Seafood producer Clean Seas has today inked a distribution agreement with China’s leading distributor of live, fresh and frozen products, ‘Hunchun Haiyun Trading Co Ltd.’
Founded in 2014, Hunchun Haiyun is based in Northeastern Chinese trading hub of Hunchun. The company is positioned as a leading Chinese premium seafood distributor that distributes King Crab and other live and frozen food to premium restaurants and food service outlets across China, employing more than 260 people.
With the proven premium seafood distribution capability, HH sells approximately 6,000 tonnes of King Crab annually. Therefore, Clean Seas has joined hands with Hunchun Haiyun to get benefitted by the strong synergies between HH’s sales channel and Spencer Gulf Hiramasa Kingfish. The company expects to witness a significant sales growth in FY19 and beyond on the back of this new distribution partnership.
Clean Seas Managing Director and Chief Executive Officer, David Head stated that the company look forward to working closely with HH to extend its marketing and activation campaigns into China, generating demand for the company’s products which can be suppled through HH’s wholesale networks.
He added “This partnership represents a material step forward in executing the Clean Seas international growth strategy. Over the past 15 months, the company has met with more than 20 potential strategic partners in Asia, including more than 12 in China, who have existing sales, marketing and distribution capabilities with other premium seafood products.”
But it has been informed that Clean Seas is currently unable to forecast the potential revenue or the financial materiality from this non-executive arrangement. The Company however considers this to be a strategically important agreement offering an additional potential revenue stream and path to scale in a large, attractive premium seafood market.
Mr. Head further confirmed that the company is also meeting with end user customers and their suppliers including international hotel chains with multiple premium properties and restaurants across Asian markets. He told Clean Seas is also in discussions with a number of leading food exporters in Australia with existing supply channels into premium Asian seafood markets. Further going forward, the company expects to formalize a number of non-exclusive distribution partnership deals over the coming 12 months.
With this news, Clean Seas’ share price edged up by 1.754% to close at $0.058 on 13 November 2018, while its PE multiple was 25.910 x with market capitalization of $95.04 million. But, the stock of Clean Seas Seafood Limited (ASX: CSS) has witnessed a negative performance change of 8.06% over the past one year.
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