CONSUMER brands conglomerate AVI looks like it has a renewed appetite for hake specialist Irvin & Johnson (I&J).

I&J delivered one of its most convincing set of results in many a moon in the year to end June when the company posted a solid R179m in operating profits despite having to incur a markedly bigger fuel bill.

The latest profits beat the R165m generated for the two previous financial years – although it did not top the R238m recorded in the 2009 financial year.

I&J’s performance follows news of a solid performance from Brimstone controlled hake fishing group Sea Harvest, and hopefully points to a period of sustained profitability for the sector (which has endured some choppy waters in the last decade).

I&J saw heartening growth in ‘out-of-home’ volumes in local market, and scored from higher export volumes from an increased hake quota.

In an investment presentation AVI CEO Simon Crutchley showed higher retail prices locally by I&J were offset by mix change (less retail, more food services and fish). The export business saw an improved exchange rate and better pricing in some markets.

Things look steady for I&J in the year ahead with higher hake volumes flowing from a quota increase. Crutchley also believed there would be an “incremental development of export market opportunities”, while the local position would be strengthened.

He said some of the strategic initiatives will include product differentiation and new product development.

There would also be further cost saving initiatives, and a reduction in non-core activities.

AVI clearly feels that I&J is on an even keel, and a number of expansion projects are underway.

Firstly, there is a willingness to grow abalone volumes, which requires R12m to be spent on expanding the company’s abalone farm capacity from 230 to 300 tons. This expansion is scheduled for completion in early 2013.

The company is also looking to upgrade the Marel processing line at its Woodstock factory at a cost of R59m. The upgrade should ensure labour efficiency, better product yields and improved quality. The commissioning is planned for later this year with a three year payback cycle pencilled in by I&J.

A vessel replacement plan is also being mulled.