Australia’s Oyster Coast chairman David Trebeck today announced the board’s decision to enter into a joint venture with private investors to establish a farm asset holding company. The announcement came at the NSW South Coast company’s annual general meeting of shareholders in Narooma.
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In coming to this decision, the board noted two consistent themes elsewhere in the seafood sector, both in Australia and further afield: vertical integration and industry consolidation.
Shareholders were advised that the oyster industry, especially in New South Wales, is currently quite fragmented, contributing to generic marketing, growers generally being price takers, and a lack of value adding opportunities.
“We think there is a wonderful opportunity to generate benefits for investors by embarking upon a vertical integration strategy,” Mr Trebeck said. “As companies expand, they need to exert greater control over their supply chains if they are fully to meet the attributes of reliability and quality that their customers expect.
“This is evident in segments as diverse as South Australian mussels, which is now owned by two companies that acquired smaller companies and consolidated their operations, as well as New Zealand oysters and mussels, salmon, abalone aquaculture and Western Australian lobsters.”
The joint venture will be managed by Australia’s Oyster Coast. The farming company will be run as a wholesale supplier in which Australia’s Oyster Coast will be but one customer.
The company’s supply mix policy will be provided in due course, but Mr Trebeck assured grower shareholders it would enable them to supply the majority of the company’s requirements if they so desire.
“We expect that participation in the joint venture will augment the available supply from grower shareholders. Importantly, it will enhance the profitability of Australia’s Oyster Coast Ltd by underwriting supply as we increase sales, as well as by being a profitable investment in its own right.”
Three new directors were elected to the board replacing retiring Clyde River oyster growers, Ben Ralston and Steve Feletti. The new directors include oyster growers, Warwick Anderson from Wapengo Lake and Pippa Boyton of Merimbula, as well as John Susman, director of Fishtales, an Australian seafood industry agency.
The chairman’s full address can be found on the company’s website www.australiasoystercoast.com
