Premier Fishing is the largest black-owned and -controlled fishing Company in the South African fishing industry and has been in existence since 1952. Premier Fishing has four operating divisions, two subsidiary companies and a number of joint venture operations. Premier Fishing is a vertically integrated Group which specialises in the harvesting, processing and marketing of fish and fish-related products.
Premier Fishing and its subsidiaries hold medium- to long-term fishing rights in west coast rock lobster, south coast rock lobster, small pelagics (anchovy and sardine), hake deep-sea trawl, hake longline, tuna, seaweed and squid. In addition, Premier Fishing owns an abalone farm and invests in organic agriculture through the Seagro range of products.
2016 OPERATIONAL PERFORMANCE
During the current year, Premier Fishing’s four main operating divisions delivered excellent growth in revenue and operating earnings.
Despite low economic growth, the Premier Fishing Group’s performance was ahead of budgeted expectations by 40%. Excellent results for the period was achieved through an efficient cost-base structure, improved performance across the divisions, cost containment initiatives and good catch rates. This resulted in good pricing achieved for products, positive revenue growth from the prior year as well as increased net profit compared to the prior year.
The Abalone division has once again returned strong sustainable revenues as well as improved net earnings year on year. Good growth rates were experienced on the farm in line with Premier Fishing’s management’s expectations. The market demand for the product remains strong and good pricing was achieved due to the current sales mix.
VISION 2020 VISION – PREMIER FISHING’S CONTRIBUTION
A detailed analysis of Premier Fishing was done in 2015 with the primary objective of having focused and aligned efforts across their business to deliver on their long-term goals. A five-year strategic plan to the year 2020 was implemented with clear deliverables, strategic actions for each strategic lever as well as detailing clear time frames.
Premier Fishing is on target to achieve its Vision 2020 Vision goals. Their financial target is to exceed R700m in revenue and R100m in EBITDA by 2020.
2016 Achievements to date include:
- Completion of the live packing facility;
- Growth of outside quota holders in both lobster and wild abalone;
- Installation of phase 1 of renewable energy;
- Enhanced planning to increase catch rates;
- Efficient cost base;
- Increased enterprise initiatives by assisting small businesses to grow and add value to their communities; and
- Delivered sustainable returns to shareholders.
PROSPECTS AND FUTURE OUTLOOK
Premier Fishing is well positioned for growth over the next three years to unlock shareholder value and to raise capital to invest into the future of the business. Premier Fishing is committed to further improving operating efficiencies and profitability.
Premier Fishing’s trusted brands and high-quality products and services have been developed over many years and remain sought after by their customers.
Going forward, Premier Fishing will focus on the following prospects through either organic or acquisitive growth in reaching their Vision 2020 Vision goals:
- Expansion of the abalone farm through a phased approach once the Environmental Impact Assessment has been completed, commencing with phase 1 in 2017;
- Further installation of renewable energy through a phased approach;
- Acquisition of small- to medium-sized fishing companies;
- Farming their own mussels and oysters;
- Construct/acquire a processing facility;
- Construct/acquire a canning factory;
- Continuous growth of outside quota holders;
- Explore other growth opportunities present in the market;
- Product diversification to further penetrate foreign markets; and
- Procurement of fish species for local and international markets and enhance marketing capacity.
Premier Fishing’s existing fishing quotas are a key component of its business and securing and growing their fishing quotas is the main focus in the short to long term. Premier Fishing’s west coast rock lobster fishing rights were up for renewal in November/December 2015 and they await the outcome of these applications. The south coast rock lobster, small pelagic and hake fishing rights are up for renewal in the year 2020.
There has been a focus on aquaculture in the fishing industry in order to increase output of fish stocks and ensure sustainability of the resource. Premier Fishing has recognised this opportunity and invested in abalone farming and is currently planning on increasing its production capacity at its abalone farm. Phase 1 of the new abalone farm development will commence in the 2017 financial year. Premier Fishing has also identified an opportunity to invest in Mussel and Oyster farming. This will ensure further sustainability in terms of earnings and profits.
Premier Fishing has aligned its business model to ensure that its business structure, processes and objectives are aligned to the requirements of performance targets for the fishing quotas as set out by the Department of Agriculture, Forestry and Fisheries.
