KUALA LUMPUR: SG Global Biotech Sdn Bhd, the pharmaceutical manufacturing arm of Hai-O Enterprise Bhd, is targeting for the division to contribute 5% to group revenue within three to five years, thanks to a manufacturing contract from PureCircle (M) Sdn Bhd.
The five-year contract was valued at RM30mil, chairman Tan Sri Osman S. Cassim said after the signing of the manufacturing agreement with PureCircle yesterday.
For the first half ended Oct 31, SG Global Biotech contributed only 2% to the group's topline and 1% to its bottomline.
Under the contract, SG Global Biotech will manufacture a natural sweetener under the brand name, Greenlite.
Greenlite is a low calorie sweetener made from a plant, stevia rebaudina, or stevia, which is currently being marketed to the Middle East, Russia, the United States, Canada and South-East Asia.
In the first three years, SG Global Biotech would have the capacity to produce 85 tonnes of Greenlite a year, which it intends to increase to 150 tonnes, director Chua Chun Siang said.
At present, it has an annual production capacity of 150 to 200 tonnes for its product range.
SG Global Biotech is involved in the production, processing and packaging of herbal natural medicines, food supplements and health products.
PureCircle Ltd, the parent company of PureCircle, is listed on London's Alternative Investment Market. It is the world's largest producer of natural high-density sweetener from stevia plants.
Its clientele in Malaysia includes major food and beverage multinational companies including Cargill Malaysia Sdn Bhd.
According to PureCircle director of business development Aslan Tomov, plans are in the pipeline to appoint SG Global Biotech as its distributor in Malaysia and China.
Last year, PureCircle Ltd registered turnover of US$25bil, with its major markets in Europe and US.
SG Global Biotech is currently involved in the research and development of stevia with the Malaysian Agricultural Research and Development Institute.
Hai-O Enterprise registered turnover of RM190mil for the year ended April 30, 2007.
Earlier, Deputy Finance Minister Datuk Dr Ng Yen Yen cited figures from a US National Marketing Institute 2006 report that the American health and wellness industry achieved turnover of US$91bil.
According to the report, functional and fortified food and beverages (F&B) achieved 18% growth while organic F&B and natural and organic personal care achieved growth of 19% and 24% respectively.
Ng said the “phenomenal” growth rates pointed to the huge potential of the wellness industry in US, including Asia Pacific and other emerging economies.