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Alliance Expects Tuna Catches To Re-bound This Year

Fish processing firm Alliance Select Foods International is confident its net sales would rise by at least 50 percent this year on the back of a much-improved tuna catch, resilient offshore demand for its tuna and salmon products and the full-year contribution of Massachusetts-based salmon smoking and curing firm Spence & Co. Ltd., Alliance president and CEO Jonathan Dee said in an interview.

Dee said Alliance likely met its revised net sales guidance of $50 million for 2011, which would be at least 50 percent up year on year. The one-time business expense incurred in acquiring Spence late last year, however, may temper bottom-line results.

The company is upbeat on its prospects for this year, with salmon likely increasing its contribution to total business to 30 percent from less than 20 percent last year, Dee said.

“We’re focusing on Japan and the US for salmon. It will be our two biggest markets,” Dee said. In the United States, he said, salmon sales were not affected by the economic woes.

Tuna, being a low-cost source of protein, is likewise resistant to economic declines, Dee said, noting that a rebound in tuna catch this year would benefit the company.

For most part of 2011, tuna supply was erratic and resulted in a drop in revenue to $26.4 million in the first nine months from $30.8 million a year before for Alliance’s two tuna plants—one in General Santos City in Mindanao and the other in Bitung in Indonesia. The decline was, however, offset by the increase in revenue from salmon sales.

“We feel that this year will be a better year for tuna. The catch will likely improve from last year,” Dee said, noting that tuna catch historically rebounds the year following a very bad year.

Dee said Alliance was hoping to expand the capacity of its tuna processing plant in Indonesia from 60 to 90 tons per day within the year. This expansion will eat up the bulk of the company’s capital spending this year.