Oceanus Group, the worldâs largest operator of abalone farms, plans to buy two companies this year to expand its food business and sell shares of its restaurant unit as early as 2012.
Oceanus expects to buy a Taiwanese food-packager by mid-2010 and acquire an Australian company later in the year to boost its supply of wild abalones, Chairman Ng Cher Yew said. Ah Yat Abalone Group, its chain of restaurants, will sell shares in Taiwan or Hong Kong, he said.
The company is expanding to ride on Chinaâs growing consumer market as the nationâs economy is expected to grow 9% this year, based on central bank estimates. Oceanus became the first foreign company to list shares in Taiwan last year as ties between the island and the mainland reached their warmest since the two were separated after a civil war six decades ago.
âWe want to see how we can basically acquire at least one Taiwanese packaging and processing entity and look at the Chinese market,â Ng, 50, said in a Jan. 8 interview in Taipei. The Taiwan listing âgives us a better profile with the government and an image in the market that will help the business.â
The company is based in Singapore, where its shares are traded. Oceanusâs operations are mainly in China, where its 137.9 million abalones are in 24,000 tanks along the countryâs southern coast.
More Restaurants
The Taiwan stock has risen 21% since the Taiwan depositary receipts were sold at NT$9.5 (41.6 cents) apiece in December, compared with a 2.1% gain in the benchmark Taiex index. The shares in Singapore lost 7.7% during that time.
Oceanus has 20 restaurants in markets including Singapore and China, according to Ah Yatâs website. The company aims to expand to 170 next year, with at least 120 on the mainland, Ng said.
The restaurant business may be worth as much as 2 billion yuan ($408 million) in two years, said Jeffrey Lau, an analyst at Polaris Capital (Asia) in Hong Kong.
âIt will be positive for Oceanus, as investors are in favor of Chinese catering companies,â Lau said.
Oceanus is considering the listing in Hong Kong or Taiwan because of demand for abalones from consumers in the two markets, Ng said. The restaurant chain, which is not profitable yet, may turn profitable by the end of the year, said Ng, declining to say how much the chain is making now.
âThe restaurant has a different risk profile, so eventually if itâs independent, it makes more sense,â Ng said.
www.theedgesingapore.com/the-daily-edge/...restaurant-unit.html