Fishy busi­ness

Tuna can­ner sees good times ahead

Paradise - - In Paradise | Contents - – DAVID JAMES

Man­ag­ing the price of fish is the big­gest man­u­fac­tur­ing chal­lenge, ac­cord­ing to Erwin Or­tiz, gen­eral man­ager of RD Tuna Can­ners. He says the com­pany in­tends to in­crease its stor­age ca­pac­ity as part of its strat­egy to deal with price volatil­ity.

Or­tiz says 2017 was “a de­cent year” for the fish­ing group.

“We need to re­ally catch the free-school fish. That is why we have up­graded our fish­ing ves­sels. We were able to see the ben­e­fits.”

Or­tiz says the com­pany is now ver­ti­cally in­te­grated and does not need to buy fish from ex­ter­nal play­ers.

This has helped par­tially with for­eign ex­change chal­lenges.

“We have to pay in kina and the fish­ing com­pa­nies want US dol­lars. But now that our fleet is up­graded we all get our fish from our own fish­ing group.”

Or­tiz says there are two el­e­ments to man­age: the vol­ume and the price of the fish.

“In 2017, we im­proved on the vol­ume in the sec­ond half of the year be­cause of the new ves­sels,” he says.

But the price of fish, which is set in­ter­na­tion­ally, got very high.

Or­tiz says the av­er­age fish price last year swung in a 25–30 per cent range against 2016.

The price of fish greatly af­fects the com­pany’s profit mar­gins, he says. “You buy more fish when the price is low but when the price is up you have to be very care­ful.”

The way to deal with the volatil­ity is to use cold stor­age to in­crease the in­ven­tory.

“What we need to do is stock fish for three months. With that we can plan well, do for­ward book­ings ef­fec­tively and will be pro­tected from any changes of price.

“In 2019, we will be build­ing ad­di­tional cold stor­age in the man­u­fac­tur­ing com­pound.”

Seventy per cent of RD Tuna’s rev­enue comes from ex­ports, with the re­main­der sold to the do­mes­tic mar­ket.

Or­tiz says he is “very, very op­ti­mistic about the fu­ture,” not­ing that the up­grad­ing of the fish­ing fleet is pay­ing off.

“The re­bate given by the Na­tional Fish­ing Author­ity and the govern­ment to man­u­fac­tur­ers is very good,” he says.

“We have been in the busi­ness for 20 years. RD Tuna Can­ners is the pi­o­neer in tuna pro­cess­ing in Pa­pua New Guinea and we be­lieve, given the right sup­port from the Na­tional Govern­ment, do­ing busi­ness here is still prof­itable.”

In 2019, we will be build­ing ad­di­tional cold stor­age in the man­u­fac­tur­ing com­pound.

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