‘Teslas’ versus ‘gas engines’: Will salmon farmershave to invest in land-based to keep up?

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Undercurrent News‘ most recent webinar yielded some interesting debate on how soon, if at all, land-based salmon farming will hurt the competitiveness of traditionally grown fish.

Experts from the world of seafood mergers and acquisitions (M&A) were split on whether salmon aquaculture companies should be worried about the rise of rms like Atlantic Sapphire in the US.

“The smaller players — how are they going to manage to compete with the land-based players, for example, in the US?” Asked Ignacio Kleiman of Antarctica Advisors, aiming his question at peers based in Iceland and Norway.

“I can understand how the large Norwegian [companies] can, but how are smaller players going to compete? Because they probably have much higher costs than the land-based players, at least in the US.”

Magnus Bjarnason, of Iceland’s MAR Advisors, was not too worried, noting that farmed salmon was a global commodity market and that everybody competes with each other already. He also pointed out that there might be some consolidation in Norway among smaller farmers which have  felt “vulnerable” during the coronavirus pandemic, perhaps prompting more cooperation as seen with Salmon Group, a network of family-owned aquaculture companies.

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Downstream, input sectors set to be focus of seafood M&A in 2021

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With retail sales booming, processing consolidation will likely form the cornerstone of this year’s mergers and acquisitions (M&A) business, a trio of advisors told Undercurrent News.

Existing sector players, outside investors and alternative proteins are all likely to be pursuing closer retail access in the post-pandemic market, the M&A experts said.

When it comes to the processing sector, it’s here that you see the most fragmentation and the most family-owned businesses, according to Rabobank analyst Gorjan Nikolik. Combined with the

loss of demand for whole fish, that makes it an area ripe for consolidation.

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Lack of ‘confidence’ in China Fishery sale process behind creditor-led option

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Two large hedge funds that purchased a sizable portion of the outstanding debt owed by China Fishery Group (CFG) are among those pushing for a creditor-led takeover of the bankrupt Peruvian fishmeal and fish oil producer due to dissatisfaction with the ongoing sale process.

The US funds — Davidson Kempner Capital Management and Monarch Alternative Capital — are leaders among a group of seven senior creditors known as the ‘ad hoc group’ (AHG) that are proposing an alternative resolution to the five-year-old bankruptcy case.

Instead of selling off CFG to a seafood company or investment fund as trustee William Brandt has long proposed, the ad hoc group’s debt-for-equity swap plan would see senior creditors lead CFG out of bankruptcy, operate it for an undetermined period and only then prepare for its eventual transfer in a sale or initial public offering process, sources told Undercurrent News.

Brandt “has been trying to sell the business for going on four years and hasn’t been successful to date. There’s a limit to people’s patience”, a source familiar with the AHG plan told Undercurrent.

CFG is widely seen as the most profitable asset of Hong Kong’s Pacific Andes International Holdings (PAIH), once the world’s 12th-largest seafood company by sales. In late 2016, several large banks that had lent to PAIH and CFG told a US bankruptcy court that they had found over $1 billion in “questionable transactions” and “substantial” fabrications of revenue and payments on the company’s books.

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