Chinese feed company to raise CNY 560m for ‘eel breeding base’

Chinese feed company Fujian Tianma Science and Technology intends to raise CNY 560 million ($83m) through a private share placement to fund the construction of an “ecological eel breeding base” in the country’s southeast.

Fujian Tianma, which is listed on the Shahgia stock exchange, is raising the funds to develop four seaprate eel projects across Fuqing and Yongding counties in Fujian province, China’s largest eel production region.

The project comes as China’s demand for eel products increases amid a proliferation of Japanese style restaurants. Grilled eel is a popular dish in Japanese cuisine.

Phase one of the plan is for a CNY 263m “breeding base”, built across Fuqing and Yongding. This comprises two breeding centers, a food processing facility, and an “eel farm village”. An additional CNY 160m will serve as “supplementary liquidity”.

According to statistics from the Ministry of Agriculture, Forestry and Fisheries of Japan, from 2013 to 2017, the number of Japanese restaurants in China increased from 10,583 to 40,823, representing a compound growth rate of 40%, it noted. “In recent years, the development of Japanese cuisine in the country has rapidly promoted the increase in domestic demand for eel,” said the firm.

It said the project would also improve water efficiency and reduce discharge from aquaculture.

“The traditional intensive culture model in cement ponds is under increasing regulatory pressure, and some rural areas have banned this culture model,” it said.

The firm said if the actual net proceeds raised in this issuance are lower than the planned investment, it would adjust the scope of the project accordingly.

Established in 2005, Fujian Tianma is China’s largest supplier of aquatic feed for farmed eel, according to the firm. Last year, it expanded further into downstream processing with the acquisition of a local eel processor, Jiangxi Xilong Food.

It also expanded into feed production for pig and poultry with the acquisition of Hualong Group Feed.

In 2019, Fujian Tianma reported total group revenues of CNY 2.43 billion and net profits of CNY 56.9m, according to its annual report. Seafood sales came to CNY 311m.

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