One of China’s leading fishery firms has been ramping up distant water capacity, but is struggling to be profitable in some of its overseas subsidiaries.
Shanghai Kaichuang Marine International Co. Ltd lost CNY 9 million (USD 1.26 million, EUR 1.14 million) on Pantai Foods, its subsidiary in the Marshall Islands in the first half of 2019. The company’s built a base there to trade its catch to international buyers in Europe and North America.
Kaichuang returned profits of CNY 8.6 million (USD 1.20 million, EUR 1.09 million) in the first half of 2019 on revenues of CNY 1.05 billion (USD 147 million, EUR 133 million). The company, in a note to investors, blamed weaker prices for tuna in its export markets as well as higher expenditure on new vessels.
Processing remains a low margin business: profits of CNY 1.23 million (USD 172,600, EUR 156,300) on revenues of CNY 58.2 million (USD 8.1 million, EUR 7.3 million) represent a measly margin of 2 percent at Zhoushan Huan Tai Yang Food Processing Co, Kaichuang’s flagship processing concern.
In the face of softer global tuna prices, Kaichuang has identified Nigeria as a growth market for its mackerel catch. The company has this year added 16,749 tons of capacity to its trawler fleet which now totals 75,467 tons.
Photo courtesy of Kaichuang Marine International
