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Henning Beltestad - CEO Lerøy Seafood Group -Waiting for China, What to do in the meantime?

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Henning Beltestad, CEO Lerøy Seafood på Havbrukskonferansen 22. november 2011 på Radisson Blu Scandinavia i Oslo.

Henning Beltestad, CEO Lerøy Seafood på Havbrukskonferansen 22. november 2011 på Radisson Blu Scandinavia i Oslo.

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  • 1. Waiting for China,What to do in the meantime? Havbrukskonferansen 22 Nov 2011 Henning Beltestad Lerøy Seafood Group ASA CEO 1 1
  • 2. Agenda 1.1 Q3 Lerøy Seafood Group ASA 2.2 Supply and demand 3.3 Status China 4.4 Potential in Asia2 2
  • 3. Internal considerations Q3 2011All figures in NOK mill Q3 - 11 Q3 - 10 Change YTD Q3 2011 YTD Q3 2010 Change 2010Turnover 2 304 2 264 2% 6 926 6 314 10 % 8 888EBITDA 276 477 -42 % 1 293 1 204 7% 1 806EBIT bef adj biom 207 424 -51 % 1 093 1 047 4% 1 586PTP bef adj biom 190 431 -56 % 1 088 1 080 1% 1 623*) PTP = Pre-Tax Profit 3 3
  • 4. Rode Beheer B.V.•Urk, Netherlands•87 employees•Processing c.11.5’ GWT raw material, of which c.85% Atlantic salmon •Smoked/marinated •VAP/convenience •Fillets/MAP Tveitnesvik, Hardanger 4 4
  • 5. Lerøy Seafood Group - Global organization Norway The Netherlands Sweden Finland Scotland North America Japan France China Turkey PortugalFarmingProductionSales & Distribution 5 5
  • 6. Atlantic salmon – Supplyin tons WFE Change Change Change Change Change 2008 07-08 2009 08-09 2010 09-10 2011 10-11 2012 11-12 Norway 741 000 2,4 % 855 700 15,5 % 944 600 10,4 % 991 100 4,9 % 1 081 500 9,1 % UK 136 400 1,1 % 144 800 6,2 % 141 800 -2,1 % 154 900 9,2 % 154 200 -0,5 % Faroe Island 37 900 98,4 % 48 100 26,9 % 42 100 -12,5 % 56 700 34,7 % 63 500 12,0 % Ireland 11 400 -25,5 % 14 800 29,8 % 17 800 20,3 % 16 000 -10,1 % 16 000 0,0 % Total Europe 926 700 3,8 % 1 063 400 14,8 % 1 146 300 7,8 % 1 218 700 6,3 % 1 315 200 7,9 % Chile 403 500 13,2 % 239 100 -40,7 % 129 500 -45,8 % 216 100 66,9 % 313 100 44,9 % Canada 118 500 8,2 % 115 400 -2,6 % 118 000 2,3 % 110 300 -6,5 % 112 500 2,0 % Australia 25 700 8,0 % 32 200 25,3 % 33 000 2,5 % 36 000 9,1 % 37 000 2,8 % USA 17 000 38,2 % 16 400 -3,5 % 18 000 9,8 % 18 500 2,8 % 19 300 4,3 % All others 2 400 -38,5 % 1 700 -29,2 % 1 400 -17,6 % 2 100 50,0 % 3 200 52,4 % Total America 567 100 12,1 % 404 800 -28,6 % 299 900 -25,9 % 383 000 27,7 % 485 100 26,7 % Total World-wide 1 493 800 6,8 % 1 468 200 -1,7 % 1 446 200 -1,5 % 1 601 700 10,8 % 1 800 300 12,4 %Figures as per 27.10.11Source: Kontali 6 6
  • 7. Market development for Atlantic Salmon from NorwayYTD Q3 2010 vs YTD Q3 2011 TONS (WFE) TNOK Region 2010 YTD Q3 2011 YTD Q3 Chng % 2010 YTD AUG 2011 YTD AUG Chng % EU 434 102 449 256 3,5 % 14 284 628 14 509 666 1,6 % Others 93 642 107 614 14,9 % 3 065 667 3 323 158 8,4 % Russia 64 722 73 132 13,0 % 1 982 676 2 134 052 7,6 % USA 41 222 21 059 -48,9 % 1 716 833 906 932 -47,2 % Japan 20 296 22 713 11,9 % 752 208 872 236 16,0 % Totalt 653 985 673 775 3,0 % 21 802 013 21 746 045 -0,3 % (Volume in tons WFE, value in thousand NOK) ”Others” is specified on the following slide Figures as per 25.10.11 Source: NSEC/Lerøy 7 7
