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Send  Share  RSS  Twitter  05 Mar 2012

FISHING: Wholly Mackerel For Oceana

 



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SOUTH AFRICA’s largest diversified fishing groups have come through 2011 with their operating profits intact – even though some businesses did show some signs of strain in tough trading conditions.

Market leader Oceana can thank a strong showing from its mass market protein offerings - horse mackerel (which is exported into Angola, Cameroon and the Republic of Congo) and canned fish (the well-known Lucky Star pilchard brand) for a solid showing in financial 2011.

Oceana’s large inshore division (which includes the pilchard segment) performed well with revenue dropping only 1% to R2.27 billion.

Oceana CEO Francois Kuttel, writing in the company’s recently released annual report, indicated that canned fish sales volumes on the domestic market were considerably higher in response to significant promotional activity in the initial months of the financial year.

The only weak spot was that canned fish sales in the United Kingdom declined after a business restructure and difficult trading conditions. But Kuttel stressed that overall profitability from canned fish operations was well above the prior year.

More impressive was the powerful performance from horse mackerel helped the midwater/deep water division to post a 39% increase in profits to R274 million off turnover of R1.17 billion.

Kuttel noted that to compete against large offshore producers in retaining and developing market share, the company had followed a policy of manufacturing high-protein meals aimed at niche markets where prices are generally better than those offered for lower-quality product.

He explained that keeping a commodity-based business profitable required high volumes of raw fish in a steady supply stream to the reduction plants at as low a cost as possible. “Having reviewed Oceana’s fishmeal performance in 2011 against this background, management is expediting experimental midwater trawling with own fleet capability and with third parties to increase landings of industrial fish, and implementation of sustainable cost reductions.”

Kuttel reckoned it might be necessary to restructure fishing effort and production to accord more closely with varying fish availability and competition from other major producers.

He said the canned fish business’s expanded supply chain allowed Oceana to better support Lucky Star branded products – both traditional and newer variants – on the local market and also to supply export growth prospects.

All aspects of maintenance and development of the range and supply of raw and finished product and the administrative and financial management of the complex logistical system receive close management attention.”

Kuttel said the horse mackerel business appeared to be well placed to maintain and improve on its steady operational and financial performance. “Over the years success has been built on the cumulative effect of significant capital investment in capability, securing volumes of raw fish, producing a quality frozen product, and understanding and developing the market.”

He said focus in the strong performing horse mackerel division would be on further developing distribution arrangements in major markets, product differentiation, and expansion of market range and share.

Oceana fared less well in the anchovy segment, landing a catch that was 43% lower than 2010 at 21 444 tons (comprising 47% of its A season anchovy quota). Kuttel said no anchovy has been available in the catching areas during the B season.

He said landings of red-eye herring were also poor and lower than last year, while fishmeal production volumes were consequently well below those of the previous year. “Weak demand in international markets as well as increased supply from Peru put pressure on fishmeal prices which together with the low volumes resulted in a substantial loss for the financial year.”

While Oceana landed 99.8% of its total allowable catch for West Coast lobster, Kuttel said profit declined as higher selling prices in foreign currency were negated by a stronger rand exchange rate.

The squid division also saw Euro selling prices improving, but still made a small loss for the year.

Sekunjalo owned Premier Fishing – which specialises in west coast and south coast lobster - managed to generate a stout R12 million profit off turnover of R223 million in financial 2011.

Sekunjalo CEO Khalid Abdullah said the fishing business, which is mainly export orientated, was also starting to see the benefits of recent capital expenditure. “We are confident of markedly increasing additional outside quotas for the 2012 season.”

While both Premier Fishing’s lobster divisions performed soundly, the pelagic division did not fare well in the 2011 season due to poor weather conditions which reduced the number of fishing days.

Abdullah said the division managed to land its entire pilchard quota. But he said the landings for anchovy were significantly less than last year.

Abdullah said Premier Fishing’s squid division improved substantially with an increase in market demand. “Pricing in the European market has increased by 25%, and the volume of squid landed has also increased by 11%.”

Abdullah was also encouraged at the progress at Premier Fishing’s aquaculture activities at Gansbaai. “The abalone farm continues to produce good results and our decision to expand this business is one of the key strategies…”

Abdullah said the aquaculture division performed better than last year as a result of the increased sales prices received internationally. He said abalone volumes sold during the year were also 20% higher than last year.


 
 
 
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