Sea Harvest goes fishing for cheese
FISHERIES group Sea Harvest, through subsidiary Cape Harvest Food, has branched into the dairy industry with its acquisition of cheese, milk powder and dairy producer Ladismith Cheese for R527 million in cash.
Sea Harvest yesterday posted lacklustre results for the six months to June, reporting a revenue decline of 5% to R1 billion, compared with R1.1bn at the same time a year ago.
It attributed the decline to a 5% reduction in total allowable catch (TAC) in South Africa, the delayed start to the prawn fishing season in Australia and funding of acquisitions.
Group chief executive officer Felix Ratheb said the acquisition strategy they had adopted would hopefully deliver positive results.
“The Harvest Mzansi joined our fleet in April this year, and our factory optimisation project concludes in Q4. These initiatives should assist us in delivering margin enhancement,” he said.
Of the diversification into the dairy industry through Ladismith Cheese, the group said it believed the industry was set for further prospects as growing demand for cheese and butter was in response to consumer dietary changes towards natural fat products.
“Ladismith Cheese exhibits strong fundamentals. It is a profitable, branded, fast-moving consumer goods food manufacturer of significant scale in the food and agricultural sector,” Ratheb said.
The group said the acquisition provided Sea Harvest with an ideal platform to build on in the dairy sector through the development and acquisition of additional dairy and allied beverage products.
Senior agricultural economist at Absa, Wessel Lemmer, said the acquisition seemed to be based on the company’s strategy to grow their business in related sectors in the food market. “They performed slightly poorer this year compared to the previous year,” he said.
Established in 1999, Ladismith Cheese is a value-adding dairy processing company based in Ladismith in the Western Cape. Its primary business is the production, distribution, marketing and sale of cheese, butter and milk powders to the South African retail and wholesale markets.