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PRESS RELEASE: Haikui Seafood signs land use agreement for new production facility

DGAP-News: Haikui Seafood AG / Key word(s): Contract Haikui Seafood signs land use agreement for new production facility

13.01.2014 / 08:31

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Haikui Seafood signs land use agreement for new production facility

Frankfurt am Main, January 13, 2014. The Chinese subsidiary of Haikui Seafood AG has successfully signed an agreement regarding the acquisition of land use rights with the local authorities in Dongshan, paving the way for the construction of its new production site. The acquired land is located in the Dongshan Marine Biotechnology Industrial Park, Dongshan Island, Fujian Province, and has a total size of 1,000 mu (approximately 667,000 square metres). Total land costs amount to 110.0 million Renminbi (around 13.2 million Euros), of which Haikui Seafood has paid 70 per cent (77.0 million Renminbi or 9.2 million Euros) upon signing of the land use agreement. The remaining 30 per cent (33.0 million Renminbi or 4.0 million Euros) are due by the end of June 2014.

'The construction of the new processing facility in Dongshan is an important step in our mid- to long-term strategy. With the new facility we intend to double our existing processing capacity. Through greater efficiency and higher productivity, the new factory is expected to improve our competitiveness and our margins. The new factory will also enable us to conduct the business of extracting compounds from marine processing by-products, which would also boost our overall profitability', says Chen Zhenkui, CEO of Haikui Seafood.

After the initial site preparation, the company intends to start Phase 1 of the site construction around April 2014, so that it could go into operation by the end of 2015.

The estimated total investment amount for the new seafood-processing factory is approximately 550.0 million Renminbi (approximately 66.0 million Euros). Recently, Haikui Seafood secured a long-term loan from the German development finance institution DEG (Deutsche Investitions- und Entwicklungsgesellschaft), a subsidiary of KfW (Kreditanstalt fr Wiederaufbau), amounting to 25 million US dollar, which will contribute to the financing of the new factory. As a precondition for the granting of the loan, DEG performed an extensive audit on economic, environmental and social aspects of Haikui Seafood's operations. Apart from aligning Haikui Seafood's financing structure with its asset structure, the loan offers attractive financing costs: The annual interest rate is the applicable 6-month US dollar LIBOR plus 4 per cent - currently adding up to 4.34 per cent. The loan has a maturity of seven years. According to the loan repayment schedule, the first of ten equal semi-annual instalment repayments is due on March 15, 2016.

About Haikui Seafood AG

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PRESS RELEASE: Haikui Seafood signs land use agreement for new production facility