TIDMAFG

RNS Number : 3146A

Aquatic Foods Group PLC

28 September 2015

 
 Press Release   28 September 2015

Aquatic Foods Group Plc

("Aquatic Foods" or the "Group" or the "Company")

USD 15.4 million US export contract secured

Aquatic Foods Group Plc (AIM: AFG), a leading Chinese marine foods and seafood processor and producer, supplying to export and local markets, is pleased to announce that it has signed a significant one year sales contract with Yihe International Corporation ("Yihe"), a leading seafood wholesaler and high volume processor, supplying premium seafood products to the United States ("US"). The contract is expected to benefit the fourth quarter of the current financial year as well as 2016 with the subsequent prospect of repeat business.

The contract, which represents a total value of USD 15.4 million (approximately RMB 99 million: GBP10.1 million) is to supply Yihe with 11 separate seafood products over the course of one year. This new major contract marks a considerable increase in trade undertaken between Yihe and the Group, which in previous years averaged at approximately RMB 6.2 million per annum. Yihe is the largest importer of salmon products into the United States with its seafood product being sold into 24 different retailers throughout the US, including a number of major US supermarkets such as Walmart and Fareway.

The products will be sold to Yihe under Yihe's own brands. Exports accounted for 9% of Group sales in 2014, with the US accounting for 2 per cent of the Group's international sales in 2014, Aquatic Foods plans to increase its international product and brand awareness while growing export sales, as outlined in the Group's Admission Document. The agreement with Yihe not only immediately increases export sales, but also places Aquatic Foods in a strong positon for future expansion into the United States.

The Board of Aquatic Foods believe that the US seafood market has high growth potential and the agreement with Yihe marks an exciting phase within the Group's development. Over three quarters of the seafood products consumed in the United States are imported from other countries around the world, and in 2013, it showed the potential of the US market as consumer awareness grows of the health benefits associated with seafood products(1) .

(1) Seafood Choices: The U.S. Seafood Supply: http://seafoodhealthfacts.org/seafood_choices/overview.php).

The Group will be supplying Yihe with one of its market leading brands, Ocean Eclipse as well as Alaskan Jack's, which uses a range of different flavoured marinated salmon filets. As part of the contract, the Group has agreed to maintain its usual high standards of adhering to strict quality and inspection controls. Aquatic Foods considers its adherence to these standards to be a key strength, which has helped the Group build a strong track record of supplying its products to overseas markets. This key strength is proven through the Company passing Walmart's stringent food safety standards, which was a pre-condition of Yihe choosing Aquatic Foods' to supply products to the US.

Li Xianzhi, Chief Executive Officer of Aquatic Foods Group Plc, said: "The Board is pleased to sign this significant contract with Yihe. Whilst Aquatic Foods has experienced high growth within the local PRC market in recent years, the export market remains an important source of revenue for the Group. As a leading PRC marine foods and seafood processor, Aquatic Foods' adherence to internationally recognised high standards of quality, safety and sustainability provides confidence to both local PRC and overseas suppliers alike. We very much look forward to working with Yihe over the next year and delivering our high quality seafood products under their brands.

"The Group remains committed in growing export sales, leveraging on our already established position in the market, while still investing in building the Group's own brands in the PRC. The Board is confident that additional sales enquiries from overseas will follow, particularly following our successful listing on AIM, which strongly enhances the international corporate profile of Aquatic Foods Group."

- Ends -

For further information:

 
 Aquatic Foods Group Plc 
 Sean Lim, Finance Director   Tel: +44 (0) 20 7398 7714 
                                  www.aquatic-foods.com 
 
 
 SP Angel Corporate Finance LLP 
  Nominated Adviser and Broker 
 Stuart Gledhill / David Facey    Tel: +44 (0) 20 3470 0470 
                                          www.spangel.co.uk

Media enquiries:

 
 Abchurch Communications Limited 
 Jamie Hooper / Canace Wong        Tel: +44 (0) 20 7398 7714 
 AquaticFoods@abchurch-group.com      www.abchurch-group.com

Notes to Editors:

Aquatic Foods Group is a leading marine foods and seafood processor and supplier based in China. The Group initially built its business through focusing on the export market (principally Japan under the "Kanwa Foods" brand), and subsequently established the "Zhenhaitang" brand in 2007 in mainland China to take advantage of the growing market driven by growing disposable income within the Chinese middle-classes and a more health conscious consumer base.

The Group benefits from excellent food safety procedures developed over many years which have helped the Group to build a strong track record of supplying its products into overseas markets. This track record has enhanced the perception of the quality and reliability of the Group's products in China and has allowed the Group to expand significantly into local markets as demand for seafood products has increased. In a market that has seen regular public health scares relating to food safety, the Group considers that its adherence to these standards to be a key strength. The Group has obtained the following key standards:

   -      ISO 9001 Quality Management System certification 
   -      HACCP Food Safety System certification 
   -      BRC certification; and 
   -      Marine Stewardship Council certification

Aquatic Foods works with a network of distributors to effectively market its products in China. The Group has continued to grow its distributor relationships and now distributes its products in 16 provinces, municipalities and autonomous regions in China through 50 regional distributors. These distributors in turn sell the Group's products to sub-distributors and retailers, including supermarket chains and hypermarkets.

Further information can be viewed at www.aquatic-foods.com.

This information is provided by RNS

The company news service from the London Stock Exchange

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