Sanford well placed after aquaculture investments

Sanford says it has a strong position in aquaculture after buying Pacifica Seafoods and two initiatives with partners will help the industry grow.

Sanford's acquisition of Pacifica Seafoods' Greenshell and Pacific Oyster business for $85 million last year combined the two biggest industry participants.

Chairman Bruce Cole said aquaculture was an important complement to the company's wild fishing interests.

Managing director Eric Barratt outlined two developments in aquaculture for which the company soon expects government approval.

The first was a plan to domesticate and selectively breed New Zealand shellfish, particularly greenshell mussels, in partnership with Sealord, Wakatu Incorporation and the Government.

Sanford will invest $13 million in a seven-year programme to develop a hatchery and life-cycle breeding families to supply spat on a commercial basis to the industry. The mussel industry now uses wild caught spat.

Sanford will also invest $9 million over six years in a primary growth partnership with Sealord and Aotearoa Fisheries that will more selectively harvest desired species and sizes.

"The successful outcome of these two projects will result in a significant enhancement to the value of our products and provide a very significant return on investment over a long period of time," Barratt said.

He said it was likely that the company would again see a stronger performance in the second half of the year, taking into account the closure of the Havelock plant for the first three months and only four months of the Pacifica acquisition through to the end of March. Cole assured shareholders the board had considered debt before buying Pacifica.

"Pressure is now on board and management to achieve agreed debt reduction programmes as well as critically assessing the real relevance to Sanford's future and earnings of some existing long-term assets and activities."

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