New England Seafood International’s supply chain has been further strengthened as it gears up for major growth led from its £15 million Grimsby expansion.
Sealaska, the processing giant’s parent company, has taken its equity investments beyond the £7 million mark in Icelandic and Norwegian whitefish specialists, as the footprint is doubled on Europarc. The move will help serve major contract wins valued at £50 million in the retail sector, while creating hundreds of jobs.
NESI is aiming to raise consumption levels in the UK from a “stubbornly low” bar, with rampant food inflation seeing chilled fish sales fall 10 per cent. This financial year’s £2.8 million investment into Normarine, followed a significant cash injection of £4.3 million into Iceland’s IceMar and AGS Holdings in the last period.
Read more:
In his strategic report accompanying the latest accounts, chief executive Dan Aherne outlined the volume of the growth now kicking in. He said: “Through a series of competitive retail tenders we have both defended our existing retail business and secured material increases to our volume and revenues which will start to favourably impact our results from H2 2023. These contracts, underpinned by our positive outlook for the category, have supported a significant £15 million expansion of our Grimsby production facility to develop a state-of-the-art highly efficient modern production site.
“Early indications in 2023 in the UK are that category decline has stopped with volume now stabilised.The UK outlook is now looking better with inflation expectations falling rapidly. We are cautiously optimistic that the category will return to growth this year as we remain focused on building penetration and value in this species that we offer.
“With new revenues from the retail tender wins of close to £50 million annualised, which will start to impact sales from September 2023, we are confident that the future prospects for the company are strong.”
The supply chain acquisitions are described as having “significantly” enhanced access to, and knowledge of, primary markets for several species including cod and haddock, and provide “a source of competitive advantage in a rapidly evolving geopolitical and supply landscape”. Mr Aherne added: “This in-depth market understanding and access to raw materials has never been more relevant than today when the supply of high quality cod and haddock in global markets has been significantly impacted by the Russian invasion of Ukraine.”
“Our collaborations with IceMar, Normarine and AGS have ensured access to raw material at competitive market prices which has allowed NESI to continue to provide unhampered service and a consistency of quality for our customers.”
Referencing food inflation’s position well ahead of headline consumer price index during the period, with a 19.2 per cent peak over 11.1 per cent – leading to consumers opting for cheaper protein – Mr Aherne said: “Trading during the period has been challenging in the UK markets, with significant supply-driven inflation resulting in rapidly rising prices across all protein.” He told how multiple factors, including shipping container availability, rising energy costs and fuel and animal feed prices exacerbated by the Ukraine situation had all been factors, so too Brexit-impacted labour availability and subsequent costs.
Turnover was virtually flat, up half a per cent from £151.5 million to £152.3 million, with margins squeezed and a significant restructure leading to a loss of £77,000 – from a £5.7 million profit in 2021. Headcount was down from 661 to 612 across Grimsby and Chessington in Surrey, with the former now ramping up significantly to handle the retail wins.
NESI swooped for the neighbouring Haith’s site in 2021, with the sites merged over recent months, following the bird seed specialist’s move to Louth. It was supported by grant-funding as one of a clutch of Grimsby companies to benefit in the recent round that brought £5 million to the town.
Original artice – https://business-live.co.uk/all-about/yorkshire-humber