Alaska/Pacific Coast

Alaska pollock fishery completes third RFM annual audit
Seafood Source By Michelle McNickle – February 3, 2015
The Alaska pollock fishery received the Alaska Responsible Fisheries Management (RFM) certification by completing its third annual audit. The goal of the audit is to monitor changes since the previous assessment.

Governor’s nominee insists he’s impartial as fish board fight looms in the Legislature
Alaska Dispatch News by Nathaniel Herz February 1, 2015
JUNEAU — Gov. Bill Walker’s nominee to the state Board of Fisheries says he can be impartial despite his past work on behalf of commercial fishermen, even as several lawmakers here said he’ll face a difficult confirmation battle.

Alaska fish processors chase Japanese market for an unusual product — cod semen
Alaska Dispatch News by Michelle Theriault Boots – February 2, 2015
Let’s get one thing out of the way right now: This is a story about cod semen and the people who love to eat it.
Right now, fishing boats are pulling Pacific cod from the Bering Sea and Gulf of Alaska. According to the North Pacific Fishery Management Council’s guidelines, fishermen are allowed to catch up to 325,000 tons of cod this year.


Strong Halibut Pricing Expected for the Year Ahead
Fish Site – February 3, 2015
US and CANADA – The 2015 halibut TAC has been set at 29.22 million pounds, around six per cent above the 2014 level. Strong pricing is now expected for the year, report Rob Reierson and Kyla Ganton, in the Tradex Foods 3-Minute Market Insight.

Federal Register

Fisheries of the Exclusive Economic Zone Off Alaska; Atka Mackerel in the Bering Sea and Aleutian Islands Management Area
A Rule by the National Oceanic and Atmospheric Administration on 02/03/2015
NMFS is prohibiting directed fishing for Atka mackerel in critical habitat of the Central Aleutian district (CAI) of the Bering Sea and Aleutian Island management area (BSAI) by vessels participating in the BSAI trawl limited access fishery. This action is necessary to prevent exceeding the A season allowance of the 2015 Atka mackerel total allowable catch (TAC) in critical habitat of the CAI allocated to vessels participating in the BSAI trawl limited access fishery.

Pacific Halibut Fisheries; Catch Sharing Plan
A Proposed Rule by the National Oceanic and Atmospheric Administration on 02/03/2015
NMFS proposes to approve changes to the Pacific Halibut Catch Sharing Plan (Plan) for the International Pacific Halibut Commission’s (IPHC or Commission) regulatory Area 2A off Washington, Oregon, and California (Area 2A). In addition, NMFS proposes to implement the portions of the Plan and management measures that are not implemented through the IPHC. These measures include the sport fishery allocations and management measures for Area 2A. These actions are intended to conserve Pacific halibut, provide angler opportunity where available, and minimize bycatch of overfished groundfish species.



TUF Says It’s In the Market To Acquire More Western Seafood Brands
SEAFOODNEWS.COM [Financial Times] by Michael Peel – February 2, 2015
Thai Union Frozen Products plans to reel in more western seafood brands in the latest phase of the expanding global voyage of the Southeast Asian country’s ambitious consumer industries.

The Bangkok-based shrimp-to-smoked salmon group aims to woo more company owners who want out of the fragmented US and European processed fish markets, where it snapped up companies spread from the California coast to the fiords of Norway during an acquisition spree last year.Thai Union’s aggressive strategy has made it a leader in a class of Thai consumer companies that started out as family-owned enterprises but are increasingly multinational in their hunger for new markets. The company hit the headlines in Europe last week with the news that Dejphon Chansiri, part of its founding family, was to buy UK football club Sheffield Wednesday — though Thai Union said it had no institutional involvement in the deal.

“For us, in the developing economies, it’s just like the beginning of the industry here,” says Thiraphong Chansiri, Thai Union’s president, whose father Kraisorn founded the business in 1977 after immigrating earlier from China. “But…we see less and less interest or commitment on the other side of the world. Therefore, we are in the right place to consolidate the industry.”

