Transcription of Finance News Network Interview with Huon Aquaculture Group Limited (ASX:HUO) CEO, Peter Bender
Hello I’m John Treadgold for the Finance News Network, and joining me today from Huon Aquaculture Group Limited (ASX:HUO)
is CEO, Peter Bender. Peter, congratulations on today’s listing on the Australian Securities Exchange.
Peter Bender: Thanks John, it’s certainly been a great day for Huon Aquaculture.
John Treadgold: A key question to start with is: What price did Huon list at and what value does that put on the Company?
Peter Bender: The listing price was $4.75 and that gives us a VAT total market capitalisation of $417 million.
John Treadgold: Your IPO was aiming to raise $133 million. How much did you raise and where will the funds be directed?
Peter Bender: We raised $133 million, it was actually oversubscribed. We’ve got a program of controlled growth strategy, which we started last financial year and that involves expanding every aspect of the business. We’re putting in a new hatchery, expanding our marine farming operations into more high energy sites. We’ve got a new well-boat coming out from Norway that’ll do a lot of the fish handling on the farm. The new value-added facility is being built at Parramatta Creek and we’re building nine new feed barges for the Company, so lots of things happening.
John Treadgold: Huon Aquaculture is one of Australia’s largest producers of salmon. It operates a vertically integrated company
that does everything from farming the fish, to producing it for market. Can you tell us a little bit more about the operation and your prospects for growth?
Peter Bender: It’s certainly a great industry; the market is growing very quickly. Our business as you say is fully vertically integrated. We’ve got hatcheries around the State, and we farm in the two growing regions of Tasmania that is suitable for growing salmon. We’ve got our own processing factories, we’re about to build the value-added plant at Parramatta Creek, so all our facilities are under one roof. We’re actually quite an innovative company as well, we’ve got our own workshop facilities and we design and build a lot of our own equipment. So it’s a company that’s developed quite a lot of equipment, particularly in the salmon farming area.
John Treadgold: Innovation is clearly important. Can you tell us a little bit more about how it operates within your business?
Peter Bender: In terms of our feeding systems, it feeds about half of the cost of growing the salmon. And a number of years ago, we developed a feeding system that worked on giving the fish – it works adaptably and it gives the fish as much as what they want to eat. And we’ve just incorporated that into a new feed barge system that enables us to feed the fish more efficiently. And enables us to go to the more offshore sites and still enables us to feed the fish, as much as what they want. But we certainly have a lot of other new things that we’ve been working on. We’ve got a new fortress pen system and that’s designed to keep any predators away from the fish, and give the fish a really good growing environment to be in.
John Treadgold: In regards to that, how do you manage retaining staff and maintaining that valuable intellectual property?
Peter Bender: We’ve patented quite a few of the new developments that we’re working on, and we’ve certainly got great staff. They love working for the business, we certainly look after them well. In fact we’ve given all of the staff a gift of shares and also given them the ability to turn their bonuses into shares, at a discount as well. So we love involving the staff in the business as much as we can, and try and give them ownership in the business as well.
John Treadgold: What sets Huon apart from other key players in the industry?
Peter Bender: I think our main focus is on quality in everything we do. And that starts right at the hatchery end, right through the farming of the fish, the way we harvest our fish and process them. Everything is really around quality and innovation. We try to take the best ideas from around the world and then see how we can improve on them. And that’s what we’re doing in all areas of the business.
John Treadgold: You currently sell mainly to a domestic market. Are there plans to expand offshore?
Peter Bender: At the moment the domestic market’s taking most of the salmon we can produce. It’s been growing incredibly quickly in the last few years. Our domestic wholesale sales last year grew at 32 per cent by volume and 43 per cent by value. So it’s growing very quickly here domestically, so it’s difficult to provide too much salmon for the export market. But as we grow the business, we’re hoping we can still export some fish, because there’re certainly opportunities in Asia to do so. But at the moment the domestic market’s taking the majority of the fish.
John Treadgold: Finally Peter. What will Huon Aquaculture be focused on now that you are a public company, and where do you hope to see the Company at this time next year?
Peter Bender: I think it’s really working through our control growth strategy that we put in place about a year ago. We’re spending about $200 million over about a three year period on growing the business, putting all the things in place. Not to just expand, but to make the business more efficient. So that’s where we’ll be heading over the next 12 months.
John Treadgold: Peter Bender, thank you for introducing us to Huon Aquaculture and congratulations once again on your ASX debut.
Peter Bender: OK thanks very much John, that’s great.