Conxemar is a window to the world. To the real world: among the greetings, meetings and decorations stands – many recycled from past editions – tap into the homes’ breath. He who says he has no pocket for this much moneyAn approach that prioritizes other products over fish. Therefore, the sales contract and the fair attract attention as a mirror of the daily life of all the countries to which the Galician industry sells its goods (almost all of them).
If Euribor was exactly 2.5% a year ago, today it rose above 4.2%. “Now is the time to review the quotas: suddenly you have lost another 300 or 400 euros a month from your bank account,” says the manager of one of the top 5 companies in the industry. The consumer chooses sea protein and largely discards it from the shopping cart. The main factor driving this sector to a decline in turnover is the narrowing of margins, in addition to the increase in operating and financial costs. In some cases, to levels close to bankruptcyAs illustrated by FARO of the Prensa Ibérica group. “Complicated months are coming, we have to endure,” summarizes another reference operator.
Inside Nueva Pescanova, for example, adapted the references from the Essential series to the new reality. We are already facing the strongest Christmas campaign of the year – with the added bonus of huge working capital consumption – they will be deployed a smaller can of Argentine shrimp, in addition to the traditional 2 kilos. It is also cleaner or more transparent packaging barlam slices: not a return to the old mass sale, but rather the adaptation of a value-added product to household perception.
“There is a purchasing policy that needs to adapt to demand quickly, and there are those that do not or, by their nature, take longer. Then you can see that you have stocked up. raw materials at a price and now you won’t get anything from it. Gives an example of “this is happening” merchant. For two reasons: because there is no demand (the price falls) or because the consumer rejects it (because he tries to transfer the costs to the final price). “We have atonia and our refrigerators are full”. “We gave away containers of swordfish that were sold for 5 euros instead of 12 euros before,” complains a longline businessman.
Investments
Therefore, this contraction in margins led to cash flow difficulties in some companies. Not in vain, as this newspaper describes, The investment effort of the sector has been huge in the last decadeIn order to improve its presence at the origin, diversify markets and provide more added value to raw materials. According to data from the Scientific, Technical and Economic Committee on Fisheries (Stecf) of the European Commission, the net investment allocated to inorganic growth operations (acquisitions of other companies) to the recovery of fisheries during this period was close to 680 million euros. fleet (new ships or improvements to existing ships), in cold logistics (installation of IQF freezing lines) or processing plants (more efficient machinery or packaging at high temperatures).
Profand, Iberconsa, Nueva Pescanova, Pereira, Pescapuerta, Fandicosta, Atunlo and Wofco participated in this strategy in one way or another. Companies are more leveraged than others, but all – like families – are affected by rising financing costs. “And now they are proposing an 8 percent operation,” complains another executive who consulted Ifevi. “There is no margin that can support this.”. Fandicosta addresses the sale of the head office Moaña factory; Planning to solve his problems as soon as possible, Atunlo renegotiates his debt with the bank. And many more operators will have to go through similar troubles, either because of their own circumstances or because they have been infected as suppliers.
Beyond the financial situation that companies face in this negative scenario, there are also numerous external disruptions that come from the markets in which they acquire or sell products. This is the situation in Namibia, with youvery weak campaign against pelagics (mastercraft, sardines) and with the atomized quota distribution system that forces shipowners to reach agreements with numerous partners to guarantee their operations. And Galicia is one of the key countries for the supply of production lines. a strong presence players Such as Nueva Pescanova, Grupo Iberconsa, Mascato, Grupo Pereira or Copemar.
Or Ecuador, which fears the risk of flooding of more than 110,000 hectares of shrimp farms El Niño phenomenon (Pescanova operates approximately 8,000 hectares together with Promarisco). With a product that actually already suffers from historically low prices. The latest export bulletin of the Ecuadorian Government is quite revealing on this subject: in the first six months of the year it exported 90,000 tons more vannamei shrimp (or prawns, as they say in the country), but earned 100 million euros less. . Regardless of how the market will react, the schools producing these seafood need to be fed, processed and exported at a much higher cost than before the COVID pandemic and, of course, the invasion of Ukraine.
Source: Informacion
James Sean is a writer for “Social Bites”. He covers a wide range of topics, bringing the latest news and developments to his readers. With a keen sense of what’s important and a passion for writing, James delivers unique and insightful articles that keep his readers informed and engaged.