Both oars in the water
All eyes are on the new CEO as Africa’s largest fishing group navigates choppy seas
When a financial director steps into the role of CEO, there is usually a well-grounded suspicion that the firm’s strategic focus will rapidly turn inwards. Belts will be tightened to bolster cash flows, acquisitive tilts abandoned to build up margins, operations “right-sized” for efficiencies, and noncore assets hived off so that management can focus on the most profitable assets.
That said, the recent — and well-deserved — elevation of Imraan Soomra from FD to CEO of Africa’s largest fishing group, Oceana, won’t have shareholders rushing for the lifeboats for fear of a wave of operational consolidation.
Soomra is seen as a capable hand on the tiller. An executive of a rival fishing company says Soomra is a strong implementer who worked well with former CEO Francois Kuttel (now the owner of the majority stake in Oceana’s fishing partner in the US). “He learnt the fishing business very quickly, and always had [Kuttel’s] back. He is as hard as nails when it comes to business … I’ve seen that personally.”
A focus on cash flows, margins and streamlining Oceana’s operating structure is a given in tricky trading conditions. But Soomra remains intent on looking expansively in international waters.
What is also apparent is the dogged determination to eke out organic growth from the SA operations, which span pilchard canning, hake, horse mackerel, squid, west coast lobster and cold-storage services.
In an interview last week, Soomra stressed that there are no plans to steer the business in a dramatic new direction.
So, realistically, it would be safe to bet on Oceana pursuing more selective offshore acquisitions to complement its promising Daybrook Fisheries fishmeal and fish oil operation in the US state of Louisiana.
These will include attempts to snag fishing assets that are not restricted or influenced by quotas. So it should not be too long before Oceana drops a line into the well-diversified aquaculture sector — most likely pitching for an established cash-generative business before casting out for more fledgling operations.
Soomra, though, will need to be vigilant at the wheel as Oceana trawls in increasingly difficult SA waters.
The key challenge locally is the upcoming 2020 long-term fishing rights allocation process. Talk around the docks is that the department of agriculture, forestry & fisheries is determined to spread quotas among newer — and smaller — players.
Soomra believes that though Oceana is the “big fish” in local waters, there is a compelling case for the group retaining its fishing rights.
Industry observers are adamant that when it comes to the larger commercial fishing enterprises, only the players with the strongest empowerment credentials are likely to emerge from the process without marked quota cuts.
Lately, a number of previously “whiteowned” fishing counters have sold controlling stakes to black-controlled companies. These include the Saldanha Group (Terrasan), Pioneer Fishing (Stephen Dondolo’s African Pioneer Group), Port Elizabeth-based squid specialist Talhado (African Equity Empowerment Investments-controlled Premier Fishing) and Viking Fishing (Brimstone-controlled Sea Harvest).
But Oceana’s local dealmaking efforts in recent years have betrayed some reluctance by authorities to fully credit the group’s empowerment efforts. Certain parts of the deals with Lusitania and Foodcorp’s fishing assets faced resistance or were blocked.
A serious perception problem is that household goods conglomerate Tiger Brands still holds a dominant 42% stake in Oceana. Though