Yihe Corp., armed with new financial and supply chain partners, is primed for the wild salmon bidding season this summer and has put its financial woes in the past, according to Steven Chen, CEO of the Pasadena, Calif.-based company.
“We’re much stronger than before,” Chen told SeafoodSource this week during a conference call that included the company’s new business partners.
Founded in 2004, Yihe Corp. made a big splash onto the international seafood supply scene during the spring of 2013 when a company executive based in the United States reported to the trade media that the importer, processor and private-label packer had reached USD 500 million in sales in 2012. That earned them a strong debut on the 2013 Top 25 North American Seafood Suppliers list in SeaFood Business magazine, landing in the No. 10 spot.
Yihe still claims to be one of the biggest U.S. salmon importers, procuring product in Alaska that is shipped to its processing facilities in Qingdao and Behai, China, for re-export.
However, the company experienced severe cash flow issues last year at the time it needed to procure raw materials for 2014, said Ed Cuccio, CEO of Resource One in St. Louis, the company whose claims put Yihe in receivership last fall. Yihe and Resource One are now supply chain and retail-service partners.
The cash flow problems were a “direct result of Chinese banks tightening and changing their credit terms. It affected a whole array of different businesses internationally,” said Cuccio.
Sales were indeed lost as a result of the tight credit market and receivership process, but Michael Klein, VP-sales for Resource One, said Yihe was able to satisfy “a majority” of its customers’ orders. And every creditor was paid in full, including Resource One, which has been working with Yihe since 2008. “Nobody was left hanging,” said Cuccio.
Chen, Cuccio and Klein declined to divulge any further financial information. The former executive VP of U.S. operations, Dennis Morgan, is no longer with the company. As Cuccio explained, the entire “middle tier” of the company, including the Seattle office, was shut down.
Since then, Yihe partnered with financial backer Junbin Yang, chairman of Fuhuang Group in Chaohu City, Anhui Province, China. The capital infusion and subsequent partnership will ensure long-term raw material acquisition capabilities and potential forays into catfish and crawfish sales.
“The assurance that we had to come forward with to the industry was that we are financially sound,” said Klein. “And bringing the new financial partner to bear with Steven Chen has reduced our reliability or our need for support from the banks and will prevent us from being in a position where they can control the future of our company when we need it most.”
“One of the biggest differences now is that we have private financing,” added Cuccio, who had just returned from China for a visit with Junbin Yang, whose Fuhuang Group manufactures steel structures, among a variety of other businesses. “It’s reduced our [dependence] on support from the banks.”
Cuccio said the “textbook” and “orderly” receivership process was done to save the company and ensure that Yihe could make shipments from November through Lent, the company’s prime sales period.
Yihe Corp.’s primary business is processing and importing salmon for its own branded product lines (Ocean Eclipse and Ocean Select) and various private labels. Yihe packs frozen seafood for the “largest players in the industry,” said Klein, without identifying any in particular, citing policy. About half of the company’s sales are in the U.S. market, but it also markets to Europe, China, Mexico and Canada.