Fishery company Pacific Andes International Holdings plans to enhance its production capacity of seafood processing business from 90,000 tons to 150,000 tons in two years.

The company's vice chairman and managing director, Ng Joo-siang, told China Daily that the target could be achieved with the soon-to-be-operated processing factory in Hongdao in East China's Shandong province.

"The factory's first phase will begin operation in a few months. The project alone can generate 120,000 tons of fish fillets per annum once it is fully operated," he said.

Ng said with 90,000 tons of production from the existing 20 processing factories on the mainland and two factories in the US, the total annual production could increase to 150, 000 tons in two years.

Collaborating with two Singapore-listed subsidiaries - China Fishery Group and Pacific Andes, the group is managing the whole vertical chain of fishery business.

"The Hong Kong vehicle is mainly responsible for the seafood processing (downstream) businesses. The two subsidiaries principally undertake trading (midstream) and fishing (upstream) businesses."

Ng said that the company's net profit margin of the upstream business is 30 percent, and for the midstream and downstream business, the profit margin stands at 2 percent and 3 to 5 percent respectively.

He added that the company strives to extend its upstream and downstream businesses, which currently weigh 32 percent and 27 percent of the total revenues.

"We've ploughed to increase the scale of the upstream business because the segment is pretty profitable," he said, adding the increase in fish price could withstand the oil hike.

"Fuel costs account for 18 percent of operating costs for our upstream segment, much lower than the industrial average of 40 percent. Given fish price grew about 10 percent per annum over the past three years, it can offset the mounting oil pressure."

Aside from the investment in Hongdao, Ng revealed the group earmarks $100 million capital expenditure this year, which are mainly used for purchasing new vessels and fishing facilities in Peru.

Ng said that the two subsidiaries might carry out fundraising via rights issues, but he stressed that it would not dilute the shareholdings of Pacific Andes International in the two companies to below 51 percent.

Even though the company has earlier raised $160 million syndicate loan, Ng said the company's financial status remains healthy.