• This photo shows fresh fish on sale in traditional old Chinese Soho food market on Graham Street, Central Hong Kong, China.

This photo shows fresh fish on sale in traditional old Chinese Soho food market on Graham Street, Central Hong Kong, China. (Photo : Getty Images)

Ningbo Tech-Bank buys Great Seven for 75 million yuan ($10.9 million) to increase the company’s presence in China’s cold fish feed market.

Qingdao Great Seven Bio-Technology Co. was founded in 2009 by a university professor at Ocean University of China, the country’s top university for marine research. The company produces aquatic feed for turbot, Chinese sturgeon, grouper and sea cucumber.

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In an interview with Chinese trade publication Fish First, Su Lirong, president of Ningbo Tech-Bank’s animal feed division said that “prior to the deal we didn’t have a production base in north Shandong [Province]. With the acquisition, Great Seven will become our main production base serving the Bohai region.”

The Chinese aquatic feed startup has built an “excellent reputation in aquatic feed industry in just a few short years. It is known for its cold-water fish feed, particularly those for flounder and grouper, Su said.

The company also has a “strong backbone” of research and has more than 80 patents, thanks to its close ties with the Ocean University of China. However, Great Seven had financial struggles in supporting further expansion.

Tech-Bank is looking at expanding the current 30,000 metric ton production capacity of Great Seven to 300,000 metric tons. However, issues on the “very fierce” competition in the aquatic sector and the relatively small-scale Chinese coldwater fish aquaculture could not just be eliminated.

“Currently market competition in the feed sector is very fierce [in China]. It is becoming more and more difficult to rely solely on aquatic feed manufacturing, or one aspect of the industrial chain,” Su said.

"So, we are beginning to replicate what we have done in the pork industry in the aquaculture industry, by entering production. In shrimp and crab, Tech-Bank is competing to gain market share,” Su added, continuing that the company is also looking abroad.

"Currently, Tech-Bank has a [feed] factory in Vietnam," Su said. "Should any other opportunities spring up we would also consider further expanding outside China.

Ningbo Tech-Bank had just bought Primo Broodstock last November. The Texas-based company develops vannamei shrimp broodstock mainly for export. Acquiring the expertise of Primo head Randall Aungst is a major draw of the deal.

The chief executive of Tongwei, the biggest aquatic feed manufacturer in China, said to Undercurrent News earlier this year that the company targets a 4 million ton production of aquatic feed each year by 2020. The firm is also aiming at foreign expansion.

Ningbo Tech-Bank buys Great Seven, hoping to eventually dominate China’s cold fish feed market.