WOFCO bidding to acquire Fandicosta as rising interest rates snag Galician seafood sector

Domaio, Pontevedra, Spain-based seafood firm Fandicosta is for sale, and fellow Galician enterprise WOFCO is interested.

Affected by higher costs and tighter interest rates, Fandicosta has entered negotiations with several interested parties in a sale, according to Faro de Vigo.

Fandicosta, founded in 1989, is comprised of an eponymous marketing firm and Casa Botas, Peixemar, Bonfrig, and a 50 percent share of Argentinean fishing firm Pesquera Cruz del Sur. It is a catcher and seller of frozen, chilled, and pre-cooked seafood products to foodservice outlets and food product manufacturers, selling mostly to European buyers.

WOFCO, created in 2016, has grown into an international seafood processor and trader, with operations in Holland, Ecuador, Peru, Argentina, the U.S.A., Morocco, Vietnam, and China. Between its founding and 2022, it registered annual growth rates of between 24 percent and 198 percent. It had EUR 330 million (USD 348 million) in sales in 2022 and has set the goal of EUR 400 million (EUR 421 million) in sales for 2023. Through the first six months of 2023, it had achieved EUR 180 million (USD 189.7 million) in sales and earnings before interest, taxes, depreciation, and amortization (EBITDA) of EUR 16.7 million (USD 17.6 million).

WOFCO is pursuing Fandicosta with the aim of increasing its vertical integration and warehousing capacity – Fandicosta’s 115,000-square-meter cold storage facility and its processing facilities in Vigo and Vilagarcía are the primary objects of WOFCO’s interest, according to Voz de Galicia.

Fandicosta’s owner, Ángel Martínez Varela, is eager to sell due to rising interest rates and the company’s EUR 72 million (USD 75.9 million) of short-term debt and EUR 24 million (USD 25.3 million) in long-term debt, which it mostly took on in 2021 to survive the Covid-19 pandemic. Fandicosta has suspended payments to suppliers until November, and at a company-wide meeting called in late September, a survival plan was presented that involved finding new owners.

"Selling is the only thing they can do," a Spanish industry source told Voz de Galicia.

Fandicosta is 12 percent owned by the state government of Galicia, which granted the company a EUR 3 million (USD 3.2 million) capital injection after it suffered through a fire that destroyed most of its processing plant in Domaio, knocking out 50 percent of its processing capacity for years afterwards.

Voz de Galicia reported many seafood companies in Spain’s Galicia region – the center of the country’s seafood industry – are struggling with higher costs and ballooning interest rates. It pointed to Nueva Pescanova, which is also seeking a sale, as the biggest example.

Photo courtesy of Fandicosta