HQ Sustainable Maritime Industries (AMEX:HQS)
HQ Updates "Blue Ocean" Roadmap for the New Year
The 'value of sustainability' positions HQ for record growth.
SEATTLE May 29th, 2007 -- HQ Sustainable Maritime Industries, Inc.
(AMEX:HQS),a leader in toxin-free integrated aquaculture and
aquatic product processing, announced today its updated roadmap
for growth for the coming year.
Dear Shareholders:
Since my last communication in November, 2006, HQ Sustainable
Maritime Industries, Inc. has continued its growth and is now newly
listed as an AMEX company. This growth reflects the market's
response to the 'value of sustainability' and 'quality',as opposed to
sales based on price alone. Management believes that HQ is
responding to new "Blue Ocean" opportunities for aquaculture "... Value innovation is the corner stone of blue ocean strategy. We
call it value innovation because instead of focusing on beating the
competition, you focus on making the competition irrelevant by creating
a leap in value for buyers and your company, thereby opening
up new and uncontested market space. ...blue and not red ocean "excerpt from the, "Blue Ocean Strategy" a Harvard Business School
Publication.
HQ's value innovation in aquaculture and marketing is a response to
market demands. This is the "blue ocean" opportunity in aquaculture
for HQ. Our roadmap follows. This value innovation is divided
into;
- Innovations in vertical integration
- Innovations in product differentiation
- Innovations in market demand and HQ
- "Blue Ocean" Growth
1. Innovations in Vertical Integration
Organic feed production
We have a new 100,000 tonne per year feed mill under construction
which will be the first haccp and EU certified feedmill in China. The
feedmill is expected to be completed later this year. Currently we formulate
the feed to our specifications. We do not use fishmeal in the
feed to avoid the introduction of ocean pollutants such as heavy metals,
PCB's and dioxins. In stead we choose vegetal ingredients and
nutrients which favor growth and provide the best nutrition for the
consumer of our products. We own our own nutraceutical plant which
among other products manufactures a high grade vitamin E from palm
oil which when added to the feed promotes vigorous growth and disease
resistance of the Tilapia, further reducing the need for anti-biotics
as well as embedding in the flesh of the tilapia for the benefit of our
consumers. The feed produced will be extruded which increases feed
efficiency decreasing costs of aquaculture production.
Sustainable Cooperative Farming Practices
HQ's pond farms demonstrate environmentally friendly aquaculture
solutions that ensure sustainable production of good-tasting fish
that are free of all toxins, including hormones and antibiotics.
HQ's Pond Raised Solutions
- Pond environment controls inflow and outflow of water avoiding
the need for any prophylactic use of antibiotics required for cageraised Tilapia;
- Pond-grown algae provide excellent feed supplement where adequate
quantities of dissolved oxygen are present,which eliminates any off-flavor from anaerobic algae cultures.
- HQ's poly-species approach mimics nature by introducing natural
bottom feeder fish and predator fish to maintain the pond eco-system.
- Tilapia are herbivores and no fishmeal need be added to tilapia
feed which could possibly introduce ocean-sourced pollutants such
as heavy metals,PCB's or dioxins. Pond stability provides favorable
feed conversion rates over cage-raised tilapia.
- Finally ponds are located away from mangrove swamp areas to
preserve crucial natural habitat and used pond water provides valuable
natural nutrients to neighboring farmers' fields instead of
being released into waterways which could create downstream concerns
to other waterway users.
2. Innovations in Product Differentiation
Breaded and Flavored Innovations
HQ has joined with Newly WedsTM Foods,Inc. to introduce an
exclusive innovative line of battered and breaded flavored
TiLoveYaTM fillet products and a range of flavored products.
This new line of products uses the vast international taste technology
of Newly WedsTM Foods Inc., as developed in its China operations,
to manufacture value-added breaded "TiLoveYaTM" toxinfree
fillet products to consumers in China . Most breaded valueadded
fish products currently marketed in China and the West suffer
in quality from multiple rounds of freezing, deteriorating the
taste, juiciness, texture and quality of the product.
HQ will focus on fresh fillets that are frozen only once, coupled with
Newly WedsTM food technology know-how, to bring a higher quality,
breaded value-added TiLoveYaTM fillet to market. Fast food
chains and big city service and retail industry outlets have been targeted
and the initial response has been very positive.
"Sea Flavored" Innovations
HQ co-owns with Newly WedsTM Foods,Inc, technology to naturally
flavor tilapia, giving it the taste, texture and aroma of fresh ocean
caught fish.
The product is being produced in block and fillet format, catering to
both retail and service industry applications of HQ's branded
"TiLoveYaTM" tilapia. The new product has successfully met sensory
testing with a variety of industry leaders anxious to access a quality
farmed supplement to dwindling ocean sourced product.
