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QINGDAO, China: Integrated seafood company Pacific Andes International is positioning itself to ride the next big wave, which it believes will come from the South Pacific Ocean.
Its new flagship factory vessel will go into operation next month, and this is expected to help raise the profit margins at its fishery business to as high as 50 per cent, up from 35 per cent.
Workmen are busy putting the finishing touches to the US$100 million vessel, named the Lafayette.
It is Pacific Andes' latest version of a mothership - a floating fish factory, touted as the world's biggest in its class.
The vessel is set to sail to the South Pacific Ocean at the end of the month, and its target is to catch 300,00 tonnes of fish - the equivalent of twice what Hong Kong consumes in a year.
Designed to stay out at sea all year around, it will be supported by five super-trawlers and seven catcher vessels that will pump the live catch into the Lafayette for processing.
The vessel is able to freeze 1,500 tonnes a day, and the fishes will then forwarded directly to their destination.
Ng Joo Siang, managing director of Pacific Andes International, said: "With our traditional fishing business, we have EBITDA of 35 to 40 per cent, that the margin and our net profit margin is way exceeding 20 per cent.
"So with Lafayette, which is more efficient that other fleet that we have, we believe that with this higher revenue and higher profitability, we should be able to provide good return to our shareholders."
Also helping to boost the Hong Kong-listed company's bottomline is its new processing plant in Qingdao.
The new facility is able to handle 60,000 tonnes of fish fillet annually, and its efficiencies has reduced cost of sales by up to 15 per cent.
Pacific Andes made a name for itself by supplying a then-little known white fish – the Alaskan Pollock. Today, the fish is widely used by fast-food chains such as McDonald's.
The South Pacific venture offers two new lines of growth – Peruvian anchovies and Chilean jack mackerel. The latter will be targeted specifically at the African market.
"We have decided as a company to expand heavily into Africa, we want to have a pan-African distribution concept," said Ng.
"We believe this continent will have great growth potential, greater than even China, so that's an area we're targeting. Eventually, we hope that in five years' time, China and Africa can be equally important to us."
Pacific Andes today holds a 15 per cent share of the total imported Chinese fish market.
- CNA/yb
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