New Zealand King Salmon makes major move into the Chinese market.
New Zealand King Salmon has announced a strategic move into the Chinese market through an exclusive distribution agreement with China Resources Food Supply Chain Co. Ltd (CRFSC). This agreement designates CRFSC as the sole distributor for a range of King Salmon products in mainland China.
As per the terms of the deal, CRFSC is obligated to order a minimum of 4,000 kilograms of salmon products per month at agreed commercial rates. If CRFSC fails to meet this monthly quota, NZK reserves the right to either terminate the agreement or appoint additional distributors within China.
This announcement follows the resumption of NZK’s trading relationship with CRFSC in May 2023. Since then, approximately 60,000 kilograms of salmon products have been sold to CRFSC, accounting for about 2.5% of NZK’s annual product volume.
The relationship between NZK and CRFSC is notable, as China Resources Enterprise Limited (CRE), which owns a 40% indirect stake in CRFSC, also holds 9.81% of shares in NZK. Additionally, Yuen Carol Chen, Deputy General Manager of Corporate Strategy and Development at CRE, sits on the board of NZK.
The Board of NZK believes this agreement aligns with the best interests of the company and its non-interested shareholders. China represents a significant export market for NZK’s premium salmon, offering opportunities for increased demand and supporting the company’s growth objectives. The terms of the Exclusive Distribution Agreement were negotiated on an arm’s length commercial basis, ensuring a fair and mutually beneficial arrangement.
