Wed 9 Jun 2010, 15:28 GMT

Andatee signs 10-year supply agreements


Chinese firm to supply marine fuel on an exclusive basis in Jinghai and Haiyu.



Andatee China Marine Fuel Services Corporation, the leading independent operator engaged in the production, storage, distribution, wholesale purchase and sale of blended marine fuel oil for cargo and fishing vessels in Northern China, today announced that it has signed exclusive agreements with Haiyu Fishery Limited Corporation and Jinghai Group to supply marine fuel, on an exclusive basis, for a period of 10 years. Both Haiyu and Jinghai are located in Rongcheng City, Shandong Province.

Under the terms of the agreement with Jinghai, Andatee will guarantee the supply of up to 18,000 tons of marine fuel per year. In addition, during the cooperation period, Andatee will receive exclusive rights to operate, for a period of 10 years, in the Jinghai port area in return for an annual payment of RMB 1 million (approximately USD0.15 million) for the first three years.

Similarly, under the terms of its arrangement with Haiyu, Andatee will guarantee the supply of up to 12,000 tons of marine fuel per year and will receive exclusive rights to operate, for a period of 10 years, in the Haiyu port area.

Andatee expects RMB 135 million (approximately USD19.76 million) in revenue and RMB 5 million (approximately USD0.73 million) in net income from both exclusive agreements to contribute to its top-line growth and to be accretive to its annual earnings.

During the remaining months of 2010, the company expects to achieve RMB 80 million in revenue (approximately USD 11.71 million) and RMB 3 million in net income (approximately USD 0.44 million) from these agreements.

"We are very pleased to be able to cooperate with both Haiyu and Jinghai as it strengthens our capability to provide quality and stable supply of marine fuel in the region. We see this as a major milestone for Andatee and we believe we have the right strategy in place to rapidly expand our footprint in coastal cities in China," commented An Fengbin, Chairman of the Board and Chief Executive Officer of Andatee.

Deal   China 

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