February 22, 2012

 

Alliance Select's net sales may increase in 2012

 

 

Alliance Select Foods International's (ASFI) net sales may increase by more than 50% this year due to contributions from recently acquired salmon processing plants, according to the company's representatives.

 

ASFI is considering two new offshore acquisitions as part of its effort to become a key regional seafood producer. They are located in North America and the South Pacific, and would also contribute to the success of the business.

 

The company believes its net sales will be at least doubled in 2012, thanks to improved tuna catches, strong offshore demand for its tuna and salmon and the year-long contribution of US-based salmon smoking and curing firm Spence & Co Ltd, according to Alliance President and CEO, Jonathan Dee.

 

For 2011, Alliance likely met its revised net sales guidance of US$50 million, representing at least a 50% rise on-year, although the expense of acquiring Spence last year may undermine bottom-line results, according to reports.

 

The company is upbeat about 2012. Salmon may boost its contribution to total business to 30% from less than 20% in 2011, Dee said.

 

"We're focusing on Japan and the US for salmon. It will be our two biggest markets," Dee said.

 

Economic problems have not affected salmon sales in the US, he noted, and tuna is also resistant to economic woes.

 

For most of last year, tuna supplies were inconsistent and led to a drop in revenue from US$30.8 million to US$26.4 million in the first nine months on-year for Alliance's tuna plants in General Santos City and Bitung, Indonesia. The decline was offset by higher revenues from salmon sales.

 

"We feel that this year will be a better year for tuna. The catch will likely improve from last year," Dee said.

 

He pointed out that historically, tuna catches tend to rebound the year following a very bad year.

 

Alliance was hoping to expand the capacity of its processing plant in Indonesia from 60 to 90 tonnes per day this year, a move which will take up the bulk of the company's capital spending in 2012, Dee added.

 

Earlier this month, ASFI said it would invest US$500,000 to buy an additional 10% of canned tuna subsidiary, PT International Alliance Foods Indonesia. ASFI would then own 99.98% of the company.

 

In January, ASFI informed that it had established major supply deals for smoked salmon in the US as Southeast Asia's main producer of the item.

 

US subsidiary, Spence & Company, would be the sole supplier for the entire Wellsley Farms' smoked salmon product line to be sold at BJ's warehouse retail stores along the east coast. Spence will also be partnering with Costco's Northwest division.