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VIET SEAFOOD

Alliance Starts J/V In Tuna Fishing Philippines, February 2, 13

Tuna and salmon processor Alliance Select Foods International, Inc. has signed a joint venture agreement with a tuna fishing company as part of ongoing efforts to ensure its supply of raw materials.

In a disclosure to the Philippine Stock Exchange, Alliance Select said it has signed a joint venture agreement with CHL Fishing Industry Inc. and CHL Construction & Development Enterprises, Inc.

Under the agreement, the partners will incorporate a joint venture tuna fishing company to be named Wild Catch Fisheries which shall have an authorized capital of P16 million and a subscribed capital of P4 million.

Alliance Select will own 40 percent of the company’s equity, CHL will have a 15 percent stake while CHLC will own the remaining 45 percent of the joint venture firm.

According to Alliance Select, it will purchase all of the joint venture’s tuna catch which will ensure a steady and consistent supply of fish to the company’s canned tuna operations in General Santos City.

Alliance Select earlier acquired six commercial tuna fishing vessels from BSJ Fishing & Trading, Inc. (BSJ) for USD 15 million, in line with its plans towards vertical integration.

ASFII said the fishing vessels from BSJ settles in full BSJ’s obligation to ASFII for fish deposits totaling approximately USD 15 million.

“With the acquisition of the fishing vessels, ASFII expects to ease its dependence on fish suppliers for its tuna business as it will give the Company direct access to raw materials,” the firm said.

It added that this represents another step by ASFII in the direction of vertical integration including the incorporation in May 2012 of PT Van de Zee, an Indonesian fishing company which is 80 percent owned by its Indonesian subsidiary, PT International Alliance Food Indonesia.

PT Van de Zee has already secured a tuna fishing allocation from the Indonesian government. ASFII said Indonesia’s Ministry of Fisheries and Marine Resources has accepted from PT Van de Zee its fees for an initial allocation of 5,000 metric tons for 2012.

Conditioned on the fulfillment of its 5-year vessel acquisition program, PT Van de Zee has a potential allocation of 30,000 metric tons of tuna by 2016, said Alliance Select.

“This means that by that year, PT Van de Zee would be able to fully support a 100 percent capacity utilization of PTIAFI’s processing plant which has a capacity of 90 metric tons per day,” the firm said.

It explained that the allocation gives PTIAFI a very high competitive advantage in an industry whose biggest challenge is access to raw material resource.

Alliance Select said the allocation is also expected to allow PT Van de Zee to boost the overall value of the Alliance Group as its optimum yield of 30,000 metric tons per year would translated to an annual gross revenue of USD 66 million pegged at present value of USD 2,200 per metric ton.
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