Hitting the high-water mark

Two strong players are emerging to challenge Oceana’s dominance over the local fishing sector

The JSE’S net of fishing stocks is certainly not causing punters to bait their hooks with increased vigour.

While food sector stocks have proved popular with investors over the longer term, the fishing sector has traditionally been regarded as a higher-risk option. High operating costs (especially fuel), regulatory challenges, inclement weather and fickle fishing patterns can mess with catch rates. And then there’s the effect of inevitable currency swings on the revenue line.

Only market leader Oceana — a highly diversified fishing company — has enjoyed the operational balance needed to sail through choppy waters.

But recently listed fishing groups Premier Fishing & Brands (Premfish) and Sea Harvest have also acquitted themselves well in the face of these industry vagaries. Both have delivered in line with prelisting profit promises, but the real X-factor lies in their ability to hook into fishing opportunities as the tides in the SA fishing industry change.

Premfish and Sea Harvest are strongly empowered via their respective controlling shareholders, African Equity Empowerment Investments and Brimstone Investment Corp.

Empowerment is a key issue in local fishing, where government has set about transforming the sector by spreading ownership into black hands and community enterprises.

The 2020 allocation of long-term fishing rights will likely result in white-owned fishing giants like Oceana and AVI’S I&J losing some of their key quotas. Premfish and Sea Harvest — which have the potential to become blackowned SA fishing sector champions — will probably be beneficiaries of the 2020 process, allowing each to enter new sectors of the fishing segment.