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Minnow Jiajia Food lands a big tuna fish
Posted on Thursday, 12 July 2018 10:34
Jiajia Food is reeling in a specialised tuna fishing company, which, with assets of CNY 4.70 billion (USD 704.45 million), is significantly larger than the seasoning manufacturer’s own CNY 2.80 billion-worth of assets. The soy sauce-to-vinegar producer and wholesaler is acquiring Dalian Ocean Fishing (DOF) for CNY 4.71 billion, comprising CNY 700.38 million in cash – raised via a capital increase – and in 792.41 million new shares. When contacted by Yicai Global for comment on the announcement, company secretary Peng Jie said Jiajia wants to expand its portfolio by breaking away from a unified product line-up to boost profits and business performance. Peng added the combined company will look to establish items derived from tuna, such as fish meal and oil. DOF is the largest ultra-low temperature longline premium player in China in terms of number of vessels, with a fleet of 31 ships working to catch the high-end members of the mackerel family. Founded in 2000 and headquartered in China’s Liaoning province, the group operates across the Pacific, the Atlantic and Indian Ocean, among others. DOF is actively trying to establish a presence in online and offline channels in China, such as in supermarkets, to boost prices and profit levels and has also launched its own canned tuna brand. The group generated net profit of CNY 343.88 million on revenue of CNY 758.69 million in the 12 months ended 31st December 2017, compared with CNY 332.62 million on CNY 639.17 million in FY 2016. In Q1 2018, it booked CNY 568.44 million at its top line and CNY 139.96 million at its bottom line. For the last two years, a subsidiary of Mitsubishi has accounted for more than 80.0 per cent of DOF’s sales, making the group the largest Chinese supplier to the Japanese high-end tuna market. Premium tuna or similar species, such as yellowfin or swordfish, respectively, realise better prices than the common-or-garden varieties. However, the downside to meeting demand for high-end fish is that the caught product must meet higher requirements for shape and size, for example. Japan is the largest consumer market for premium tuna and demand is relatively stable, with the price included in the consumer price index. © Zephus Ltd