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Fangst- og markedsutvikling for Alaska Pollack - Norfishing 2012
 

Fangst- og markedsutvikling for Alaska Pollack - Norfishing 2012

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Bernt Brodal, American Seafoods

Bernt Brodal, American Seafoods

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    Fangst- og markedsutvikling for Alaska Pollack - Norfishing 2012 Fangst- og markedsutvikling for Alaska Pollack - Norfishing 2012 Presentation Transcript

    • NorFishingAugust 15, 2012
    • Introduction • Overview - American Seafoods • Regulatory Environment and Resource Health – U.S Eastern Pollock Bering Sea Fishery • Russian Pollock Fisheries • Trends Impacting Seafood Prices • Key Markets 1
    • American Seafoods Company Overview• Leading worldwide integrated seafood company – Consolidated revenue of approximately $500 million – Largest Harvester of fish for human consumption in the United States with 2011 harvest volume of more than 250,000MT• We operate in some of the world’s best managed and sustainable fisheries – Exclusive U.S. Bering Sea pollock fishing privileges results in high barriers to entry – Also participate in Pacific Cod and Yellowfin sole fisheries in Alaska and the Pacific Hake fishery off the U.S. Pacific NW Coast – All the fisheries that we participate in are certified as sustainable by the MSC• Diverse revenue base – Sales to U.S., Europe, Japan, Korea, and China• Experienced management team 2
    • We Operate in Two Primary Business Segments At-Sea Processing Land-Based Processing  Harvesting and primary processing of  Primary processing of scallops and pollock, Pacific cod, Pacific whiting secondary processing of seafood (hake) and yellowfin sole portions and fillets at New Bedford, MA facilities  Largest harvester and at-sea processor of pollock, primarily in the  Includes value added seafood U.S. Bering Sea portions, scallops and fillets  Revenue: $324 million (66% of  Important in gaining access to consolidated total) (1) restaurant and supermarket industry  Recent acquisition of a competitor  Revenue: $165 million (34% of consolidated total )(1)(1) Year ended Dec. 31, 2011. Intersegment financial amounts allocated to segments based on each segments percentage of consolidated revenue or consolidated gross profit, respectively. 3
    • State-of-the-Art Fleet of Vessels  5 active vessels – largest fleet in U.S. Bering Sea pollock fishery and in Pacific hake fishery  Finest in industry – all Det Norske Veritas Pollock  ~300 feet in length; carry ~130 crew members Catcher-  Capable of daily production of ~150 metric tons eachProcessors  Nets designed to minimize environmental impact  Products: roe, surimi, fillet blocks, headed/gutted fish, fishmeal, fish oil  Maximize yield - Improved pollock flesh recovery rate from 23% in 2002 to between 28% and 30% currently  5 vessels – Other  Selectively operate in P-cod and other fisheries Vessels  Two Extra C/P vessels provide excess capacity No near-term need to purchase or rebuild any vessels 4
    • Pollock – Leading Species for Human Consumption Top Ten Fish Species – Global Production (1) U.S. Consumption (2) (in millions of MT) (in pounds per capita) Top 10 Fishery Products Species Production Primary Usage Consumed in USA Anchoveta 7.4 Fishmeal Shrimp 4.0 Pollock 2.7 Human Consumption Canned Tuna 2.7 Atlantic Herring 2.5 Human Consumption & Fishmeal Salmon 2.0 Skipjack Tuna 2.4 Human Consumption Tilapia 1.5 Chub Mackerel 1.9 Human Consumption & Fishmeal Pollock 1.2 Largehead Hairtail 1.4 Human Consumption & Fishmeal Blue Whiting 1.3 Human Consumption & Fishmeal Catfish 0.8 Crab 0.6 Chilean Jack Mackerel 1.3 Human Consumption &Fishmeal Cod 0.5 Japanese Anchovy 1.3 Human Consumption Pangasius 0.4 Yellowfin Tuna 1.1 Human Consumption Clams 0.3 Top Ten 23.3 All Species 15.8(1) Source: FAO: “The State of World Fisheries and Aquaculture” – 2010. 2006 Data.(2) Source: National Marine Fisheries Services (NMFS) data. 2010 Data. 5
