China Food (LON:CFC) , the AIM quoted Chinese manufacturer of cooking and dipping sauces, has raised £2.7 million in a share placing priced at 53 pence per share. The funds have been earmarked to fund the supply of additional fermentation silos and pay for the marketing of the company’s new premium Xaka soy sauce range, as well as to help drive additional growth. The China Foods share price fell back by 2.5% to 57.5p early on.

John McLean, China Foods’ non-executive chairman, said: “The Board is delighted to have raised funds to assist with our continued growth. The company has had a good start to the year and looks forward to introducing its new premium product with the new Xaka soy sauce range. A recent report showed that every second consumer in Shandong believes that well-known brands are always better quality, and 30% are prepared to stretch their budgets to pay a premium for the higher quality product, which further validates the rationale for our new product. We are pleased to have attracted some significant new investors and would like to also thank our existing shareholders for their continued support.”

Last week, China Foods reported a 19.1% rise in full year revenues to £35.9 million with pre-tax profits up by 33.1% to £3.8 million. Net debt increased by £3.5 million to £9.3 million. The company said it had made a strong start to 2011 with condiment sales up 20.4% in the first quarter against 2010.

China Foods is based in Shandong province in China, a region with a population of approximately 94 million. The group makes numerous different product lines including soya sauce and bean paste, all targeting the Chinese domestic market, and sold through a network of distributors and outlets of supermarket chains in the north-eastern region of the PRC, such as Tesco, Walmart, Carrefour and Jialejia.
Last May the company opened a new factory as part of a three-phase expansion plan that will add 100,000 tonnes of capacity through the building of 230 additional silos. In the first phase, 89 out of 131 existing fermentation silos have been filled.

Unlock the rest of this article with a 14 day trial

Unlock with Email
Unlock with Google

Already have an account?
Login here