China Marine Food Group Commences Production at New Facility in Shi Shi Factory
Company begins phase 2 expansion project - will double capacity to 20,000 tons by Q3 2009 to facilitate future growth.
08/01/09 China Marine Food Group Ltd., a producer of seafood-based snack foods and fresh and frozen marine catch, 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.
