With financial challenges at the forefront of every business, one International Boston Seafood Show conference on Monday focused on helping businesses find and secure funding during difficult economic times. The seminar was titled "Finding Funding in Tough Economic Times."
Jason Myler of BB&T Capital Markets gave an equity and capital update, contrasting rapid market growth trends from 2003 to 2007, with the fallout beginning in early 2008. Despite a 50 percent stock market decline from January 2008 to 2009, S&P food companies, specifically in the protein sector, slightly outperformed the market at 35 percent. Seafood performance was in line with the overall market.
"While the sources of public equity capital have decreased, the silver lining is that private equity capital has been raised and is ready to be put to work," Myler said. The seafood industry has shown some interest, with larger companies like Connors Bros., Icicle Seafoods and Canadian Cove acquiring smaller companies.
John Doucette, senior VP of Sovereign Bank, talked about managing the credit crisis and improving business and bank relationships. "Banks are not closed for business, but it may not be business as usual. Sovereign continues to look for growth in the seafood industry, which has always provided a solid customer and client base for us."
Doucette offered tips for establishing a relationship with a bank: develop a good business plan, understand your company's needs and know the industry you're in "so your banker understands what your peaks and values are going to be."
Doucette offered an example of a U.S. importer bringing in seafood from China that needed to get a bulk of imports before the Chinese New Year and in time for Lent.
"Banks earn their reputation by working with customers during critical times," Doucette said.
Martin Ryan, president of RTS International, discussed accounts receivable financing, or factoring. "If you factor an invoice, you'll get the money the day we get the invoice, instead of getting the invoice 30 or 60 days later. So you're getting access to capital right away to help with your business," Ryan said."We started working in the seafood industry several years ago and it has been a growth niche and good industry for us," she said.
One client, a South American fish processor selling fish to the United States, didn't have the capital he needed to continue to grow and couldn't get the funding he needed."When he brought expenses under one roof by factoring, he funded invoices within 24 hours, increased production and bought a new processing plant," he said.
March 15, 2009