    • Regulatory Environment and Resource - US Eastern Bering Sea Pollock Fishery
    • Abundant, Stable Pollock Fishery Historical Catch 1986 to 2011 and Projected 2012 Pollock Quota (TAC) (1) (Tons in millions) 25 Year Ave: 1.23MM MT 1.5 1.4 1.5 1.5 1.5 1.5 1.5 1.4 1.3 1.3 1.4 1.2 1.2 1.2 1.3 1.1 1.2 1.1 1.2 1.1 1.1 1.0 1.2 1.0 0.9 0.8 0.8 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 (2) (Tons in thousands) Biomass as compared to TAC levels(2) 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 TAC Biomass(1) Catch data 2006 to 2010 per Dec. 2011 North Pacific Fishery Management Council (NPFMC) Eastern Bering Sea pollock SAFE report, 2011 Catch data per National Marine Fishery Service Alaska Region Catch report, 2012 pollock TAC as published by NPFMC(2) TAC and Biomass by year, per Dec. 2011 NPFMC Eastern Bering Sea pollock SAFE report 7
    • Attractive Regulatory Environment; Barriers to Entry TAC Allocation (1) Catcher-Processor Pollock Allocation (1)(2) Total Allowable Catch  19 vessels named in American Fisheries Act – (“TAC”) no other vessels may participate 1,212,000 MT Starbound Ltd. Arctic Storm Alaska Community 6.2% Directed Pollock 12.8% By-Catch Development Quota Catch (“DPC”) (3% of TAC) (“CDQ”) (87% of TAC) (10.0% of TAC) 15.5% Glacier Mothership Inshore Catcher-Processor (2) Fish Ltd. 45.9% (10.0% of DPC) (50.0% of DPC) (40.0% of DPC) 17.1% Trident American Seafoods ASG Total 2.5% Allocation Share 15.8% TAC + CDQ Purchase = 17.8% TAC Coastal Villiages of 1.9% TAC (18.4% DPC) 216,000 MT Quota(1) 2012 U.S. Bering Sea pollock TAC allocation.(2) Includes allocations to catcher-processor vessels and catcher-vessels. 8
    • Russian Pollock Developments
    • Russian Pollock Developments • Russian Pollock harvest has been stable between 1.4 - 1.6 mill MT in recent years • 2012 Harvest expected to stay on par with 2011 despite the 5.7% TAC increase. Fishing so far has been fairly good • Coastal areas expected to continue to increase in TAC (coastal fish is mainly for domestic sales)– Sea of Okhotsk seem stable • MSC certification experience continued delays… 10
    • Russian APO TAC vs. actual catch 1 800 000 Total TAC 1 600 000 1 400 000 1 200 000 Catch in Other Areas 1 000 000 N/S Kuril Is 800 000 W. Bering Sea SOO 600 000 400 000 200 000 0 2009 2010 2011 2012E Source: TINRO / RU AP Assoc. 11
    • Russian APO product mix trends in MT 2009 2010 2011* 2012 trend Fillet/Blocks 35,000 30,000 24,500 Stable Mince 6,000 5,000 4,800 Stable Stable to slight H/G 660,000 700,000 586,000 increase W/R 30,000 45,000 362,000 Stable to decrease• Fillet/Blocks: the production of fillets and mince blocks is expected to remain fairly stable between 25,000 to 30,000 MT in 2012• H/G: Production expected to remain stable → demand in China and Russian domestic market continue growing• W/R: Production could decrease due to weaker demand in Africa. Main market continue to be Korea. * Source: Russian APO Association 12
    • Market Trends
    • Global Trends Impacting Seafood• Increasing Worldwide Demand For Protein• Increasing Prices for Grain and Protein• Consumers increasing focus on health benefits of Seafood• Favorable Environmental impact of Wild caught seafood versus agriculture 14
