The South Australian company plans to fund its “Vision 2025” strategic plan by raising up to A$21.9 million to expand its ocean farming operations in Spencer Gulf.
It also plans to use its new liquid nitrogen freezing technology to drive sales growth in the huge North American and Asian markets, which have traditionally been dominated by frozen Japanese Kingfish.
Clean Seas is the largest farmed Kingfish producer outside of Japan, and the global leader in full cycle breeding and farming. It claims its Spencer Gulf Hiramasa Kingfish is “arguably the best raw fish in the world”.
The Australian Stock Exchange (ASX) listed company recently announced a 23 per cent increase in its underlying EBITDA (earnings before interest, tax, depreciation and amortisation) for the 2018/19 financial year to A$5.9 million and an underlying profit after tax of $2.59 million.
Clean Seas also announced in July it had formally received certification by the Aquaculture Stewardship Council (ASC), which is considered the gold standard in aquaculture globally.
Managing Director & CEO David Head said the ASC certification was an exciting and important step for Clean Seas.
“We have long been the global leader in the full cycle breeding, production and sale of Yellow Tail Kingfish,” he told the ASX.
“This ASC Accreditation is formal validation of our environmentally responsible and sustainable farming practices.
“As we embark on further expansion, particularly in Europe and North America, the ASC Accreditation will open up opportunities with customers seeking high quality, premium seafood products with these verifiable environmental and sustainability credentials.”
The certification, profit and growth vision mark the end of a turbulent decade for the company.
In 2009, Clean Seas had a live biomass inventory of about 4000 tonnes of Kingfish before the fish started mysteriously dying. By 2012 the mortality rate had increased from around 15 per cent to more than 80 per cent, reducing its live fish inventory to less than 500 tonnes. In mid-2012 the company discovered a taurine deficiency in the feed was responsible for the soaring mortality rate, which is the subject of an ongoing court case.
In 2017 Clean Seas moved its processing to a new facility in the South Australian capital Adelaide to be closer to export markets and increase production capacity. It has since also invested in liquid nitrogen rapid freezing technology to access markets further afield and at price points previously not achievable with a fresh product.
Unlike Europe, where Clean Seas is the market leader in fresh Kingfish, the North American and Asian kingfish markets are dominated by frozen sales and also represent more than 80 per cent of global sales outside of Japan.
Clean Seas has recently established sales and marketing capability in North America and Asia where it sees significant growth opportunity, particularly with its SensoryFresh frozen products. Expansion into these markets where it currently has low market share is expected to be a key driver of sales from 2688 tonnes in FY2019 up to 6000 tonnes a year by 2025.
In August, Clean Seas completed a $6.6m equity placement to major shareholder Bonafide and announced a proposed convertible note entitlement offer to raise a further $15.3m to fund and implement its “Vision 2025” Strategic Plan.
Clean Seas Seafood grows its Kingfish in Boston, Arno and Fitzgerald Bays in the Spencer Gulf, which also support global Western King Prawn and Southern Bluefin Tuna industries. The gulf is fed by the Southern Ocean and has a direct line of sight to Antarctica some 3500km to the south.
Yellow Tail Kingfish has creamy white to pale pink flesh is known for its sashimi qualities but is also gaining traction as a versatile cooked product.
“Clean Seas believes its competitive advantage is derived from the quality of its ocean reared Spencer Gulf Hiramasa Kingfish, having established markets across four continents, 20 years of breeding management programs and associated intellectual property, full ownership of its supply chain, and long standing and positive social licence with local Spencer Gulf communities,” the company said in its announcement to the Australian Stock Exchange yesterday.
“The Company reiterates its confidence and positive outlook that it is on the right trajectory to achieve the scale required to deliver on its goals of profitability, cash flow sustainability and gains in shareholder value.”Jump to next article