Premier Fishing has operations in Port Nolloth, Northern Cape, Humansdorp, Saldanha Bay, Hout Bay and Gansbaai, the USA, Asia, Europe and the United Arab Emirates.
Through their various business activities Premier Fishing offers the following products and services: sales, marketing and production of west coast rock lobster, south coast rock lobster, abalone, small pelagics, canned fish products, longline line hake, squid and Seagro (organic fertiliser).
Detailed information about Premier Fishing’s business model, stakeholders, risks and governance is available on the website at www.aeei.co.za.
Premier Fishing product portfolio
- Lobster – They catch, process and market two types of lobster species, viz. west coast and south coast rock lobster. Their lobster is marketed through its widely recognised South Atlantic Lobster brand across many countries and is sold to the USA and Europe and their west coast rock lobster is sold into Asia, Europe, USA and South Africa. They have contracts with independent rights holders to market their west coast rock lobster. They operate four south coast vessels and two west coast vessels. All their facilities are HACCP and FDA approved.
- Abalone – They have an abalone farm situated in Gansbaai. Live, dried, wild and canned abalone is marketed to the Asian market through their widely recognised Atlantic Abalone brand.
- Small pelagic – Their small pelagic fish (anchovy and pilchards) is sold to canning and fishmeal factories situated in local communities. They operate a fleet of three vessels in this sector.
- Squid – Their squid is marketed through their widely recognised Sea Diamond brand. They are suppliers of frozen squid to the European markets. They operate three squid vessels and also have a joint operation in this sector with an independent rights holder.
- Hake – They have a joint venture operation with an independent rights holder in this sector and their hake is sold to the European markets.
- Organic fertiliser – They produce and market organic liquid fertiliser, which is made from fish oil. The organic fertiliser is marketed under the Seagro brand and is sold in retail outlets throughout South Africa and the United Arab Emirates.
Premier Fishing is a vertically integrated fishing and predominately a commercial fishing, fish processing and marketing Company. The revenue of the Premier Fishing Group is generated from the sales of west coast rock lobster, south coast rock lobster, small pelagics, hake, squid and abalone and also from their cold storage facilities.
The Premier Fishing Group’s aim is to catch all of its fish in an environmentally friendly method as well as a cost-effective manner. In line with this, they developed strong brands across all of its products and built solid relationships with its customers in Asia (China, Japan, Vietnam and Taiwan), Spain and the USA. In doing so, the Premier Fishing Group has developed sustainable profits through efficient cost management and good marketing strategies.
The Premier Fishing Group continues to develop partnerships with small companies, particularly in the west coast rock lobster and wild abalone sectors, which it assists by giving business advice to run their businesses sustainably as well as profitably. This is in line with the Premier Fishing Group’s principle of developing smaller marginalised-owned companies as well as in investing back into the communities from which it operates within.
The Premier Fishing Group continues to:
- implement innovative procedures within the value chain to increase efficiency in line with environmental best practices, thereby reducing their carbon footprint;
- invest in reliable technology which allows the Company to reduce mortalities for live lobster kept for the export market, therefore assisting in obtaining the best market price;
- develop all of their employees;
- assist small businesses to grow and achieve their full potential; and
- ultimately deliver good sustainable returns to all of their stakeholders.
Through the application of policies and structures implemented within the AEEI Group, Premier Fishing complies with all sound governance and regulatory functions and has had no reported fraud or deviations in the application of these principles in the current period. Key employees are also provided with regular training on the ever-changing regulatory environment to ensure that all staff are fully informed and that the Premier Fishing Group adheres to all the regulations and laws pertaining to their business operations.
STRATEGIC PLANNING AND MONITORING
Premier Fishing manages its businesses strategically, following a process that includes an annual review of past performance, product basket, capacity, markets as well as a review of the internal and external environments. This review is followed by the setting of strategies, targets and action plans, aimed at both growth and sustainability in the short to long term.
As part of its strategy, Premier Fishing also empowers communities in which it operates. This is achieved through the transfer of skills and technical knowledge in terms of devising catch and marketing plans to smaller, black-owned fishing companies and small-scale fishers. They promote preferential procurement from small, black-owned companies.
