One of China’s leading listed seafood companies, CNFC Overseas Fishery Co., is projecting a modest profit for 2016 after getting an injection of funds from its parent firm, a government entity.
Headquartered in Beijing, the listed arm of China National Fishery Corp. is projecting a profit of between CNY 25 and CNY 34 million (USD 3.6 and 5 million, EUR 3.4 and 4.6 million) for 2016, a figure which would reverse a CNY 266.7 million (USD 38.8 million, EUR 36.3 million) loss for 2015.
While the listed company in its statement to the stock regulator points to increased activity in seafood trading for its outlook, the projection is based on a CNY 74.3 billion (USD 10.8 million, EUR 10.1 million) subvention from the China National Agricultural Development Group Corporation (CNADC), the government-run holding company that controls CNFC.
While its branded imported seafood packaged products have become a more frequent sight in major Beijing supermarkets, CNFC earlier this year announced a projected loss of CNY 17 million (USD 2.5 million, EUR 2.3 million) for the first half of the year, compared to a net income of CNY 19.7 million (USD 2.9 million, EUR 2.7 million) recorded for the same period last year.
Originally set up to catch and export seafood, China’s state-owned fishing firms like CNFC have long enjoyed privileged access to loading bays with many reportedly enjoying duty free unloading at Chinese ports. But these firms have also struggled to keep pace with the development of a brand-driven domestic market and surging online sales and marketing.
Another long-term challenge for CNFC is having to compete with other large state entities like sister company China State Farms Agribusiness (Group) Corporation – also a subsidiary of China National Agricultural Development Group Corporation (CNADC) which answers to the central government. Other competitors include state-run China Poly Group Corporation, a firm originally founded by the Chinese military, which trades arms and has built a fish processing factory in Mauritania, partly in return for access to the nation’s waters.
