Malaysia’s Duopharma in stake sale talks with trade war-hit Chinese firms

Duopharma Biotech, Malaysia’s largest generic drugmaker, is in talks with two Chinese consumer healthcare companies for expansion of their production base in Southeast Asia and a potential stake sale, its managing director said.

During an interview with Reuters, Duopharma Managing Director Leonard Ariff bin Abdul Shatar declined to name the companies as the discussions were ongoing. However, he said both “reasonably big” companies were listed in China with an annual revenue of more than $1 billion each.

The Chinese companies, one based in Shanghai and the other in Beijing, had asked Kuala Lumpur’s Duopharma if it would be able to contract-manufacture for them. They have also discussed buying a stake in Duopharma, Leonard said.

“They have manufacturing bases currently in China, supplying to the United States. These are guys whom I would not have expected to see in this part of the world, but for the trade war,” he said.

Duopharma, which has a market valuation of about $220 million, was open to a stake sale of up to 10% in the company, Leonard said, adding that if a deal was finalised, the Malaysian firm will apply to register with the U.S. Food and Drug Administration.

“There is a famous Malay saying: when two elephants fight, the ants die. But what we see here is absolutely the opposite. This has come as a bit of a surprise,” he said.

Dented by higher U.S. tariffs, Chinese companies are seeking partners to partly shift their supply chain to Southeast Asian countries such as Vietnam, Malaysia and Indonesia, analysts and Malaysian government officials said.

In the first quarter of 2019, Southeast Asia’s third-biggest economy attracted foreign investment of more than $7 billion – a 73% surge from a year earlier. The Malaysian government and its trade agencies are sending their representatives to China and other countries, organizing seminars and signing agreements of cooperation.

Late last month, the China ambassador to Malaysia confirmed the high level of Chinese interest in its traditional trade partner.

“There’s a great wave of Chinese potential investors coming to Malaysia to do field studies,” Bai Tian said at a ceremony restarting a Belt-and-Road rail project in northern Malaysia, adding that he expected many deals to be signed.

Reuters

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.