Company Begins Phase 2 Expansion Project - Will Double Capacity to 20,000 tons by Q3 2009 to Facilitate Future Growth
SHISHI, China, Jan. 7 /PRNewswire-Asia-FirstCall/ -- China Marine Food Group Ltd. (OTC Bulletin Board: CMFO), a producer of seafood-based snack foods and fresh and frozen marine catch, today announced that the Company formally inaugurated and has commenced operations of its new production facility located at the Company's Shi Shi processing and distribution plant.
During 2008, China Marine concluded the purchase, installation, set-up and testing of several pieces of equipment utilized for seafood processing, drying, and packaging as part of the Company's commitment to increase production capacity by 50% for calendar 2009. The Company also upgraded certain legacy processing machines to further maximize efficiency. Prior to this "Phase 1" capacity expansion, the Company maintained production lines capable of processing a maximum of 6,600 tons yearly which were operating at approximately 90% utilization rates. The new production facility will afford the Company with the ability to process up to 10,000 tons when operating at full capacity.
Pengfei Liu, Chairman and Chief Executive Officer, stated, "We are pleased to complete this phase of development and meet a commitment to our distributors, end consumers and shareholders, who have collectively supported our expansion efforts to increase production and sales of our seafood-based snack food products. We have begun to penetrate new geographic areas while gaining market share in our core provinces and this new production facility will meet our growing customer demand. We are equally eager to complete our 'Phase 2' expansion which will position China Marine to capitalize on growth opportunities for 2010 and beyond."
China Marine has initiated its "Phase 2" expansion at its current Shi Shi plant which is anticipated to double its current capacity to 20,000 tons annually and is expected to be online during the third quarter of this year. The total anticipated capital expenditures for this new facility expansion, including all necessary equipment, are expected to be less than $5 million. This is significantly less than previously disclosed plans, which included the purchase of land use rights and the erection of an entirely new production plant and cold storage facility, and is expected to greatly enhance the Company's return on its investment.
Both phases of the capacity expansion will be fully funded by operations and the Company's initial raise of $19.9 million in a private placement offering in November of 2007. For the first nine months of 2008, China Marine recorded $35 million in revenues and $8.6 million in net income against an investor "make good" net income target of $10.5 million for the 2008 calendar year.
About China Marine
China Marine Food Group Ltd. processes and distributes processed seafood snack-type products, and fresh and frozen marine catch to six provinces in the PRC and select international markets. Founded in 1994, China Marine has grown steadily and positioned its "Mingxiang" brand as a category leader in 1,400 retail sales points in the PRC. The Company has received "The Famous Brand" and "Green Food" awards. It is located in Fujian Province, one of the largest coastal provinces in the PRC and a vital navigation hub between the East China Sea and the South China Sea. The Company is committed to the highest standard of quality control with the ISO9001, ISO14001, HACCP certification and the EU export registration.
FORWARD-LOOKING STATEMENTS
This release contains certain "forward-looking statements" relating to the business of China Marine Food Group Limited and its subsidiary companies, which can be identified by the use of forward-looking terminology such as "believes, expects" or similar expressions. Such forward-looking statements involve known and unknown risks and uncertainties, including all business uncertainties relating to product development, marketing, concentration in a single customer, raw material costs, market acceptance, future capital requirements, competition in general and other factors that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. Certain of these risks and uncertainties are or will be described in greater detail in our filings with the Securities and Exchange Commission. China Marine Food Group Limited is under no obligation to (and expressly disclaims any such obligation to) update or alter its
forward-looking statements whether as a result of new information, future events or otherwise. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.
For more information, please contact:
Company Contact:
Marco Hon Wai KU, CFO
Suite 815, 8th Floor
Ocean Centre, Harbour City
Kowloon, HONG KONG
Tel: +852-2111-8768
Email: marco.ku@china-marine.cn
Web: http://www.china-marine.cn
Investor Relations Contact
John Mattio, SVP
HC International, Inc.
Tel: +1-914-669-5340 (U.S.)
Email: john.mattio@hcinternational.net
Web: http://www.hcinternational.net
