CHINA FISHERY’S BECOMES THE SIXTH LARGEST FISHMEAL COMPANY IN PERU THROUGH ACQUISITION

May 18, 2010 09:24

Acquisition further increases fishing quota to

6.05% in North of Peru and 10.91% in South of Peru

Singapore Exchange Mainboard-listed industrial fishing company China Fishery Group Limited ("China Fishery" or the "Company") (SGX: B0Z.SI) announced that it has become the sixth largest fishmeal company in Peru following the acquisition of the entire share capital of a Peruvian fishing company - Pesquera Alejandria S.A.C.1 ("Alejandria"), for the total consideration of US$95.0 million, reports www.megafishnet.com with reference to China Fishery Group.

Alejandria owns a steam-dried fishmeal processing plant in Peru with a processing capacity of 40 metric tonnes of raw fish per hour, together with approximately 0.97% quota share in the North of Peru and 3.04% quota share in the South of Peru. With this acquisition, the Group's share of the annual allowable catch of Peruvian Anchovy has reached 6.05% in North of Peru and 10.91% in South of Peru.

Commenting on the acquisition, Group Managing Director Mr. Ng Joo Siang said, "China Fishery continues to execute upon our strategy of being a leading consolidator in the global fishing industry. With this acquisition, the Group will not only further increase our market share in the Peruvian fishing industry, being now the sixth largest fishmeal company in Peru, we will be able to increase the production volume of fishmeal. In addition, we can further enhance the economies of scale and achieve higher operating efficiencies of our operations in Peru."

The average market price of fishmeal is on a rising trend. This is due to increasing demand from the aquaculture and animal-farming industries, particularly in China. With only a relatively limited supply in the market, fishmeal pricing is expected to remain strong over the long-term. The average market price of fishmeal has risen from approximately US$900 per metric tonnes in the third quarter of 2009 to over US$1,900 per metric tonnes currently.

"Peruvian Anchovy is an under-utilised fish species that is presently used mainly for fishmeal and fish oil production. As the world's population continues to grow and fish continues to enjoy rising popularity as a healthy source of protein, we believe that the value of under-utilised fish species such as the Peruvian Anchovy will increase in time. This acquisition is in line with the Group's strategy of seizing opportunities worldwide that will enable China Fishery to gain access to under-utilised yet abundant fish species and to achieve our dual aim of being a significant supplier of fish products to the fast-growing China market, and a leading consolidator in the global fishing industry." Mr. Ng concludes.

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