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CFNC (China) Signs Maintenance Deal For 500 Fishing Vesselsff

6 April 2004 China

In yet another step towards expanding its business in China, the Singaporean company See Hup Seng said it has entered into a joint venture to repair and maintain more than 500 fishing vessels of CFNC, one of China's biggest fishery enterprises.

See Hup Seng said it has signed a memorandum of understanding with China National Fisheries (Group) Corporation (CNFC) to establish the joint venture.

The repair and maintenance work will include providing corrosion prevention services, which See Hup Seng will undertake directly. In addition, CNFC will assist the joint venture to obtain repair and maintenance contracts for coastal vessels plying in China.

CNFC and See Hup Seng will also explore other areas of co-operation to expand the business scope of the venture. The detailed terms of the contracts and the joint venture will be specified in the various agreements to be entered into between the parties concerned before June 30, 2004.

See Hup Seng said that with the joint venture, it is poised to diversify and expand its existing corrosion prevention business out of Singapore into the larger and potentially more lucrative mainland China market, and move up the value chain into the main contracting business. In addition to the latest venture, the company also has a project to install gas pipelines in Qitaihe City, Heilongjiang province.

CNFC is the largest vertically integrated fishery enterprise in China. Founded in 1984, its primary business activities include marine fishing, aquaculture, processing and trading of seafood, and construction of fishing vessels, equipment and fishing ports.

CNFC operates a fleet of over 500 ocean-going fishing vessels, including 3,000 tonnage trawlers with processing facilities, special squid fishing vessels and refrigerated transportation vessels.

It has fishing operations across the Pacific Ocean, Indian Ocean and Atlantic Ocean, and is estimated to have an annual fish harvest of about 400,000 tons. As at the end of 2002, it has 20,000 employees, and total assets of RMB7.7 billion (S$1.6 billion).