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hina-based food company China Minzhong Food Corporation (CMFC), which is owned by Indonesian noodle giant Indofood Sukses Makmur, lost more than two thirds of its profits in the three months ending in September because of China'€™s economic slowdown and reduced promotional efforts.

CMFC recorded a 73.1 percent decline to CN¥15.5 million (US$2.44 million) in its net profits during the July to September period, from ¥57.4 million in the corresponding period last year, according to a recent statement published by its parent company in the Indonesia Stock Exchange (IDX).

China Minzhong, which is listed in Singapore, starts it fiscal year in July.

The company, which cultivates and processes vegetables, saw its sales slip by 4 percent on an annual basis to ¥467.7 million in the reported period, compared to ¥487 million last year.

The CMFC said in the statement that the decline was due to a decrease in sales of Â¥48.1 million from the branded business segment. The company'€™s beverage business, according to the statement, suffered from a 47.6 percent annual decline during the period.

'€œ[The decline] was primarily due to the slowdown of the economy and the effect arising from a reduction in advertising and promotional expenses as we embarked on a comprehensive review of this business segment,'€ the company said.

The CMFC'€™s business comprises a processed vegetables segment, a cultivation segment (fresh vegetables and mushroom spores) and a branded business segment (beverages and other processed products).

The processed vegetables segment is the company'€™s main revenue generator, contributing around 40 percent to the company'€™s sales, according to the statement. The growth in the segment, however, stagnated at around Â¥196.3 million during the period, from Â¥197.2 million in the same period last year.

In addition, CMFC said in the statement it would face continuing challenges from rising urbanization, a shortage of rural labor and rising costs.

It was, however, confident about business as the Chinese government strongly supported the agriculture industry with the use of modern technology to enhance food security.

The Chinese government recently decided to abandon its one-child-only policy on concerns over its aging population and as cheap labor had started to become scarce, while its quarterly economic growth from July to September this year expanded at its slowest pace since 2009, according to Bloomberg.

Indofood, which only bought into the company in 2013 and has gradually boosted its ownership to 82.88 percent until now, is expecting to release a large portion of its ownership because the CMFC '€œneeds a longer time to reach the targeted results, bearing in mind the current investment sentiment level in China'€, according to a filing posted in the IDX earlier this year.

Indofood planned to raise S$416.4 million ($295.41 million) by selling 347 million CMFC shares at S$1.20 each to British Virgin Island (BVI) investment vehicle China Minzhong Holdings and the transaction was initially due to be completed by June, before it announced that the transaction was still under discussion.

The transaction would reduce Indofood'€™s stake in the CMFC to 29.94 percent.

A statement published in mid-October in the IDX, however, announced that a letter of intent with the BVI firm had been signed and a S$40 million payment was expected to be made before year-end.