Guangdong Yuehai Feeds Group Co. is planning to invest significantly in a plant to process ready-made seafood snacks and meals, and Zhanjiang Guolian Aquatic Products has announced it will exit the aquaculture sector.
A representative of the Zhanjiang, Guangdong, China-based Yuehai Feeds, previously an aquafeed specialist, told Guangdong provincial television it will invest CNY 260 million (USD 38.2 million, EUR 36.6 million) in a new plant through its subsidiary, Zhanjiang Yuehai Aquatic Products Co.
Venture capital firm KKR and Co. invested USD 100 million (EUR 96 million) in Yuehai in 2015, citing its belief the firm’s technology capacities and a growth in demand for innovative aquafeed would bring it increased profits. However, the China aquafeed space has become more competitive and the company’s profitability has been squeezed by rising input costs, including soaring fuel prices.
Guolian Aquatic, which has recently invested heavily in its convenience foods business, announced on 11 May it will exit the aquaculture industry and focus on value-added processing and marketing. Guolian has long had shrimp- and tilapia-farming operations, but its aquaculture arm lost CNY 50 million (USD 7.35 million, EUR 7.05 million) in 2021 and had been loss-making for some time, the company said in its 2021 annual report. Moving forward, Guolian will source seafood from suppliers in China.
As recently as 2016, Guolian relied on exports for 70 percent of its revenue, but it revamped its approach to new product development, marketing, and online sales channels, emphasizing China's domestic market. It signed key supply deals with fast-food firms, guaranteeing solid revenue streams on relatively high-margin value-added product.
In 2021, Guolian invested heavily in new facilities to supply catering companies and retailers with pre-cooked and convenience seafood products. Customers include leading hot-pot chain Haidilao, fast food chains Xia Bu Xia Bu and Si Nian, and Hooters, Hard Rock, Denny’s, and Applebees.
Photo courtesy of Guangdong Yuehai Feeds Group Co.
