Food Revolution lands biggest fish yet as Sinopec considers its canola oil
Food & Agriculture
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Mini food exporter Food Revolution Group is running with the big dogs now after signing a distribution deal with the world’s biggest petrol company.
Sinopec, the Chinese petrochemical giant, is keen to sell the Australian company’s canola oil products in its 35,000 mainland petrol stations.
The deal is still at MoU stage. Which products, the volume, and what prices they’ll be sold for are still up in the air.
Even with so many details to hammer out, Food Revolution (ASX:FOD) believes it can have an agreement in place to start delivering by early 2019.
It’s also hoping canola oil will be a trojan horse to get more of its products into Sinopec stores.
FOD chairman Norman Li said a trip to an expo in China last week leads him to believe Sinopec will be just the first of many deals with giant Chinese corporations.
“A landmark deal such as this will put FOD on the map in China and position the company to generate further distribution deals with large Chinese companies,” he told investors.
Food Revolution is serious about a China exports strategy.
It sold half of the company to Sydney-based investor Dr Norman Li, his business Careline, and some unnamed strategic investors for $20.2 million.
That deal however is targeting sales via ‘daigous’ (which means to buy on behalf of), or people outside China who shop on behalf of a China resident.
Food Revolution shares opened 22 per cent higher at 14.7c before slipping back slightly.