China Marine Food Group Limited (NYSE Amex: CMFO), a China-based manufacturer of Mingxiang® seafood-based snack foods, "Hi-Power" marine algae-based beverages, and distributor of frozen marine catch, today provided an update on its two business segments.
China Marine continues to experience solid growth in its Hi-Power algae-based beverages. Increased marketing activities have resulted in growing brand recognition and repeat orders in Fujian province. To increase geographic penetration, the Company has also expanded into the Zhejiang province through a distributor who services the Wenzhou area. The initial focus has been on stocking restaurants and canteens, with approximately 600 points of sales established to date. The Company has launched various marketing initiatives to build brand awareness and anticipates signing additional distributors in the near term. Management has been encouraged by consumer feedback and sell through has been robust.
Sales of the Company's seafood products have been adversely affected by consumers' perception of safety in relation to the nuclear disaster in Japan. Softness in sales that began in late March has persisted through the second quarter of 2011. While China Marine is confident the seafood it uses to produce Mingxiang® snack foods are safe, it is unclear how long it will take for consumer confidence in seafood products to normalize. Management will provide a detailed update when it reports its second quarter 2011 results.
"The long term fundamentals of our businesses remain strong and we are committed to continually investing behind our brands," stated Chairman and CEO, Mr. Pengfei Liu. "While we believe that these sales disruptions in our seafood products are temporary, we are working diligently to ensure the safety of our products to our customers and distributors. Hi-Power continues to gain traction and the product diversification clearly benefit the shareholders at times such as this."