Recommended.co.nz | Guide2.co.nz | Voxy.co.nz | Gimme.co.nz
Homepage | login or create an account

Sanford wants to take over Pacifica processing

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, Sept 30 NZPA - Listed fisher Sanford says it wants to take over the Skeggs family's Pacifica Seafoods to obtain more mussel farming and processing capacity.

Auckland-based Sanford is seeking clearance from the Commerce Commission for the takeover of Pacifica Seafoods Group.

"Sanford currently has limited spare processing capacity, whereas Pacifica has substantial underused processing capacity," the company has told the Commerce Commission. Sanford has processing plants at Tauranga and Havelock, while Pacifica has a plant at Riccarton.

There was also potential for Sanford to cut costs through economies of scale, and introduce technologies successful at its own operations into the Pacifica group companies, it said.

Pacifica employs more than 350 people and exports to more than 30 countries, but about 40 percent of its mussels have been going to the USA and 30 percent to Asia.

Sanford and Pacifica, along with the nation's other three largest mussel-processing businesses, recently formed a joint company, Pure New Zealand Greenshell Mussels General Partners, to market mussels in China under a single brand, and Sanford and Pacifica each have a 25 percent stake in Shellfish Production and Technology New Zealand Ltd to develop hatcheries to produce mussel spat for cultivation.

Sanford is diversified across the three main aquaculture species, mussels; salmon; and Pacific oysters, but Pacifica is mainly concerned with mussels, though it has limited operations in salmon and oysters.

The overall industry is worth over $350 million, with mussels accounting for 86 percent of total aquaculture exports (by volume) and 77 percent by value.

A third of the mussel exports go to North America, and most of the rest to Asia, Europe, and Australia.

In July 2009 Sanford bought some of Sealord's Marlborough Sounds mussel farms -- including 240 hectares of waterspace and equipment for growing mussels and spat -- as Sealord switched attention to its holdings in Tasman Bay and the Coromandel.

Details of the number of hectares used to grow mussels for Sanford in the Marlborough Sounds, divisions between contract grower, share farmers and processor-owned farms, and what are of "farmed water" would be controlled by Sanford after the takeover were excised from the document released by the commission.

It noted the scope to compete for product from share farmers and contract growers was constrained by the cost of transport to a processing plant, and the international price of about $550/tonne for mussels in the shell.

Continuing commercial viability of all industry players depended on a "robust recovery" in the industry, which had been hit by a combination of the global financial crisis and a strong New Zealand dollar limiting the prices obtainable.

About guide2.co.nz : money

Find the latest money news and 'how to' guides on Guide2Money.

Ask our researchers your personal finance questions.

Your Questions. Independent Answers.