Oceanus Sells Non-core Business

The Singapore-listed company also said it has ramped up its abalone production capacity by adding 5,150 tanks in the second quarter, bringing its total to 12,350 at the end of June.

In a statement to the Singapore stock exchange, Oceanus said the sale of its garment and lifestyle business will add another $5 million to the company's books.

"The garment and lifestyle business bears no synergies to the abalone aquaculture business and as such, it is best for Oceanus to dispose these non-core business units quickly and focus on growing our core business aggressively," Oceanus chairman Ng Yew said.

In the second quarter this year, Oceanus acquired 10 farms and built new tanks on existing farms for a total cost of 155 million yuan. Of the total, 130.6 million yuan was raised by a share placement on May 6, while another 24.4 million yuan came from the company's operating cash flows, the statement said.

A further 5,000 tanks are expected to be completed on the acquired farms before the end of this year.

A typical tank holds 800 cages, and the number of abalone per cage ranges from 20 to two, depending on size and age. At the end of the second quarter, Oceanus had 165 million abalone, compared with 110 million in the first quarter.

Yew noted that the abalone industry is experiencing an annual worldwide deficit of about 8,000 tons due to over-fishing and lack of enforcement of fishing regulations. Aquaculture is therefore the best alternative to cater for demand, he said.

Oceanus plans to have up to 20,000 tanks by the end of 2008, and up to 40,000 by the end of 2009.

The company said it also plans to enter downstream processing and brand marketing activities to become an integrated abalone provider.