Clean Seas strikes deal to sell its ‘king of kingfish’ to China
Health & Biotech
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Fish farmer Clean Seas Seafood will sell its “exceptionally high quality” yellowtail kingfish to China following a distribution agreement with one of China’s premium seafood distributors.
Clean Seas (ASX:CSS) is Australia’s only commercial farmer of yellowtail kingfish, also known as hiramasa kingfish. It sold 2,640 tonnes of fish in the 2018 financial year.
It told investors this morning it had signed a deal with Hunchun Haiyun (HH). Based in northeastern China, HH distributes live, fresh and frozen products to premium restaurants and food service outlets across China.
It also sells 6000 tonnes of king crab which Clean Seas reckons is a good fit. Clean Seas sees “strong synergies” between HH’s sales channels and its hiramasa kingfish, which is farmed in Spencer Gulf in South Australia.
“We are excited to secure a distribution partner of Hunchun Haiyun’s reputation and capability,” Clean Seas chief David Head said.
“We look forward to working closely with HH to extend our marketing and activation campaigns into China, generating demand for our products which we can supply through HH’s wholesale networks.
“This partnership represents a material step forward in executing our international growth strategy.
“Over the past 15 months, we have 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.”
The company said it could not forecast revenue from the deal, but that considered it to be a “strategically important agreement offering an additional potential revenue stream and path to scale in a large, attractive premium seafood market”.
Clean Seas enjoyed a bumper 2018 financial year, boosting its full-year profit from $202,000 to $3.4 million, a 1,573 per cent increase.
It has been rebuilding after it endured a challenging 2016 when its fish death rates hit 82 per cent thanks to a lack of taurine — the same amino acid found in energy drinks — in the fish feed.
Clean Seas is in a legal battle over the affair. In its 2018 annual report, the company said litigation was progressing, with mediation expected in December and a trial next year if it cannot be settled.