    • Growing Demand for Protein• World population increased from 6 billion in 2000 to 7 billion in 2011• United Nations Predicts 8 Billion people by 2030 and 9 Billion by 2050• Economic growth in developing world is resulting in increased caloric and protein consumption per capita• Worldwide Food Demand May Double by 2050• Increased fuel prices have resulted in: – Increased demand for grain as a raw material to produce Biofuels – Increasing cost to produce grain and protein products 15
    • “Corn, wheat and soybean prices projected to remain at historical highs through 2020” – USDA ERS $ per bushel 12 Soybeans 10 8 Wheat 6 4 Corn 2 0 1980 1985 1990 1995 2000 2005 2010 2015 2020Source: USDA Agricultural Baseline Projections to 2020, February 2011.
    • Higher grain prices will keep protein price inflation high $ per hundredweight, nominal, U.S. markets Beef cattle: 120 Steers, 5-area 110 100 Broilers: 90 12-city market price 80 70 Hogs: 60 National base 50 40 30 1990 1995 2000 2005 2010 2015 2020Source: USDA Agricultural Baseline Projections to 2020, February 2011
    • 18
    • Grain prices again at record levels• Already high grain increase to 1700 record levels 1500• June 15 to August 2, 2012: 1300 • Corn up 58% CBOT Corn 1100 CBOT Soy • Soy up 23% CBOT Wheat • Wheat up 40% 900“According to an August Congressional Research Service 700 report, feed costs account for 50 to 80 percent of cashoperating expenses in the U.S. livestock sector and U.S. feed grain demand has exceeded production 500 6/15/2012 7/15/2012 in all but one year since 2004.” – Agri-pulse, 9/14/11
    • Healthfulness: Alaska pollock vs. other meat proteins25 21.2 18.620 13.715 11.5 1210 7.6 5 5 1 3.03 0.2 0.6 2.9 0 Protein (g)/100 calories Fat (g) Saturated Fat (g) AK pollock Chicken Pork Ground BeefSource: www.nutritiondata.self.com/USDA 20
    • Ak pollock Omega 3 content higher than canned light tuna andmuch higher than other proteins (3 oz servings)500 418400300 239200100 59.4 58 39.1 0 Omega 3 (mg) AK pollock Canned Light Tuna Chicken Pork Ground Beef Source: www.nutritiondata.self.com/USDA 21
    • Wild caught seafood has a minimal environmentalimpact compared to other proteinsWild caught seafood:• Generally has lowest carbon footprint of major protein choices• No fertilizer is used in the production of wild-caught seafood• We make our own freshwater to produce pollock• No soil is lost in the production of wild caught seafood• No pesticides or herbicides are used to produce pollock 22
    • Developments in Key Markets
    • Pollock has the most diverse market distribution ofany major groundfish species. Russian domestic, 13% Europe, 37% North America, 17% Asia, 33%
    • North American market trend• Domestic demand for 1x frozen APO is increasing• Demand much driven by more seafood focus from the QSR segment = when other proteins increase in price, seafood gets more attention• More focus on quality products in retail/clubstore segment• Healthier eating promoted by current administration• USDA Procurement program ramping up 1x APO usage
    • European market trend• US 1x APO sales into Europe has to large degree not been affected by the European banking crisis• Sales of fillet block based products is increasing in most key markets• Demand for sustainable surimi increasing in France, Spain and Russia.• Weakening EUR is a concern
    • Asian market trend• Demand for APO surimi has increased in Japan and Korea.• China has become a net importer of surimi raw mat → demand expected to grow significantly in the years to come• US QSR’s in Asia increase their demand for 1x APO• Chinese domestic market for filet product has started to grow = great opportunities for wide range of APO based products