Mauritius Tuna Processor Blames Lower Earnings on Thai Access to EU

Revenue for the conglomerate’s seafood and marine segment in the financial year ended June 30, 2014 was down 3.7% to MUR 5.95 billion ($181 million), said IBL.

Profit fell even more, by 18.6%, to MUR 456m ($13.9m).

The group’s seafood and marine segment is home to the tuna companies Thon des Mascareignes, Froid des Mascareignes and Indigo Canning, as well as the shipyard business Chantier Naval de l’Ocean Indien, and fishmeal business Marine Biotechnology Products.

Combined, these make up around a quarter of IBL’s total revenue, but around a half in terms of profit.

Tuna processing factory Thon des Mascareignes has been trading in a very difficult market, said chairman Arnaud Lagesse and CEO Nicolas Maigrot in the company’s annual report.

The report attributed this to duty free access granted by Europe to Thailand.

IBL has been unable to clarify this reference for Undercurrent News, considering the free trade talks between Thailand and EU are still ongoing — and may even be suspended — but sources in the sector speculated it could refer to the autonomous tarrif quotas (AQTs) unveiled in 2013.

These ATQs allow for 22,000 metric tons of tuna loins to be imported duty-free every year into the EU, for 2013, 2014 and 2015. While this is not specific to Thailand, the latter is the main beneficiary of this deal, said sources.

22,000t of loins would translated into roughly 55,000t of whole tuna, which is the figure quoted by IBL in their report, they noted.

 “Our tuna processing factory – Thon des Mascareignes – has been trading in a very difficult market,” wrote IBL.

 “This has worsened with Europe granting duty free access to Thailand (the world’s biggest tuna processing country) for an equivalent of 55,000 metric tons of fish annually.”

 “This situation will continue to affect us in the future in the absence of any major change in bilateral agreements between Thailand and Europe.”

Given this market change, IBL is striving to find a solution for its tuna processing factory in Mauritius, it said. “Year 2014/2015 will carry its fair share of challenges, for Mauritius and IBL.”

One tuna processing source, however, was puzzled by IBL’s reference. “They [IBL] produce yellowfin tuna loins and their biggest competitor in Spain is Ecuador, certainly not Thailand,” he said.

Just last month the company merged its Thon des Mascareignes plant with Mitsubishi-owned tuna canner Princes. The new entity trades as Princes Tuna (Mauritius) and is majority owned by Princes.

It will operate two processing sites and generate sales of around $400 million a year, said Princes.

Thon des Mascareignes’ tuna processing site in Mauritius produces loins for export to canneries and pouches for foodservice customers. According to IBL’s first-half year report, it processes around 80t of fish daily in a value-added pouch format, with the balance sold as loins to the leading EU and US canners.

Meanwhile, the group’s shipyard, Chantier Naval de l’Ocean Indien, had another rewarding year with improved profitability, following an increase in construction activities and a full order book.

 “The shipyard operation is now established as a reference in the Ship Building and Repairs sector. Potential for growth is however limited in Mauritius, due to a lack of space in the port area. We are therefore looking at other regions to set up new shipyard activities and Gabon could present itself as being an option with its access to the Atlantic Ocean.”

Founded in 2005, TDM is the second largest tuna processor in Mauritius after Sapmer, which has been enlarging its processing and coldstore operations in the Indian Ocean nation.