  • 8. Market development for Atlantic Salmon from NorwayYTD Q3 2010 vs YTD Q3 2011 TONS (WFE) TNOK Country 2010 YTD Q3 2011 YTD Q3 Chng % 2010 YTD Q3 2011 YTD Q3 Chng % HONG KONG 14 879 13 710 -7,9 % 566 632 463 814 -18,1 % UKRANIE 12 903 14 628 13,4 % 240 119 279 121 16,2 % VIETNAM 5 305 13 381 152,2 % 126 847 349 571 175,6 % ISRAEL 5 592 9 101 62,8 % 205 577 316 588 54,0 % TAIWAN 6 264 7 257 15,9 % 223 605 236 191 5,6 % SOUTH KOREA 5 259 6 876 30,8 % 196 613 249 060 26,7 % THAILAND 6 454 6 061 -6,1 % 208 398 185 534 -11,0 % CHINA 9 933 5 229 -47,4 % 346 731 154 732 -55,4 % SINGAPORE 3 520 4 157 18,1 % 134 237 146 930 9,5 % TURKEY 2 933 3 581 22,1 % 102 397 114 542 11,9 % SWITZERLAND 2 769 3 247 17,3 % 107 431 133 885 24,6 % FHILIPPINE 1 347 2 808 108,4 % 27 201 56 541 107,9 % BELARUS 2 412 2 434 0,9 % 57 841 62 871 8,7 % CANADA 1 667 2 320 39,1 % 74 106 109 333 47,5 % OTHER CONTRIES 12 405 12 824 3,4 % 447 933 464 443 3,7 % Total "Others" 93 642 107 614 14,9 % 3 065 667 3 323 158 8,4 % (Volume in tons WFE, value in thousand NOK) Figures as per 25.10.11 Source: NSEC/Lerøy 8 8
  • 9. Integrated value chain 9 9
  • 10. Waiting for China www.leroy.no
  • 11. Norwegian Salmon export after Dec. 8, 2010 11 11
  • 12. Business as usual for seafood … except salmonAll shipments of Norwegian Salmon are tested for:FlorfenicolFlumequineLincomycin ExportsSpectinomycin reduced byOxytetracycline 56% in 2011!Oxilinic AcidSealice GrowthAnisakisCrystal violet estimate inParalytic shellfish poisoning normal timesStaphylococcus aureus - 30% aboveVibrio parahaemolyticus last year.Vibrio choleraeListeria monocytogenes 12 12
  • 13. Our customers hit the hardest • Can Norwegian exporters motivate Norwegian authorities? •FHL, MoF, MoFA •What is Norway doing to initiate dialog with China? 13 13
  • 14. Fossen launchedin China• Launched in October in high-end supermarkets 14 14
  • 15. Potential in AsiaHighlights:•South-Korea:49 millions•Taiwan: 23 millions•Singapore: 5 millions•Indonesia:237 millions•Southeast-Asia: 447 millionpeople (Indonesia,Philipines, Malaysia,Singapore, Taiwan,Thailand, Vietnam)•India: 1,2 billion people 15 15
  • 16. KOREA: Local farmed halibut dominate the sahsimi segment withNorwegian Salmon, but exports are still low. Only local smoked salmon 16 16
  • 17. Potential in Asia• Increasing middle class and economic growth• Tourism increasing• Huge differences between countries• Consentration around large cities: Bangkok, Taipei, KL.• From wetmarket to modern retail; important distribution channel for Norwegian Salmon• Salmon present in hotels and in the growing number of sushi chains and high-end supermarkets• Lack of knowledge about salmon and Norway• Competition from Chile• Sushi/sashimi is popular – advantage fresh Norwegian Salmon 17 17
  • 18. BRIC middle class increase by 800 million , NSEC 18 18
  • 19. Incredible India 19 19
  • 20. India: world’s largest population in 2030 • 1,2 billion people • 2030: no.1 population • ¾ lives in rural areas • Third largest economy in Asia and Oceania, after Japan and China • Increasing middle class • One of the poorest countries in the world • Big differences – rich and poor 20 20
  • 21. Trade barrieres Norwegian Salmon2006: Kronprinsparet besøkte India. Foto: EFF/Kjartan Mærstad • 30% tariff on salmon, excluding whole salmon which was reduced to 12% in 2006 • EFTA negotiations ongoing 21 21
  • 22. Indias retail sector 2010 2015•Modern retail outlets holds a small Number Number share of the grocery market Company Of Of Outlets Outlets•One of the least developed retail Future Group 437 923 markets in the world Reliance Retail 604 1 169•Supermarket is the dominating type at present Walmart 5 50•Hypermarkets will increase (Dairy Farm, Aditya Birla 543 743 Metro Group) Food rite, SPAR, Walmart, Metro Group 6 18 Tesco and Carrefour Grand Total 1 595 2 903•Restrictions on foreign ownership, Kilde: Planet Retail 100% foreign ownership only allowed in cash& carry segment•Undeveloped distribution channels 22 22
  • 23. 23 23