Thai Union’s internationalisation has been lower profile than the growth of consumer groups such as Thai Beverage and Charoen Pokphand Group, which last week announced it would form a joint venture with Itochu of Japan to buy a $10.4bn stake in Citic, the Chinese state-owned conglomerate.

But the quieter development overseen by Mr Thiraphong and his father has seen Thai Union buy well-known canned fish brands such as Chicken of the Sea in the US and the UK’s John West, as well as pick up supply contracts for western retailers including Walmart and Costco Wholesale.

Thai Union stepped up the pace by announcing three acquisitions during the second half of last year: Norway’s King Oscar, MerAlliance of France and — for $1.5bn and subject to competition authorities’ approval — Bumble Bee Seafoods of the US.

Almost half of Thai Union’s sales are from canned tuna, with the rest accounted for by shrimp, salmon, sardines and mackerel, pet foods and ready meals. Its production facilities are scattered from Portugal to Papua New Guinea and from Ghana to the US state of Georgia.

Mr Thiraphong says he expects further overseas acquisitions to account for roughly half the 15 per cent annual sales growth the company now needs to move from an expected $5bn post-Bumble Bee to its target of $8bn by 2020.

He argues that there are plenty of pickings among western companies owned either by finance businesses looking to exit, or third-generation directors who want to sell family companies founded by their grandparents.

Mr Thiraphong says Thai Union’s push for geographic diversification, brand names and higher-value products such as smoked salmon and pre-prepared meals will help overcome two problems dogging his “not…sexy” industry — low margins, and local volatility of prices because of weather and other factors, such as a plague that has ravaged the Thai shrimp industry over the past few years.

One of Bumble Bee’s attractions is that its gross profit margins are several percentage points higher than Thai Union’s 16-17 per cent.

“We acquire the brands, and [we are] also trading up to premium products,” says Mr Thiraphong, pointing to King Oscar’s “upscale” sardines, which he says sell for at least three times more in the US than their value rivals. “That’s how we’re going to enhance our margin.”

Investors rewarded Thai Union with a 37 per cent share price rise in the five months to December, part of which reflected a market surge after May’s military coup. Mr Thirapong says Thai Union plans to raise capital to fund more acquisitions and bring down a debt to equity ratio that he estimated would double to about 1.7 with the Bumble Bee purchase.

Analysts say Thai Union’s core approach looks sound, although some raise concerns that — like any strategic buyer — it may sometimes spend too much. The Bumble Bee price was 50 per cent more than the $980m that Lion Capital, the current owner, sought in late 2010.

“[Thai Union] is good in terms of picking up new acquisitions,” says Ploenjai Jirajarus, a food and agriculture analyst at Capital Nomura Securities. “But sometimes it has to pay a bit high.”

Another concern is that by growing so fast through acquisition the company might yet become another unwieldy bolted-together conglomerate — although Mr Thiraphong says a tight focus on the six existing seafood-based products should prevent that.

Marcin Spiewak, a senior consumer analyst at Asia Plus Securities, says the company’s “good track record” on acquisitions so far doesn’t remove the danger of it “becoming just large and inefficient” — but adds this is a “conceptual risk” rather than something happening now.

Another uncertainty is the impact of growing pressure on companies across the seafood industry, particularly in Asia, over working conditions, the sustainability of fish stocks and the environmental impact of marine farming.
Thai Union says it audits its supply chain to ensure labour standards are maintained — a particularly sensitive subject in Thailand, since the US downgraded the country last year to the bottom tier of its annual report on human trafficking.

Thai Union’s centre of gravity has already moved sharply since it began life as a tuna cannery in the coastal province of Samut Sakhon, southwest of Bangkok. Although Mr Thiraphong will not name his next targets, it is clear that the company will continue to shift from selling to western companies to buying them out.

“That was an advantage of [Thai Union] being a key supplier for global seafood items,” says Charti Phrawphraikul, a food and consumer analyst at Phatra Securities. “They have been able to use that as a base to grow and consolidate the industry.”

Ann Owens
Pacific Seafood Processors Association
Office Manager
1900 W Emerson Place Suite 205, Seattle, WA 98119
Phone: 206.281.1667
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February 3, 2015