Daesang Life Science said it signed a letter of intent (LOI) with Sinopharm International on Tuesday to establish a joint manufacturing and sales corporation for health foods in China’s Hainan Province.

Under the accord, Daesang and Sinopharm International will collaborate on the health industry based on China's national development strategy of "Healthy China 2030" and "Construction of Hainan Free Trade Port." This joint venture will build a production line for special medical, health, and general functional foods and cooperation in product R&D, production, management, and marketing.

Based on Daesang’s know-how in successful factory operation with health food brands, such as Nucare and Welllife, the joint venture will expand to the global market, starting with China, the Korean company said.

It added that the two companies would build a special medical and health functional food production plant in Hainan with global production infrastructure and competitiveness and promote the sale of products from Daesang through general trade partnerships.

With the recent and rapid increase of chronic diseases, such as cardiovascular diseases, diabetes, and cancer in China, the demand for special medical foods is increasing. As a result, continuous growth is expected as the Chinese government lowers the threshold for overseas companies to enter medical food products into the Chinese market, according to Daesang.

Daesang has the No. 1 brand of balanced nutrition for patients in Korea, including Mymil, and Wellife, trusted protein and health functional food brands. In addition, Daesang will support the joint venture's product research and development based on its 66-year-long history in food research know-how.

Sinopharm International will use its hospital and pharmacy network to strengthen the joint venture's distribution and sales of products.

“Daesang Life Science has proven its industry-leading manufacturing capabilities with HACCP and GMP certification of our Cheonan Plant 2,” Daesang Life Science CEO Suh Hoon-kyo said, "Based on this competitiveness, we will establish ourselves as a leader in the Chinese health food market."

Co-CEOs and officials of Daesang attended the ceremony through video, while CEOs and other officials of Sinopharm attended in person.