AIM-quoted orange plantation owner Asian Citrus has signed its first contract to supply oranges to a supermarket in China.
The group will provide 5,000 tonnes of oranges for an initial eight-month period for approximately £1.75 million to Guangxi Yonghao Supermarket, a local chain in the Guangxi Zhuang autonomous region of China.
Chairman and ceo Tony Tong said the move was significant for three reasons.
“Firstly, it is Asian Citrus' first move to directly supply oranges to supermarket chains. Secondly, it is an expansion of the group's business from purely a 'farmer supplier' to a 'farmer plus wholesaler supplier'……finally, this move represents a horizontal expansion of Asian Citrus's business to create an extra revenue stream.”
Asian Citrus is China’s largest operator of orange plantations. The company has two plantations covering about 6,800 hectares - an area the size of Guernsey - which are located on approximately the same latitude as Florida in the US. The group cultivates two types of oranges - winter oranges and summer oranges and currently sells its oranges to corporate customers, wholesalers and sole proprietors in China.
In August, Asian Citrus successfully raised approximately £12m through a placing of 10,775,862m shares on the London stock exchange, at a price of 112p per share, valuing the company at approximately £68m.
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