Melbourne, Australia-based yellowtail kingfish producer Clean Seas Seafood has signed a distribution deal with a Chinese distributor.
The non-exclusive agreement Clean Seas signed with Hunchun Haiyun Trading Co. is the first of what the company expects will be several distribution deals it plans to sign in Asia over the next year, according to Clean Seas Managing Director and Chief Executive Officer David Head.
“This partnership represents a material step forward in executing our international growth strategy. Over the past 15 months, we have met with more than 20 potential strategic partners in Asia, including more than 12 in China, who have existing sales, marketing, and distribution capabilities with other premium seafood products,” Head said in a press release. “We expect to formalize a number of non-exclusive distribution partnership deals across these channels over the coming 12 months, and look forward to keeping investors updated on our progress.”
Hunchun Haiyun distributes live, fresh, and frozen products to premium restaurants and foodservice outlets across China, out of the Northeastern Chinese trading hub of Hunchunt.
“We are excited to secure a distribution partner of Hunchun Haiyun’s reputation and capability. In China, HH is one of the leading distributors of king crab, a premium seafood with strong channel synergies with our own products. We look forward to working closely with HH to extend our marketing and activation campaigns into China, generating demand for our products which we can supply through HH’s wholesale networks,” Head said. “[Hunchun Haiyun] has a proven premium seafood distribution capability with annual sales of king crab of approximately 6,000 tonnes. [We see] strong synergies between this sales channel and that of … hiramasa kingfish, and look forward to this partnership contributing to sales growth in FY19 and beyond.”
According to Simply Wall Street, Clean Seas Seafood Limited has a market capitalization of AUD 97 million (USD 71 million, EUR 62.3 million), and its revenue is up 18 percent over last year. In an October shareholder update, the company said its fresh sales had grown seven percent in the first quarter of the 2019 fiscal year, though its overall sales dropped to 562 metric tons, down from 596 metric tons in the same quarter of 2018.
In its release, Clean Seas said it is unable to forecast the potential revenue from the Hunchun Haiyun arrangement or its financial materiality.
“The Company, however, considers this to be a strategically important agreement offering an additional potential revenue stream and path to scale in a large, attractive premium seafood market,” it said.
In his comments on potential future deals in Asia, Head said the company has also conducted interviews with end-user customers and their suppliers including international hotel chains with multiple premium properties and restaurants across Asian markets.
“We are also in discussions with a number of leading food exporters in Australia with existing supply channels into premium Asian seafood markets,” Head said.
Photo courtesy of Clean Seas Seafood
