C.F.C.A. poised to reap rewards

Press, 17 July 1979, Page 23

C.F.C.A. poised to reap rewards

Canterbury Fanner’s Co-operative Association, Ltd, of Timaru, has put a tremendous effort into its fishing interests in recent months. It has made all the right moves, and should soon begin to reap its just rewards.

During the current financial year, considerable re-organisation has taken place within Feron Seafoods, Ltd, itself,

In September the daily Christchurch fresh fish auction was closed as alterations to meet hygiene requirements would have been an unprofitable investment.

At the same time the company moved onto a fixe d-schedule buying price ex-fishermen, subject to amendment according to current market conditions.

In October, with the exception of the export office, the administration of the company was moved from Christchurch to Timaru, with a consequential change in executive personnel. In January a subsidiary company was formed of which Feron Seafoods, Ltd, owns 60 per cent, but which is entirely operated and administered in Christchurch. The 60 per cent equity was obtained by transferring the Feron Seafood assets at Jacksons Bay, Greymouth, Motunau, Akaroa. and Lyttelton plus

some cash to the new company, which is called Chatham and Feron (N.Z.), Ltd.

As the principal asset of the Chatham part of the new company was new premises in outer Christchurch, this made available two valuable central city properties, still owned by Feron Seafoods, Ltd, for sale. At the same time it allowed the residual Feron Seafood company to concentrate entirely on exports and joint-venture operations at the new Timaru factory. The Oamaru branch was also retained, as it is within easy administrative distance of Timaru, and is a source of valuable lobster supplies for world markets. Concurrent with this reorganisation during the present financial year, a 52.4 M expansion programme was embarked upon involving:— (1) Two 26 metre fishing vessels ex-Nether-lands, which arrived in New Zealand in May. (2) A 15 tonne-a-day-ca-

pacity ice plant, commissioned in early June. (3) A 600 tonne minus 25 degrees C holding store for increased production and jointventure operations which was completed in April. (4) 3 x 8 tonne-per-day capacity blast tunnels for increased production due for completion this month.

(5) A ships gear-store and radio room, also due for completion this month.

Not the least of the reasons for the expansion was encouragement from the Government by way of taxation incentives, investment allowances and suspensory loans. While most of the projects are nearing completion, little if any of the expected benefits have yet been received. At the same time interim capital costs have largely been financed by C.F.C.A., Ltd, with a corresponding increase in interest charges to its wholly-owned subsidiary Feron Seafoods, Ltd.

Also during the current year, approval was obtained from the New Zealand Government to enter into a joint-venture fishing agreement with Nichiro Gyogyo Kaisha, of Japan.

This is a no-risk investment as far as Feron Seafoods is concerned, and allows two large Japanese trawlers to catch 13,500 tonnes of trawlfish, and five squid vessel to catch 2050 tonnes of squid in the 1979-80 season. All products will be received by Feron Seafoods and export-packed for an agreed fee. In addition to this, 800 tonnes of suitable species must be made available to Feron Seafoods for further processing.

The marketing responsibility rests with Nichiro, but as one of the conditions is that the product must be sold to the best advantage on world markets, Feron Seafoods has the opportunity of selling in Europe at 5 per cent commission. The first of the Japanese trawlers, the 1000G.T. Sekishu-Maru was expected on June 12.

Bing Harris Samwha, Ltd, also have a Korean joint-venture based on Timaru. As they have no s h o r e-based facilities, Feron Seafoods has successfully tendered to pack their product, and the first 130 tonnes of squid was received in the week ending May 19, for shipment in June. As with Ferons’ own vessels which will increase the factory throughput from 1000 tonnes to 4000 tonnes a year, many of the benefits planned for are still just around the corner, and until such time that they become operational Feron Seafoods continues to have to carry a substantial overhead, which has increased considerably, to provide capital assets for the future.

The right steps have been taken during most adverse times, so it remains to be seen whether or not the marketing, processing and administrative abilities of the existing company structure can exploit the possibilities they have been given.