Sanford may soon sell its Tauranga pelagic business
New Zealand-based seafood company Sanford says it has entered into a conditional agreement to sell its Tauranga pelagic business to local company Pelco NZ Ltd.
Assets to be included in the potential sale include three purse seine fishing vessels, processing equipment, and pelagic quota in Fisheries Management Area 1, Sanford said in a 19 November press release. The deal would see Sanford’s overall quota holding under New Zealand’s Quota Management System fall from 22 percent to approximately 19 percent of the total volume available for commercial catch, according to the company.
Both Sanford and Pelco are working together to minimize the possible impact to the number of jobs in Tauranga that may fluctuate as a result of the transaction, Sanford CEO Volker Kuntzsch said.
“We know that if the assets are transferred, Pelco will be looking to hire staff or contract fishers who can support the business. This is a significant consideration for us, as is our view that Pelco is a well-run family company with values similar to ours. We have dealt with them for many years and have always found them to operate with utmost integrity,” Kuntzsch said.
A sale of its pelagic business would align with Sanford’s strategy of focusing on value, Kuntzsch added.
“Strategically, we are concentrating on areas that lend themselves to consumer-centric innovation and branding, while Pelco will benefit from economies of scale. We believe that if this deal goes ahead, it will create more value for both companies and New Zealand as a whole. It then frees up capital to allow us to invest in areas that are a stronger strategic fit,” he said.
For Pelco, the potential acquisition could stand to benefit not just the company, but also the Bay of Plenty economy and New Zealand’s commercial fishing industry at large.
“We are a pelagic focused team and this is a great opportunity for us to grow,” Andy Rolleston, Pelco’s founder and managing director, said. “If this sale is agreed, we’re confident we’ll be able to do that while fishing sustainably, which is very important to us and Sanford. We have worked with them for many years and know their people well. If the sale is confirmed, we would hope to have positions to offer and would like to be able to welcome former Sanford staff who share our values.”
An announcement confirming the sale or otherwise is expected in a matter of weeks, the companies said.
News regarding the possible sale of its Tauranga pelagic business comes just after Sanford posted its annual earnings report, which showed a net profit after tax for the company of NZD 42.3 million (USD 28.9 million, EUR 25.4 million), a 12.9 percent improvement over 2017. Sanford also saw its adjusted earnings before interest and tax (adjusted EBIT) increase by 1.5 percent to NZD 64.7 million (USD 44.3 million, EUR 38.8 million) in 2018.
The company also announced the death of a crewmember, Steffan Antony Stewart, who died aboard one of Sanford’s deepwater factory vessel, San Granit, on 14 November. Stewart’s death is currently being investigated by New Zealand's Transport Accident Investigation Commission.
Image courtesy of Sanford