Seafood supplier Alliance Select Foods International Inc. sees a return to profitability this year, from a “very challenging” 2013.
“It will be night and day from last year,” Alliance chief executive officer Jonathan Dee said, describing a reversal in the company’s fortunes.
Dee told reporters on the sidelines of the company’s stockholders meeting late Monday that he would be able to present a better picture after the first semester.
In 2013, Alliance incurred a net loss of $2.58 million—a reversal of the net profit of $1.31 million registered in 2012. But in the first three months of the year, it posted a net profit of $646,252 as all subsidiaries started to turn in profits for the first time.
Alliance is optimistic that, with its strategic investments in fishing operations and backward integration, it will be able to mitigate the effect of higher raw material prices for its canned tuna division.
“As the investment gathers pace and the group begins to optimize its fishing resources in 2014 and 2015, Alliance and its subsidiaries is well poised to take advantage of fully integrated operations to improve its profit margins and decrease dependence on higher priced raw materials,” the company reported to its shareholders.
For most of 2013, high raw material prices for tuna trimmed the company’s profit margins. It was only toward the end of the year that the prices of raw materials eased.
With Alliance’s investment in its own fishing fleet, the company may be able to cover about half of its requirements and reduce its vulnerability to the price fluctuations of raw materials, Dee said.
Alliance is set to deploy its newly acquired fishing fleet this month.
“When it’s already running, I think it can surprise us,” he said.
Also, Dee said, after Alliance started its local distribution of frozen and smoked 10 salmon months ago, market reception had been better than expected.
“It’s quite good. I think we’re doing quite well. It’s above expectations,” Dee said, as such, referring to distribution of fish products under the “Super Fish” brand in most major supermarkets in Metro Manila, Cebu and Davao.
He estimated that the sales volume averaged at about 10 tons of fish a month.
“We saw that there’s no offering of well-priced salmon here,” he said. “It’s a big economy, so we thought we’re starting something here.”