Profitability took a heavy hit at China’s leading seafood firms in the first half of 2015, though the country’s leading aquafeed firm reported more optimistic figures.
China’s leading tilapia processor and exporter Baiyang Aquatic Group grew revenues year on year by 9.57 percent to CNY 720 million (USD 115.20, EUR 100.80 million), an increase of 9.57 percent year on year while the firm’s profit at CNY 8.47 million (USD 1.35, EUR 1.18 million) fell a massive 60.85 percent on the same period last year. Baiyang’s report on the first half of 2015 blamed weak international demand for frozen tilapia but also blamed insufficient capacity utilization in the first quarter, “… while depreciation and staff salaries and other fixed costs surged.”
China’s leading scallop exporter and largest listed seafood firm (by market capitalization), the Zhangzidao Group, meanwhile, reported revenues rose 4.37 percent in the first half of the year to CNY 1.3 billion (USD 208 million, EUR 182 million) while profit came in at CNY 2.1 million (USD 337, EUR 295 million): that’s down 267.95 percent compared to the CNY 52 million (USD 8.3 million, EUR 7.3 million) which Zhangzidao earned in the same period last year. Zhangzidao blamed company investments in e-commerce as well as currency fluctuations (a high Yuan impacting on exports) for the data.
China’s leading aquafeed player Guangdong Haid Group Co., meanwhile, has reported 2.6 million metric tons in sales for the first half of 2015, a year on year increase of 13.9 percent. Revenues for the period rose 8 percent to CNY 9.7 billion (USD 1.5 billion, EUR 1.3 billion) while profits rose a stunning 42 percent to CNY 288 million (USD 46 million, EUR 40.32 million). Gross profit margins, however, only rose 1.4 percentage points to 11.3 percent.
Haid predicted a “healthy outlook” for the rest of the year. The firm stands to do well from a rebound in China’s pork sector: the company has profited from the rise in demand for fishmeal for China’s ever-growing pig herd as well as for aquaculture.
China’s feed companies have benefitted from a global fall in corn and, earlier this year, lower soybean prices, while a rebound in Peruvian anchovy production has made life easier for firms reliant on imported raw materials – though China’s recent devaluation of the Yuan has erased some of those gains.
Originally a feed processor, Baiyang has sought to push into other areas of the value chain – such as tilapia processing – to get a bigger source of profit. Firms like Haid have sought to expand in antibiotics which offer higher margins (52 percent compared to the average 11.3 percent recorded for the overall business).
Guangdong Haid Group Co. produces and distributes aquatic feed and premix with brands including Hinter aquatic premix and concentrates along with Haid, Hailong, Dachuan, Haibei, Fengguang, and Rongchuan fish feeds and prawn feeds. Founded in 1998, the firm also sells the “Hailian” brand of antibiotics.
