Premier Fishing acquires squid firm, placing it at top of South Africa squid market

Cape Town, South Africa-based seafood company Premier Fishing SA (PFSA), an affiliate of Premier Fishing and Brands – the largest black-owned and managed food and fishing company in South Africa – consolidated its share of the squid market by acquiring Talhado Fishing Enterprises, the largest producer of the species in the country.

PFSA will take up an additional 607 ordinary shares in the issued share capital of Talhado for ZAR 95 million (USD 5.6 million, EUR 5.2 million). Talhado, with its associated companies, owns over 15 vesselsand a cold room facility with capacity for up to 800 metric tons of squid.

The additional shares give PFSA absolute control in Talhado, as it pushes up its stake from 50.3 percent to 80.65 percent of the ordinary shares.

Prior to ceding its controlling stake to PFSA, Talhado’s shareholding comprised PFSA (50.5 percent), Scofish (30.35 percent), Patrick Mbiko Family Trust (5 percent), The Sanbourne Trust (5 percent), Dino Moodaley Family Trust (5 percent) and Dino Mark Moodaley (4.35 percent).

Premier first acquired stakes in Talhado shortly after its first listing at the Johannesburg stock exchange in March 2017. At the time, the company said it set out to “continue to aggressively pursue acquisitions in the fishing industry to improve our synergy and diversification growth strategy.” Then in October 2017, Premier lived up to its word, acquiring a 50.3 percent stake in Talhado for ZAR 85 million (USD 5 million, EUR 4.6 million). The transaction was the largest transaction in Premier’s seven-month listing history at the JSE.

Talhado, based in Port Elizabeth, catches, processes and markets squid, and owns both sea- and land-based squid-freezing facilities.

Subsequently, PFSA, which is engaged in the catching, processing, and marketing of pelagic species (pilchards and anchovy), West Coast rock lobster, South Coast rock lobster, squid, and hake, takes full control of Talhado’s squid-fishing rights, brand, and processing facilities. The acquisition will likely give Premier Fishing’s new subsidiary dominance in South Africa’s squid sector.

However, PFSA will likely have to work in partnership with South Africa’s Department of Environment, Forestry, and Fisheries, to tackle squid resource scarcity in South Africa if the acquisition is to pay off in the long run.

South Africa has been grappling with the lingering challenge of squid-resource scarcity, with seafood companies such as Premier Fishing and Brands reporting depressed revenue in the past few years as a result.

For the six months ending 28 February, 2022, Premier Fishing and Brands reported a ZAR 62 million (USD 3.3 million, EUR 3.2 million) drop in revenue to ZAR 224 million (USD 12.2 million, EUR 11.5 million) “due to the scarcity of the squid resource.”

“Volumes landed and overall squid catch rates in the squid sector have taken a massive knock compared to the prior year,” the company said …

Photo courtesy of Talhado Fishing Enterprises