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Extracted from Annual Report 2020

Dear Bosses

Qian Hu has weathered many crises in our journey – the Asian Financial Crisis from 1997 to 1998, the aftermath of the 9/11 terrorist attacks in 2001, the Subprime Crisis between 2007 to 2009, and now, the COVID-19 pandemic. I am sure you would all agree that COVID-19 is by far the most extensive crisis as it has devastated many businesses and lives all around the world, where hardly any country has been spared its effects.

I am reminded once again about the two significant setbacks that Qian Hu went through over the years. In 1989, a severe thunderstorm wiped our entire inventory of guppies. A few years later, in our haste to rebuild our fish business, Qian Hu hit another major snag when our entire inventory of 4,000 loaches died as loaches are particularly sensitive to noise and were affected by the nearby construction. Back then, it felt like it was ‘game over’ for Qian Hu! However, we were determined to overcome this major crisis, and we did. In fact, we have always viewed our past setbacks as opportunities for us to grow and improve ourselves.

Similarly, as if to balance its disastrous effects, this crisis too has presented us with opportunities - to be humble and learn more about ourselves and about our humanity; to embrace technology, and to think out of the box.

Riding The Waves

Just like a surfer who rides the waves, the secret to success is the ability to rise up and stand on the board again after a wave hits, so that there is a chance to ride the next wave. Resilience is not about staying up the whole time and never falling. It is about getting back up quickly after being knocked off the board and doing even better when the next wave comes along. It is about focusing on the next great opportunity.

While the wave of the COVID-19 pandemic has hit hard, rest assured that we are building our strength and resilience to get up again – in time for the next wave

Upping Our Ante In Aquaculture

Aquaculture remains a major driver of Qian Hu’s future growth as we expect it to be many times bigger than our current core Ornamental Fish business. To that end, we have leveraged our experience in Hainan and piloted a successful project in farming mono-sex giant freshwater shrimp in Singapore. We also embarked on the contract farming of freshwater shrimp in Desaru, West Malaysia in July 2020.

The expansion of our Aquaculture business closer to home is also in line with the Singapore government’s goal of producing 30% of the country’s nutritional needs by 2030. As such, we have been upping the intensity of developing our Aquaculture farming systems to achieve highly efficient methods that are space- and costefficient, as well as friendly to the environment. This technology, knowhow and expertise can also be shared with other local breeders as we collectively work towards our national food sustainability goal.

Innovation Remains At Our Core

R&D remains core at Qian Hu. This year, we have worked tirelessly to improve our Aquaculture filtration system technology as we move towards high-tech farming. Aside from our focus on the breeding of mono-sex giant freshwater shrimp to ensure better quality stock, we are also in the midst of working with researchers to develop yeast-based fish nutritional products on top of our existing antibiotic-free feeds.

Despite the severe impact of the pandemic this year, our Ornamental Fish team has not rested on its laurels with ongoing R&D to further improve overall productivity and automation.

Similarly, the Accessories division has also been working hard to bring new products to market, such as the range of OF Kirameki series of professional and super-premium Koi feed that imparts colour-enhancing properties to competition-grade koi fish while nourishing the fish with probiotics and immune boosters.

Refining Our Ways Of Working

This year, we have closely reviewed our supply chains to develop stronger domestic networks within each of our export hubs in Singapore, Malaysia, China, Thailand and Indonesia. We have also deployed land transport options in view of the fact that there has been a substantial reduction of flight frequencies that hamper our fish exports.

As consumers increasingly turn to online channels for their purchases, Qian Hu has pivoted our approach to sales and marketing as well. Our retailers have been working closely with us to promote and market products via live broadcasts on popular online and social platforms in each market.

Welcoming The Next Generation Of Leaders

More than 15 years ago, we started preparing the next generation of leaders at Qian Hu as part of our commitment to building a business that lasts for generations, alongside a seamless transition of leadership. Our succession programme – initiated since 2004 – has resulted in a cohesive and experienced team which has undergone a demanding grooming process that involved job rotations and overseas postings. Amongst them, the Board’s Nominating Committee has identified the Group’s next CEO – Mr Yap Kok Cheng.

Kok Cheng joined Qian Hu in 2005 as a management trainee at our Beijing subsidiary where he developed distribution channels for Ornamental Fish and Accessories in the Northern China region. A year later, he moved on to the role as the General Manager of Beijing for 10 years before being appointed Head of China Operations from 2016 to 2018. He was also responsible for setting up our new Aquaculture business in Hainan.

With effect from 1 January 2021, Kok Cheng has assumed the role of the Group’s CEO while I remain as the Executive Chairman to ensure a smooth transition. I trust you will join me in welcoming Kok Cheng as he and his team prepare to take Qian Hu into the next lap.

Looking Ahead

It is anybody’s guess what the business outlook looks like whilst we are in the midst of a pandemic. Suffice to say that the macro economic climate remains extremely challenging, until a viable solution is found to stem the pandemic.

I have always believed that even in extreme economic situations, one would not stop caring for one’s pets, and this crisis has confirmed this conviction, underscoring the resilience of market demand in our industry. Our new initiatives in the breeding of mono-sex giant freshwater shrimp in Malaysia and Singapore are an expansion of our Aquaculture business, which we are optimistic about. When executed successfully, we hope to replicate this in our other hubs, as well as to expand the product range. We also bear in mind the long-term goal of Singapore’s critical need to find sustainable solutions for food security and sufficiency by 2030.

While we recognise that we are not able to control the external economic environment, we can, however, do what we must to renew our products and processes, continue to innovate, and digitalise our operations. Although there are challenges to overcome, we believe we will emerge much stronger than before.

I would like to take this opportunity to thank our Board of Directors, our business partners, our customers, our employees and most of all, our shareholders, for standing by Qian Hu for the last 20 years. As we ride out the crisis together, we will continue to positively position the Group for the next waves of growth and opportunities.

Have a safe and bountiful year ahead.

Kenny The Fish
Executive Chairman