TOKYO, Kyokuyo Co. (TSE:1301) plans to start producing and selling frozen food in China as early as fiscal year 2007.

The Japanese food trading company hopes to increase its sales in China to 5-10 billion yen (US$42 million-US$84 million) in around five years from slightly less than 2 billion yen estimated for fiscal year 2006, which ends March 31, 2007.

Kyokuyo established a Chinese unit in Qingdao, Shandong Province, in autumn 2005. The unit buys salmon, finfish and other seafood in China and Russia, supplying them to wholesalers and processed-food makers in Beijing, Dalian and other major cities in northern China.

Kyokuyo also processes the seafood it buys in China and Russia at five subcontractor factories around Qingdao for export to Japan.

Under the company's plan, these factories will also produce frozen food to be sold in China under the Kyokuyo brand. In addition to seafood, the company's frozen food products for the Chinese market will include chicken and other meat.

The company eventually hopes to export processed food from China to the U .S. and Europe, where fish consumption has been growing.