Farmed shrimp. (Photo: Seafarms Group)

Nissui agrees on share acquisition in Seafarms Group

AUSTRALIA
Thursday, May 24, 2018, 03:10 (GMT + 9)

Japanese seafood giant Nippon Suisan Kaisha, Ltd. (Nissui) has entered into an agreement with shrimp farmer Seafarms Group Ltd. (SFG) to acquire 14.99 per cent of its outstanding issued share for AUD 25 million.

Nissui pointed out its decision to proceed with its investment in SFG was taken when it was satisfied that SFG's proposed new large-scale prawn farming project in Northern Territory of Australia, known as Project Sea Dragon (PSD), would obtain the necessary government approvals for the development. It is also of strategic significance for Nissui to secure a differentiated farmed prawn business base and products.

For his part, Seafarms chairman Ian Trahar has described the deal as a “company-making agreement”.

“Seafarms’ offtake arrangements with Nissui will provide SFG with access to Nissui’s well established high-quality seafood distribution business in Japan, and by agreement, Asia and other international markets,” Trahar pointed out.

The executive explained that Nissui will market their Australian premium product which will be jointly branded with Nissui in Japan and may look at establishing value added product offerings as well.

The agreement will also obtain fresh funds for Project Sea Dragon, which plans to start the construction of black tiger prawn farming site in 2018 and bring the product to the market in 2021. At the first year of harvest PSD targets producing 10,000 tonnes of quality fresh prawn.

Through this equity participation, Nissui will market the black tiger prawn products from PSD exclusively in Japan, in the Australia and New Zealand markets, on top of potential global distribution through the Nissui Global Links network.

Nissui Group will also distribute in Japan and Oceania region approximately 2,000 tons per annum of black tiger and other prawns sourced from SFG's existing Queensland prawn farming operations, including products from its complete farming cycle.

Despite a declining trend in the Japanese prawn market, expanding US, Europe and China market supports substantial demand for farmed prawns due to its stable quality, quantity and price.

Vannamei shrimp holds 80 per cent of global farmed prawn market and once-dominant black tiger prawn holds 20 per cent. However, the bigger-size, the vivid glossy color after being cooked, and the rich texture, which sustains demand for black tiger prawn, and has broadened the price differential with Vannamei shrimp in recent years.

Nissui highlights it pursues "Sophistication of Aquaculture Business" as one of the major themes in its Marine Products Business and has already started a feasibility study of on-shore farming of Vannamei shrimp for eating raw in Japan.

It now invests in the development of farming businesses in the world consistent with its new mid-term plan "MVIP+2020", starting from 2018.

The investment in the SFG businesses will broaden its farmed shrimp product lineup and enable sustainable delivery for the long term.

Nissui will develop the prawn business to be a core business in the same way as its salmon/trout and whitefish businesses.
 
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