May 11, 2010 09:24

Singapore Exchange Mainboard-listed industrial fishing company China Fishery Group Limited ("China Fishery" or the "Company") (SGX: B0Z.SI) announced that it has increased its Peruvian Anchovy fishing quota of annual total allowable catch from 4.85% and 7.11% in the North and South of Peru to 5.08% and 7.87% respectively through the acquisition of the entire share capital of Deep Sea Fishing S.A.C1, a Peruvian fishing company with approximately 0.23% quota in the North of Peru and 0.76% quota in the South of Peru, reports with reference to China Fishery Group.

The total consideration for the acquisition is US$18.0 million, which will be funded from internal resources.

Commenting on the acquisition, Group Managing Director Mr. Ng Joo Siang said, "With a higher percentage of quota entitlement, the Group will be able to increase its Peruvian Anchovy harvest volumes. This is in line with our strategy in Peru to seek acquisition opportunities which will allow the Group to increase its access to Peruvian Anchovy - the world's largest wild catch species."

Currently, Peruvian Anchovy is predominantly used for fishmeal and fish oil production. With the rising demand for fish as a source of protein, the worldwide aquaculture industry has grown significantly in recent years. Demand for fishmeal, a vital component of aquaculture and animal-farming feeds, has increased correspondingly, particularly in China, the world's largest aquaculture producing country. However, global supply of fishmeal has only remained steady over the past few years. Driven by a growing demand but limited supply, the price of fishmeal has increased significantly from approximately US$900 per MT in the third quarter of 2009 to over US$1,900 MT currently.

"We believe that global demand for fishmeal will continue to increase over the long-term in view of the increasing demand for aquaculture and animal-farming due to population growth and rising popularity of fish as a healthy source of protein. This acquisition will enable us to benefit further from this favourable market trend. Looking ahead, we will continue to seize acquisition opportunities in Peru as well as in the rest of the world which are synergistic with our goal of becoming a significant supplier of fish products to the growing China market and a leading consolidator in the global fishing industry." said Mr. Ng.

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