April 24, 2012

China Marine completes new cold storage facility

China Marine Food Group Limited has finished the construction of its new 20,000-tonne cold storage complex located in the port of Shi Shi, China.

China Marine began construction of the new cold storage facility in September 2010. The new state-of-the-art facility is the only facility to be located directly in the port of Shi Shi, one of the largest fishing ports on the East Coast of China. The facility will be used to store raw materials used for the production of China Marine's Mingxiang(R)-branded seafood snacks and also as a dedicated warehousing facility for China Marine's marine-catch trading business. Additionally, the Company will lease out a portion of its cold storage to other marine catch distributors, avail blast-freezing services for high value catch, and sell ice to fishermen in the port. All of the facility's equipment has been installed and is undergoing extensive testing in preparation for cold storage, blast-freezing and ice demands in the summer months.

"We are pleased that one of our Shi-Shi enterprises and a US-listed public company will provide such an extremely valuable service to our fishing industry in Shi Shi," began the Mayor of Xiang Zhi town, Mr. Xiaoxin Hong. "For people familiar with commercial fishing, cold storage, blast freezing and ice are critical components of the industry and demand for such services remains high during all times of the fishing seasons. We were firm supporters of China Marine's plan for the port and anticipate they will benefit from an immediate impact from prospective customers."

The company, a China-based manufacturer of Mingxiang(R) seafood-based snack foods, "Hi-Power" marine algae-based beverages, and distributor of frozen marine catch, hosted several customers and local government officials on April 16 to commemorate the completion of this facility. The link below hosts two photos from the opening ceremony on China Marine's Website.

Pengfei Liu, CEO explained, "We have completed a major investment that will generate an attractive return to shareholders in long run. The new cold storage facility, the most advanced of its kind in Shi Shi city, will allow us to reduce our own storage costs, maintain better logistical control of our inventories and expand our marine catch business. Aside from the storage benefits to our own operations, the availability of blast freezing and chipped ice is a large and currently underserviced market in the port. Customers are expected to quickly line up for such services once the facility becomes fully operational in a very short period of time."

The total construction cost for the facility was approximately US$24.5 million. The Company expects to generate approximately US$8.0 million of revenues and US$4.0 million of net income from the new facility per annum.