CONSUMERS tucking in to the Master Kong brand of instant noodles could one day be chowing down on healthier products with flavour profiles similar to existing ones.

This is a likely scenario, following the signing of an S$8 million memorandum of understanding (MOU) on Friday (Nov 24) between the investment arm of Chinese food and beverage (F&B) giant Ting Hsin International Group and Singapore startup Alchemy Foodtech.

Ting Hsin, which controls some 35 per cent of China’s instant F&B market, owns the Master Kong – also known as Kang Shi Fu – brand of instant noodles.

Under the deal, Ting Hsin will receive an undisclosed amount of equity in Alchemy, along with rights to invest in subsequent raises at preferential terms. In return, Alchemy will be able to tap the F&B giant’s manufacturing facilities in China, and source for raw materials from its new partner at discounted prices. Alchemy will also work with Ting Hsin’s subsidiaries, such as Master Kong and food manufacturer Wei Chuan Foods Corporation, to incorporate its offerings into their products.

Manufacturing in China, compared with the startup’s current production in Singapore, will allow for cost savings of up to 30 per cent, noted Alan Phua, co-founder and chief executive officer of Alchemy.

Founded in 2015, Alchemy produces dietary fibre and sugar-substitute powder mixes that lower the glycemic index (GI) of foods such as rice and baked goods.

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Low-GI foods spike a person’s blood sugar less – critical for diabetics or those with high blood sugar, who have to continuously manage their blood-sugar levels.

Locally, Alchemy’s plant-based products are found in offerings from F&B players such as Dian Xiao Er, Subway and Boon Tong Kee, and also on supermarket shelves. Yet, it is the international market that Alchemy is targeting, said Phua, due to Singapore’s comparatively smaller market.

Acting Minister for Transport Chee Hong Tat, who was guest of honour at Friday’s signing of the MOU, noted that overseas collaborations are an important way for Singapore’s startups to scale their operations. “Singapore is a good market – but small market – and if you restrict yourself only to Singapore, you won’t achieve economies of scale,” said Chee, who is also Senior Minister of State for Finance. Overseas collaborations also enable the export of innovative ideas from Singapore, strengthening the Republic’s position as a research and development hub, the minister added.

Michael Chen, director of Wei Chuan’s international business division, told The Business Times that there are products similar to Alchemy’s within China, but that the issue is that many of them alter the taste or texture of foods they are mixed into. This has been a key impediment to their adoption in existing F&B products, even as consumers are leaning towards healthier options.

“Diabetes has long been a problem in China,” he said. “There are many solutions in the market, but none of them taste as good as Alchemy’s. What we’re looking for is to find that balance – not only health-wise, but also taste-wise.”