The new product line responds to industry demand for a range of
products that better imitate "sea flavor" fish without the drawbacks
of ocean caught product. HQ's "TiLoveYaTM" tilapia has the following advantages over ocean-caught fish:
- Farmed tilapia is 100% sustainable and does not deplete our
oceans of its crucial bio-diversity. If we do not change current consumption
practices many are predicting disaster by 2048 (See
National Geographic at http://news.nationalgeographic.com/news/2006/11/061102-seafood-threat.html).
- Farmed product allows for "just-in-time" delivery to service
industry and retail consumers, unlike limited and often seasonal
ocean production from such dwindling species as Pollock.
3. Innovations in Market Demand and HQ
'Value innovation' has also led to the creation of the Aquaculture
Certification Council where HQ actively participates in vetting
through its operations 'Best Aquaculture Practices (BAP), with
Industry support from the likes of Wal-Mart and McDonalds.
HQ recently celebrated 'Earth Day' by donating one percent of its
sales of "TiLoveYaTM" toxin free,fresh water,farmed Tilapia with
one half of proceeds going to the Ocean Trust (See
www.oceantrust.org ) for its sustainable ocean harvest program and
one half to the Nature Conservancy (See www.nature.org ) and its
'Rescue the Reef' program.
Announced sales of HQ's unique "TiLoveYaTM" branded product signify
market endorsement of its innovative quality and sustainability.
- Sam's Club is a division of Wal-Mart Stores,Inc. and ranks as one
of the nation's largest warehouse clubs with more than 47 million
U.S. members. The first Sam's Club opened its doors in Midwest City, Oklahoma in 1983. Sam's Club offers exceptional values on merchandise
and services for business owners and consumers. Online
merchandise and Club information is available at www.samsclub.com.
- Grocery Outlet sells HQ's branded "TiLoveYaTM" products to its
nearly 150 stores on the West Coast. The Grocery Outlet chain (See
http://www.groceryoutlets.com/home.aspx ) is headquartered in
Berkeley ,California ,and has annual revenues exceeding $600 million.
The Grocery Outlet to sell HQs brand of frozen fillets within its
chain of stores in the states of California ,Washington ,Oregon,
Nevada ,Idaho and Hawaii.
- A variety of other stores including Metropolitain, QFC and online
sales through Ultimate Entree
4. 'Blue Ocean' growth
HQ is making the competition irrelevant. ‘Blue Ocean' growth will
continue through an announced funding initiative, drawing on the
proceeds of a Follow-on offering led by our Investment Bankers,
Roth Capital and Ladenburg & Thalmann, to;
- Build a new processing plant to more than double capacity;
- Build new hormone-free fry breeding facilities
- Complete its new Organic feedmill
- Process its own waste products to extract valuable omega 3 oils
and protein nutrients to be used by other aquaculture farmed
species like shrimp
- Upgrade and expand nutraceutical product production and
quality and expand marketing to other countries in Asia
In 2006 HQ achieved more than 8 million ‘ebidta’ and, although no
assurances can be given, management expects to continue growth
at an unprecedented rate.
We welcome any questions or concerns that you, our investors,
might have concerning our plans for growth and our partnership
with you. Please contact us at hq@hqfish.com.
Lillian Wang, Chairman
About HQ Sustainable Maritime Industries, Inc.
HQ Sustainable Maritime Industries, Inc. is an integrated aquaculture
and aquatic product processing company, with operations
based in the environmentally pristine island province of Hainan, in
the South China Sea. HQ practices cooperative sustainable aquaculture,
using nutraceutically enriched feeds and conducting fish processing
and sales. The company is dedicated to sustainable toxinfree
methods giving its customers the purest products possible. The
Company holds HACCP certification from the U.S. FDA and the EU
Code assignment of quality, permitting its products to be sold in
these international markets. It owns a nutraceuticals and health
products company, which is HACCP and GMP certified, and produces
and sells products subject to stringent laboratory tests certified
by the China Ministry of Health. This GMP certified plant produces
nutraceuticals, which enrich feed used by HQ's cooperative
aquaculture operations. In addition to headquarters in Seattle, HQ
has operational offices in Haikou, Hainan. (http://www.hqfish.com).
# # #
Certain statements in this press release that are not historical facts
are "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements may be
identified by the use of words such as "anticipate," "believe,"
"expect," "future," "may," "will," "would," "should," "plan,"
"projected," "intend," and similar expressions. Such forward-looking
statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or
achievements of HQ Sustainable Maritime Industries, Inc. (the
Company) to be materially different from those expressed or implied
by such forward-looking statements. The Company's future operating
results are dependent upon many factors, including but not limited
to the Company's ability to: (i) obtain sufficient capital or a
strategic business arrangement to fund its expansion plans; (ii) build
the management and human resources and infrastructure necessary
to support the growth of its business; (iii) competitive factors and
developments beyond the Company's control; and (iv) other risk
factors discussed in the Company's periodic filings with the
Securities and Exchange Commission, which are available for review
at www.sec.gov under "Search for Company Filings."
Contacts
Norbert Sporns, Chief Executive Officer
HQ Sustainable Maritime Industries Inc.
Tel: 206-621-9888
Fax: 206-621-0318
