KUALA LUMPUR (June 12): Ocean Fresh Bhd, a frozen seafood company en route to the ACE Market, is seeking to more than double its storage capacity in order to capitalise on the seasonality of seafood products.

The company plans to spend RM8 million, more than half of the money raised from its initial public offering (IPO), to increase the capacity to 4,700 tonnes from 1,700 tonnes, with a new cold storage facility next to its processing plant in Kuantan, Pahang. The company’s current cold rooms are nearly filled to the brim.

“When we have extra cold rooms, we have the chance to keep the lower-priced raw materials,” its executive director Kee Wan Chum told reporters after the prospectus launch. “We can wait for the better-priced season” with extra space, she said.

Ocean Fresh is principally involved in the processing and trading of frozen seafood products as well as the provision of frozen seafood processing services to its customers in Malaysia, Türkiye, China, Thailand, Vietnam and Japan.

KAF Investment Bank’s corporate finance director Yap Chin Fatt was also at the launch of Ocean Fresh's IPO prospectus.

The turnaround of the products is “very short”, said KAF Investment Bank’s corporate finance director Yap Chin Fatt at the same press conference. “The issue of making losses from the purchases is quite remote as they are doing daily purchases.”

"When the [seafood harvest] season is good, they can purchase more and capitalise on that,” he said.

The company reviews the price trend daily to secure the cheapest source available as the business is sensitive to price volatility, Ocean Fresh’s Kee said. The company sources its products from not only Malaysia but also overseas suppliers hailing from India, Indonesia, China, and the Philippines.

On logistics, Kee said the company has managed to pass on the increase in shipping costs resulting from the Red Sea Crisis to customers.

As for the local supply chain, she said the removal of diesel subsidy — which was recently announced by the government — has no impact on the industry as local fishermen are still entitled to subsidised diesel.

The additional space will also allow Ocean Fresh to focus on market expansion, particularly in China, Kee said. Overseas customers contributed more than 80% of the company’s revenue, she added, with China accounting for 30%.

For the financial year ended Dec 31, 2023 (FY2023), Ocean Fresh reported a net profit of RM6.95 million or a basic earnings per share of 4.34 sen, on the back of RM159.45 million in revenue.

Ocean Fresh is slated for listing on July 4.