Sanford Seeks Clearance to Buy Pacifica Sea foods Group in New Zealand

Online, October 5, 2010 (Newswire.com) - The Listed fishing entity is seeking the approval of the Commerce Commission to acquire the aquaculture business, Pacifica Seafoods Group. However, Sanford was quick to point out that its application did not imply any agreement. Pacifica Seafoods Group is involved in the processing of sea foods such as mussels, some salmon and oyster operations and was formerly part of the Skeggs Group. Eric Barratt, Sanford managing director would not comment on the pending purchase, nor divulge the reasons for the firm's interest in the sea foods company.

However, analysts believe the move might be motivated by a need for growth and Sanford may already be undertaking due diligence studies on the firm. Sanford's three plants are the largest mussel processing plants in New Zealand. This is from a report the firm released provisionally, reiterating that the processing plants making up the biggest in the country were the firm's Sanford Havelock plant, the Pacifica site in Christchurch and the North Island Mussel Processors in Tauranga that is an equal joint venture between Sanford, Sealord Group and Greenshell New Zealand.

But even with the plans for a potential New Zealand acquisition, Sanford said had worked on several undertakings geared at creating some form of order to the market and had agreed to form a joint venture firm that will result in a single brand to exclusively market mussels into China. The mussels will be called Pure New Zealand Greenshell Mussels. China had not taken significant volumes of mussels for a number of years and, under the free trade agreement, the tariff would drop progressively to zero by 2012. The joint venture firm was started in Shanghai and is owned by Sanford, Pacifica, Sealord, Greenshell New Zealand and Aotearoa Seafoods. Pacifica employs more than 350 people and exports to more than 30 countries, but about 40% of its mussels have been going to the USA and 30% to Asia. Sanford is diversified across the three main aquaculture species, mussels; salmon; and Pacific oysters, but Pacifica is mainly concerned with mussels, though it has limited operations in salmon and oysters.

The overall industry is worth over $350 million, with mussels accounting for 86% of total aquaculture exports (by volume) and 77% by value. A third of the mussel exports go to North America, and most of the rest to Asia, Europe, and Australia.

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