MercoPress. South Atlantic News Agency
New Zealand fishing company gets burnt fingers in Argentina with hoki
Sealord Chairman Matanuku Mahuika admits the company lost 60m dollars in the Argentine hoki experience 
The New Zealand Maori co-owned deep-sea fishing company Sealord is walking away from its disastrous hoki venture in Argentina with an estimated 60 million dollars loss, reports the NZ media.
But an internal notice to Sealord staff from Chairman Matanuku Mahuika, obtained by Auckland’s Sunday Star-Times, says Sealord will return to profit and pay Maori a dividend again.
Sealord is now facing its angry Maori shareholders over heavy losses. It is owned by a holding company, Kura, which in turn is half-owned by 58 iwi (indigenous Maori nations), under a Treaty of Waitangi settlement, through Aotearoa Fishing.
Sealord has never said how much it paid for Yuken but forecast in 2009 it would turn over 60m dollars within five years. But it has made only losses and was funded, in part, by cutting 350 jobs in the NZ South Island and selling mussel farms. At the time, Sealord chief executive Graham Stuart said it was a case of losing some jobs to save many more.
Mahuika said Yuken would not be profitable and it was looking to sell it for a nominal amount.
“If even that can't be achieved, Sealord intends to walk away from the Yuken investment at the end of this month,” he said.
Sealord started as a minor partner in Yuken in 2000. It became 100% owner in 2009 when the Argentine shareholder went broke.
“Yuken has never performed strongly from a financial point of view, but was able to trade profitably, albeit modestly so, in the years from 2005 through to 2009 but never generated a positive cash-flow,” he told staff.
Yuken's business operating losses totalled “16m over the last three financial years”.
At the same time Argentina's economy has suffered 30% annual inflation and political and social instability. He said Yuken's losses had been funded with Sealord's cash.
Sealord had tried to sell Yuken and, while 134 potential buyers had contacted it, only two maintained any interest after due diligence. To limit losses, Sealord has tied up Yuken's vessels and ceased fishing operations.
But Argentina's hoki quota must be fished to be retained. Yuken had five hoki licences and four factory ships.
Sealord is also half owned by Japan's Nippon Suisan Kaisha, usually known as Nissui
Top Comments
Disclaimer & comment rules-
-
-
Read all commentsAnother foreign investor walks away from Argentina.
Jul 22nd, 2013 - 06:53 am 0Should have invested in the Falklands. Better yet, sail your vessels to the Falklands and sell them there. Seems to have an extremely successful and profitable fishing industry.
Does the anybody in this indigenously owned business even understand the terms ““Yuken has never performed strongly from a financial point of view, but was able to trade profitably, albeit modestly so, in the years from 2005 through to 2009 BUT NEVER GENERATED A POSITIVE CASH-FLOW,”
Jul 22nd, 2013 - 01:31 pm 0And I bet this was disappointing:
Yuken's business operating losses totalled “16m over the last three financial years”.
But the killer:
“At the same time Argentina's economy has suffered 30% annual inflation and political and social instability.”
Something you never, never do after the preceding points:
“Yuken's losses had been funded with Sealord's cash”
You MUST as a business owner be prepared to pull the plug well before using other units cash, otherwise you risk losing everything.
I bet the Japanese were really impressed with this outfit.The Dark Country strikes again.
Well this isn't the 90s, where it was all profit and no investment.
Jul 22nd, 2013 - 04:52 pm 0Now it's all investment and no profit.
Maybe a little unfair, but that's what happens when you take advantage of a country, maybe they will not like you too much.
Those that invest and wait things out may get really wealthy, but only in 10-20 years when perhaps a balance is struck.
But it is the capitalists fault for souring Argentina to capitalism, the 1990s was all their doing.
Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!