Incorporated in 1918, Oceana is the largest fishing company in South Africa with 6,053 employees and revenues of R6.17 billion. Its core business is catching, processing, marketing and distributing canned fish, fishmeal, fish oil, lobster, horse mackerel, squid and hake. Oceana markets and sells fish and fish products to consumers in Africa, U.S., Asia, EU and Australia. Sales in South Africa and Namibia constitute 64 percent of its revenue.
SeafoodSource: How have the political changes in South Africa over the last 20 years effected Oceana and how the company does business?
Kuttel: We realized that the company had to transform itself and we’ve gone through this transformation earnestly. Back in 1994 only 1 percent of fishing rights were owned by black people. In 2006, Oceana brought in a black empowerment investment firm and established an ownership scheme for black employees whereby they acquired 10 percent of the company via a trust. Some 2,600 black employees are now shareholders and this trust has been incredibly successful. To help empower black people, the South African Government issued a Black Economic Empowerment (BEE) scorecard so that companies could rate their transformation. For two years in a row we’ve been the most empowered company in South Africa.
SeafoodSource: In May Oceana acquired Daybrook Fisheries and 25 percent of Westbank LLC in the United States. How does this move fit in with your overall business strategy for the company?
Kuttel: Part of our strategy is to be as diversified as possible, in order to mitigate the risks of cyclicality. We will continue to build our presence in South Africa but are also committed to global expansion. Through this acquisition of Daybrook Fisheries, a producer of fishmeal, we are shipping product within America and to China, as well as sending fish oil to Norway, Denmark and Germany.
SeafoodSource: What would you consider your biggest business challenge thus far, and what did you learn from that experience?
Kuttel: Two years ago we had a difference of understanding with our regulators about ownership of fishing rights versus ownership of the market. We were trying to acquire a business that had processing canneries, vessels as well as a pilchard quota. We already owned 15 percent of this South African resource and production capability through our canned pilchard brand, Lucky Star, and through this attempted acquisition we tried to acquire additional capacity. We didn’t think it was anti-competitive but the regulators did, and as a result we had to go to appeals court, where we eventually won. We acquired the fishing assets of FoodCorp in Feb. 2015.
SeafoodSource: What has impacted the market for affordable seafood proteins in Africa in the past year?
Kuttel: The strength of the dollar relative to currencies across Africa has had an unsettling effect because most of the products we procure are priced in dollars. That’s affected Africans’ ability to pay. Linked to it is oil price. The drop in the oil price has reduced the consumer buying power in Nigeria and Angola. On the frozen pelagic side, it’s a commodity business priced in dollars or Euros. We’re competing with fish priced in dollars or Euros.
SeafoodSource: If there were one thing you could change about the seafood industry as a whole, especially as it relates to your ability to run a successful business, what would it be?
Kuttel: The instability caused by fishing quotas in South Africa and Namibia, which varies from 7-15 years, hinders our ability to make long term capital decisions. I understand why they choose to go through the tendering process, but it does present challenges and it makes it difficult to get capital payback. It means that most companies will go into a capital investment freeze for the latter part of their fishing rights. I’d prefer a 90Q system, a permanent fishing right that’s transferred.
SeafoodSource: Given the opportunity to address a room filled with seafood industry leaders such as yourself, what is the one nugget of wisdom you would offer them as your closing remark?
Kuttel: Think long term. This industry has been around for centuries and we did ourselves a lot of damage in the late 1950s-1980s by thinking short term. We need to think long term on how we run this business and we need to consider, are we really structuring this business for long term sustainability? It’s a message to governments as much as one to industry leaders.
SeafoodSource: What kind of legacy do you plan to leave at Oceana when you step down?
Kuttel: It’s fascinating for me, having started my life as a processor in Alaska, to sit at the top of this organization and see how a company this size can have a beneficial effect on its employees and stakeholders as it does. I’ve been here 7 years and this company was successful long before I arrived. My job has been about charting a path of growth for Oceana. Allied to that is what we’ve done with our employees and the communities in which we operate, and how we’ve managed to uplift those areas. This process has taught me how working in the manner we have improves the efficiency of the business. I’d like to leave a bigger business, one that’s as successful, and one that’s filling the mantra we gave it: to convert fishing rights into shared value.
