Maruha Nichiro acquires stake in Sanford

Published on
March 9, 2016

Japanese food group Maruha Nichiro Corp. acquired a 4.7 percent stake in Auckland, N.Z.-based Sanford, a large producer of farmed King salmon, mussels and oysters.

Maruha Nichiro, which owns Peter Pan Seafoods, Trans-Ocean Products and other major seafood processors, also recently reported a huge surge in its operating income of 52 percent to nearly 15 million yen (USD 13.3 million, EUR 12.1 million,) for its fiscal third quarter ending 31 December 2015.

On 4 March, Avalon Investment Trust, Sanford's second-biggest shareholder, sold 4.4 million shares to Maruha for NZD 25 million (USD 16.9 million , EUR 15.3 million), according to a substantial shareholder notice lodged with the NZX, National Business Review reported.

That acquisition price equates to NZD 5.70 (USD 3.84, EUR 3.49) a share, a signficant 10 percent below their current price of NZD 6.35 (USD 4.28, EUR 3.89), according to NBR.

Maruha's New Zealand operations include the Aleksey Slobodchikov fishing vessel.

Meanwhile, Sanford put its Pacific tuna fleet up for sale last fall.

The shrinking prices for skipjack tuna – which made up 5 percent of Sanford’s NZD 226 million (USD 144.7 million; EUR 127.3 million) in revenue – suffered a five-year low, convincing the company to exit the Pacific tuna trade.

"Continuing unsatisfactory returns driven by low prices and the strict commodity nature of skipjack tuna coupled with ever increasing access costs to the fishery, resulted in the decision to exit this business and offer the vessels for sale," Sanford chief executive Volker Kuntzsch said at the time.

Sanford experienced an 18 percent decline in first-half profits in May, as it tried to tackle falling prices for skipjack tuna, blue mackerel and other oily fish. The same timespan brought strong demand for deepwater fish and stable prices for greenshell mussels. However, the company was moved to write down the value of some of its vessel fleet by NZD 6 million (USD 3.8 million; EUR 3.3 million).

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