Companies in the fishing industry have a love-hate relationship with government’s blue-eyed fishing company, Fishcor.
If you ask fishing companies that have dominated the fishing industry for years what they make of Fishcor’s impressive turnaround plan since Fisheries Minister Bernard Esau appointed new leadership at the company in 2014, they would tell you Fishcor is receiving preferential treatment and that it has a competitive advantage, hence its performance.
Fishcor’s management however maintains that there is no preferential treatment dished out to it, indicating that since 2014 it was not business as usual.
Fishcor, as a holding company, consists of Seaflower Whitefish and Seaflower Lobster. Seaflower Lobster is owned fully by Fishcor while Seaflower Whitefish is owned 78 percent by Fishcor and 22 percent by the Governors’ Trust. Seaflower Whitefish operates in the hake industry and has a processing facility in Lüderitz, while Seaflower Lobster is the only company with an operating factory for lobsters in Namibia.
When fisheries minister Bernhard Esau allocated a 10 000 hake quota to Fishcor in 2014, which the company went on to outsource, the fishing industry went up in arms and castigated the minister for discriminating against other companies.
Although the quota made a significant impact to the financials of the company, Fishcor’s management continues to maintain that although the quota helped to boost the revenue base of the company, an avalanche of operational changes still had to be made to ensure that the company navigates through the stormy waters it found itself in prior to 2014.
At the time Seaflower Whitefish was closed and the 520 employees were jobless. Also during the time financial institutions and suppliers refused ” to assist us because our overdraft facility was exhausted and the suppliers were not paid”, highlights Nghipunya. The company needed N$40 million to restart operations, a cash injection that was eventually made possible through the quota.
“The quota allocation is not only done to Fishcor but all fishing companies. If you say we were spoon-fed through this quota, than it means government is spoon feeding all fishing companies,” said Fishcor CEO Mike Nghipunya.
He added: “We get a quota just like all the other companies. Will it be fair for government to spoon-feed other companies while neglecting its own?” he questioned as he attempted to downplay claims that Fishcor is being treated with soft-gloves.
Nghipunya said other fishing companies have failed to make major investments in the fishing sector over the years.
Doing things differently
Nghipunya said major operational changes were implemented to improve efficiencies while huge investments into assets such as factories and fishing vessels also formed part of the turnaround plan.
Currently, Fishcor’s operational cost is beyond 70% of the income, Nghipunya explained that the company is going through a transitional phase.
“As much as you make money, you need to invest. We can only think of making sustainable profits after five years.
After we have invested, we will look at containing costs,” Nghipunya said.
He added that most of the costs in the fishing sector are fixed in nature.
Nghipunya also indicated that the current management cannot account for the losses recorded before its time.
“When we came in we started making a profit because we knew the potential of the group and we exploited that. We made sure we had all the tools we need. Some of the changes we made included ensuring that there is a catch capacity and production efficiency. All these processes helped to revitalise the processes of the company, Nghipunya said.
A few years ago, the state-owned company, Fishcor was known as a loss making entity from 2008 to 2014 before it started making its riches. It was placed under intense scrutiny for an array of issues such as having laid off workers and experiencing vessel problems which crippled the Seaflower Whitefish Company.
Fishcor which is now said to have grown in leaps and bounds is believed to have made a vast turn around since 2014 up to date. It is believed by its current management upon discovering the problems the company experienced then in 2014, that had it been a private or listed company, it would have been shut down a long time ago.
The company revealed that since 2014 it has made a profit of N$39 million in the 2014/15 financial year, N$42 million in 2015/16 and N$67 million in 2016/17 under its new management. During a media briefing held in Walvisbay the company’s leadership proudly showed off their profitable achievements during a media tour held in Walvisbay.
Nghipunya noted that those that were in charge before the new management took office, did not understand its mandate and that is why the company struggled the way it did.
Fishcor’s mandate is provided for in governments notice N0.154: Promulgation of National Fishing Corporation of Namibia Act 28 of 1991 which provides for the formation of the National Fishing Corporation of Namibia Limited, a “company with the object of exploiting the fish and other marine resources and promoting the establishment, developed and efficiency of other businesses engaged in the fishing industry and to provide for matters incidental thereto”.
He explained that when he joined Fishcor he had to understand the mandate first and that is how he and his team came up with a strategic plan to make sure that the company was operating and that it was efficient.
“We had a strategic plan that we have been administering since we got to Luderitz in 2014. What we did then up to date was to put the company in a very good state and we believe to the best of our abilities that we will continue to do so” he said.
He further explained that the new management, is one that is very youthful and thus having a young dynamic team, brought those good changes into the operation of the business.
Factory under construction
Nghipunya, highlighted that the company has been doing “very well” and has invested N$370 million in Lüderitz which mainly focuses on production, infrastructure, fleet machinery and equipment.
Although the company still experiences various challenges, the new management has noted that it is working towards improving the loopholes such as reducing costs and increasing its efficiency.
In addition as part of the company moving towards growth, Fishcor is set to open an N$ 530 million Horse Mackerel Pelagic Factory in September. The construction of the factory which started in July last year is said to be the biggest pelagic factory off shore in Sub Sahara Africa.
The fuel dependent operation will make use of solar panels to promote green energy security which is key to ensure the sustainability of Fishcor.
The factory which will have the capacity to process more than 70 000 metric tons of fish per year with 50 000 metric tons of quota guaranteed by the Ministry of Fisheries and Marine Resources will also create 700 new direct jobs in which 70 percent will be open to women.
Nghipunya, highlighted that through the factory plans to promote fish consumption are in the pipelines and that Namibia will be its top priority market in terms of also promoting entrepreneurship among the locals.
“We also want to create through the factory a business that employees people on shore. We are going to create employment and reduce poverty which is at the core of the project” he said.
Nghipunya said the factory will not be limited to Seaflower operations only, as private fishing companies will also be allowed to make use of the storage facilities at the new factory for a certain fee.
“This is not a Fishcor factory, it is a Namibian factory,” concluded Nghipunya.