to be HK$30 million to HK$35 million dollars (RM16 million to RM18 million) in 2021.
In Malaysia, the sales channel for the product will include pharmacy stores and fast-moving consumer goods stores.
In Hong Kong and the rest of China, Ritamix has already appointed agents to undertake the distribution and promotional activities. Meanwhile, it will also utilize cross-border e-commerce platforms to sell the products online in China.
Lee noted that this is Ritamix’s second collaboration with Bioalpha.
“The first product Bioalpha produced for us is an immune system booster to strengthen the body against viral infections such as Covid-19. The health supplement received great demand with pre-orders hitting HK$5 million, exceeding our initial target. We foresee the product to garner more interest post-launching with sales expected to reach HK$20 million in 2021.
“As for the NMN supplement, we believe that the reception will be even stronger due to its popularity,” Lee added.
Meanwhile, commenting on Bioalpha’s business outlook, Hon said they are expected to improve in the coming quarters backed by the RM2.1 billion contract previously signed with China-based Guizhou Yuhexin Trading Ltd and Hainan Shifengfu Co Ltd.
For the cumulative nine-month period ended Sept 30, 2020, the group posted a net loss of RM23.91 million against a net profit of RM6 million a year ago, as revenue fell 54.8% to RM19.79 million from RM43.79 million.
Bioalpha was the day’s most active counter on Bursa Malaysia, with volume of 487 million shares. It closed 4.5 sen or 12.68% lower at 31 sen, bringing it a market capitalisation of RM344.23 million.
Source: The Edge Markets