TIDMCFC

RNS Number : 8630A

China Food Company PLC

05 April 2012

 
   Press Release     5 April 2012

China Food Company Plc

("China Food" the "Company" or the "Group")

Update on management team and loan agreements

China Food Company plc (AIM: CFC), a leading Chinese manufacturer of cooking and dipping sauces, provides the following update on its management team and loan agreements.

From 1 April 2012, Mr. Fu Guoping was appointed Chief Executive Officer of Fortune Food (China) Co., Ltd, the main China trading subsidiary responsible for launching "Xaka", the Group's premium grade soya sauce and the driver of the condiments division. Mr. Fu founded the China Food Group in 1994 and was instrumental in developing the both the feed and condiments business. He has a beneficial interest in 14,772,883 ordinary shares representing 18.51% of the ordinary share capital. These shares are held through Main World Investments Limited.

Following this appointment, RaphaelTham Wai Munwill continue as overall Group Chief Executive Officer and will focus on developing the Group's strategy to become a leading brand in north China condiments sector and completing the sale of the Company's Feed business which continues to progress.

The appointment of Mr. Fu coincides with the change of emphasis in the Company's strategy to focus on the end consumer and divesting of the commodity products of the animal feed.

In addition, the short-term shareholder loans totalling US$2 million previously announced on 3 October 2012 which are due for repayment on 31 March 2012 have been extended for a further three months, on the same terms and are expected to be repaid from the proceeds of the sale of the Group's feed business. As announced on 28 March, the Group's cash position remains strong with GBP6.58 million and net assets of approximately GBP39 million as at 31 December 2011.

John Mclean, Non-Executive Chairman of China Food, said: "The Board is delighted that Mr. Fu has agreed to take the Chief Executive Officer position of the Group's condiments business. His experience will enable China Food to capitalise on the significant opportunities in this particular market whilst leaving Raphael to concentrate his efforts on the overall strategic direction of the Group and to negotiate a successful sale of the feed business."

- Ends -

For further information:

 
 China Food Company Plc 
 John McLean, Non-Executive Chairman        Tel: +44 (0) 7768 031 
                                                              454 
 Raphael Tham Wai Mun, Chief Executive 
                                         www.chinafoodcompany.com 
 Numis 
 David Poutney - Head of Corporate           Tel: +44 (0) 20 7260 
  Broking                                                    1000 
 
  finnCap (Nomad) 
 Geoff Nash / Ben Thompson (Corporate        Tel: +44 (0) 20 7220 
  Finance)                                                   0500 
 Simon Starr (Broking)

Media enquiries:

 
 Abchurch Communications 
 Henry Harrison-Topham / Oliver Baxendale     Tel: +44 (0) 20 7398 
                                                              7720 
 oliver.baxendale@abchurch-group.com        www.abchurch-group.com

Notes to Editors:

China Food is a well-established food manufacturing business based in Shandong province in the People's Republic of China, a region with a population of circa 94 million. A recent report identified Shandong province as one of the five most attractive 'city clusters' in China, due to the high number of large cities in the province*. The Group manufactures numerous different product lines including soya sauce and bean paste, all targeting the Chinese domestic market, and sold through a network of distributors and outlets of supermarket chains in the north-eastern region of the PRC, such as Tesco, Walmart, Carrefour and Jialejia.

The Chinese sauces, dressings and condiments market is expected to be worth CNY115 billion (US$15 billion) by 2013**, driven by Chinese population growth and economic prosperity. The Chinese domestic market is rapidly expanding, and the Group is well positioned to benefit from China's demographic growth and increased urbanisation.

The first phase of expansion is now complete at the Group's new factory, which was officially opened on 12 May 2010, and this doubles China Food's current capacity. It is proposed that in due course there will be a further two phases, adding capacity of 100,000 tonnes through the building of 230 additional silos. The Group plans to expand into the neighbouring provinces such as Henan and Hebei.

The Group also operates an animal feed business, Fuss Feed. This business produces premix, concentrate and compound feedstuffs, and is the third largest animal feed business in Shandong, an important province for the production of livestock in China.

The Group's operations are highly scalable and able to support further growth, and with net assets of GBP39 million (as at 31 December 2011), the prospects for China Food are strong. Further information on China Food Company can be found at www.chinafoodcompany.com.

*McKinsey Quarterly Report: Is your emerging market strategy local enough?, April 2011

** Source: Datamonitor report: Sauces, Dressings and Condiments in China to 2013, April 2010

This information is provided by RNS

The company news service from the London Stock Exchange

END

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