Texas-based shrimp company exchanged in Chinese joint venture deal

Date:2017-01-10 View: 14 Compiler:

A Texas-based shrimp broodstock company has been used as a sweetener in a joint venture deal between two large Chinese agricultural conglomerates.

Texas Primo Broodstock Inc., a shrimp domestication company with a breeding center located at an inland bio-secure facility in Brookshire, Texas, will be placed under the ownership of a new Chinese CNY 169.2 million ($24.4m) joint venture agreed last weekend in Ningbo, Zhejiang Province, East China. 

One of the partners in the joint venture is Texas Primo’s Chinese parent company Ningbo Tech-Bank, which, contrary to its name, is neither a bank nor technology company but a large market-listed agricultural conglomerate.

Ningbo Tech-Bank will invest CNY 55.1m in the joint venture, called Guangdong Haimao Industry, and also transfer its 100% ownership of Texas Primo to the joint venture.

The second Chinese partner in the joint venture, which will invest CNY 114.1m, is a group of four subsidiaries owned by Chinese broodstock and shrimp fry company Haimao Group.

Haimao Group, which is based in China's important shrimp-producing region of Zhanjiang, is owned by the Chen family and operates three broodstock centers in China and 10 shrimp fry production sites. Each of the four subsidiaries is run by a family member.

The joint venture stock will be split 67:33 between the Chen family and Ningbo Tech-Bank respectively. 

The joint venture formally ties Texas Primo to the two Chinese companies it was already working with – Haimao Group was the exclusive distributor of Texas Primo broodstock in China prior to the deal. 

Fish First, a Chinese trade magazine, said: "Currently the best quality shrimp broodstock are controlled by foreign companies. 2017 is already worth remembering for being the first time China's industry has control over its own shrimp resources."

It is not clear when Ningbo Tech-Bank purchased Texas Primo, although the purchase was through a Delaware-based shell company called TB Food USA Holding Corporation. Texas Primo was not available for comment on the deal.

According to Texas Primo’s website, the firm’s goal is to produce disease free Litopeneaus vannamei broodstock families. It currently exports shrimp broodstock globally.

In 2015, Ningbo Tech-Bank reported full-year revenues of CNY 2.14 billion.

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