The Board of each business unit in Premier Fishing has an approved formal delegated authority schedule, which informs executive management of the necessary levels of approval for all key business transactions. In this way the Premier Fishing Group ensures that there is a senior manager or the Board itself reviewing each key business transaction/initiative to ensure that key business activities are aligned with the Premier Fishing Group’s strategy, is lawful, contributes to the Company’s sustainability and will not be harmful to any stakeholders and/or the environment.
In this manner, each business unit can monitor its financial performance against its strategies and evaluate this against the key performance areas of management and key employees. Through this process the sustainability of operations are ensured.
Premier Fishing aims to deliver good and sustainable returns to all of its stakeholders. They have defined a number of targets to measure their performance. They continually monitor their progress against these targets and, when necessary, revise them to take into account changes in the business environment.
As a predominantly fishing business, the strategic plan for the short and long term incorporates sustainable usage of its resources. This is an important aspect that is discussed internally as well as in the industry that they operate within, as they deal with natural resources.
To meet the objective of sustainable resources, Premier Fishing is:
- committed to the best local and international fishing practices;
- supportive of various stakeholders involved in the proper management of marine resources;
- supportive of regulatory policies to manage the marine resources;
- implementing plans and strategies to ensure that it maintains its fishing rights;
- committed to improving energy efficiency through renewable solar technology and reducing consumption of non-renewable energy and carbon reduction; and
- committed to improving water and electricity usage and consumption.
The Premier Fishing Group subscribes to a sustainable approach in conducting its business.
For Premier Fishing, corporate citizenship goes beyond legislative compliance and profits. It recognises the rights and responsibilities of businesses within a broader societal context and reinforces the aim of Premier Fishing to implement a social contract between business, government and civil society.
Premier Fishing is well aware of the critical role that business has to play in the upliftment and development of the previously disadvantaged majority. A task of this magnitude will, for a substantial period of time, be beyond the scope of state resources alone.
It is for this reason that Premier Fishing needs to give back to the communities in which they operate. To this end, they also believe in assisting small businesses to grow and achieve their full potential in the communities from which they operate by:
- providing small enterprises with the opportunities to engage with Premier Fishing’s factory, administration, finance and operational divisions for skills development, training and support;
- assisting with finance for start up of businesses;
- ensuring the availability of services by assisting with the development and growth of previously disadvantaged partners; and
- imparting skills and resources with small business partners to improve business management capacity.
The Premier Fishing Group continues to create a working environment that develops and empowers its employees as well as recognises the contributions of each team player in pursuit of excellent performance and continue to maintain a safe working environment for all.
The Premier Fishing Group also recognises the importance of the communities in which it operates from and therefore aims to develop the communities through their continued employment, procurement and enterprise and technical development.
The Premier Fishing Group is actively involved in various corporate social initiatives in the West Coast and Overberg regions.
KEY CHALLENGES AND RISK MANAGEMENT
Premier Fishing maintains a risk register, which is compiled and maintained by the executive management, with the risk status and execution of planned actions being reviewed monthly. Executive management is responsible for the identification, classification and management of all operational risks.
The challenges and business risks facing the Premier Fishing Group’s ability to sustain itself in the future as well as the mitigation against those risks, are noted below:
Premier Fishing recognises the importance of constant engagement with stakeholders. The principal stakeholders for the Premier Fishing Group are shareholders, employees, customers, suppliers, regulatory authorities, trade unions, government and local communities.
Premier Fishing has various procedures in place with regard to stakeholder management. These are summarised as follows:
Premier Fishing aims to be a competitive and attractive employer in the marketplace. Remuneration and benefits are important drivers, as are career opportunities, personal development, culture and values, leadership, Company performance and reputation. As stated in the Code of Conduct, Premier Fishing complies with applicable laws, agreements and industry standards on working hours and compensation.
Premier Fishing has various incentive schemes in place in order to retain talented and experienced staff. Premier Fishing’s policy requires all staff to belong to their pension or provident fund in order to plan for their retirement and medical insurance is compulsory.