Oceanus Group has signed an investment intention worth RMB200 million to help grow its alcohol distribution business with a local authority in China.
The agreement is signed with the Shaoxing Huangjiu Town (Dongpu) Development and Construction Management Committee.
The committee is with the Agriculture, Rural and Water Resources Bureau of the Yuecheng district, of the town of Shaoxing, known since ancient times for producing yellow wine made such as the Nü Er Hong, popularised in martial arts novels and shows.
Via its subsidiary Season Global, Oceanus runs an extensive business of distributing products including alcohol and other foodstuffs. Oceanus is already tapped by the likes of Australia's Treasury Wine Estates as an exclusive for some of its products.
Via this partnership, the local partner will import alcohol distributed by Oceanus, and also provide access to logistics and other services, says Sammul Lin, group COO of Oceanus.
On the other hand, Oceanus will help expand the distribution and grow the demand of yellow wine produced by Shaoxing.
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Shaoxing, the town, is located in the prosperous province of Zhejiang on China's east coast. It produces different brands of yellow wine such as Guyue Longshan, Kong Yiji and Bai Ta.
Tapping on its local attributes in rice, water and know-how, Shaoxing accounts for around half of China's total production of yellow wine and Shaoxing wants to create a more distinct regional branding based on this product with the development of a "town" integrating related activities ranging from production, marketing to distribution.
Besides domestic consumption, key export markets for yellow wine include Japan, Korea, as well as Asean and other international markets.
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Qian Linjiang, head of Yuecheng district, says Shaoxing has produced yellow wine since ancient times and boasts a strong local wine culture.
"Moving forward, we wish to build Yuecheng into a truly global wine town. We are delighted to cooperate with a trusted partner like Oceanus," he says.
Peter Koh, Oceanus' group CEO says the company's extensive distribution network is recognised by many local governments and provinces in China.
"We are often approached by various municipalities to support cross-border trades," he says.
"This agreement will serve to further strengthen the economic and trade relations between Shaoxing, China and Singapore, including the cross-promotion of goods within Asia Pacific," says Koh.
Oceanus shares closed at 0.9 cents on May 29.
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