China Food Company saw net profit increase during 2010 as the manufacturer said today (11 April) that it shifted its focus from developing production to growing sales.
For the year ended 31 December, the Chinese cooking and dipping sauce manufacturer saw net profit rise 35.7% to reach GBP2.3m (US$3.7m), while revenue grew 19.1% to GBP35.9m.
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For the year, the company said its condiments business grew by 16.8% in revenue and 20.7% in profit before tax, finance and unallocated group expenses to reach GBP14.7m and GBP4.2m, respectively.
Commenting on the results, non-executive chairman John McLean said: “The group has now fully entered the sales and marketing phase of its development, having established the infrastructure to substantially increase production.”
The company said that it plans to launch a range of premium soy sauces called Xaka, which will comprise light soy sauce, dark soy sauce and Japanese shoyu. It plans to launch the range in the regional northern provinces in the summer.
It also said that it will consider acquisition opportunities outside of China, “particularly in Europe and South East Asia”, adding that it is seeking existing international brands to “capitalise on its distribution platform into China”.
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By GlobalDataChina Food grew revenue in its feed business by 20.7% to GBP21.2m, while profit before tax, finance and unallocated group expenses was up 59.6% to reach GBP1.5m. The company said that it’s profit contribution accounted for 26.1% of the group’s profit, up from 21% in 2009.
The group said that concerns about food inflation and worldwide commodity scarcity are expected to “again pose difficulties for the growth of the business” and that the business’ “sensitivity to external factors” makes it “difficult to plan for the future unless the feed business has scale to influence the industry”. The board said it intends to “review the direction of the group’s feed business” and may consider spinning off the business or a merger.
