Q1. The Fiji Fish
Marketing Group Ltd. exists since 1979 traditionally
focused in fresh whole fish exports. What have been
the historical key development towards becoming
one of the leading exporters of fish in the Pacific?
A1. When we first set up in 1979 there
were hardly any fresh fishing company here. We
were originally set up to catch skipjack to supply
the Levuka canning factory. It was frozen canned
Tuna. The fresh fish business did not really start
till 1987 and it was very difficult because there
were not many developed fresh fish business in
the world at that time and because the yellow-fin
tuna from the Pacific was not highly regarded.
They were looking for blue-fin tuna which is only
found in cold waters. The key moment when the
industry became to grow happened almost overnight,
in twelve months. I was born here but lived and
fished in Australia for 14 years, I started fishing
lobster and then I came back from Australia in
1979 with one boat. Nothing was going on in Fiji
and I saw an opportunity as there was no fishing
industry here apart from some Taiwanese boats.
There was no domestic fishing at all in 1979.
With that boat I came back I started catching
skipjack for frozen fish cans. From 1979 to 1985
we supplied the cannery factory. In those years,
the Japanese only wanted blue fin tuna and were
not interested in yellow fin and other species.
From 1985 to 1987 a number of events happened.
The 1987 coup was the turning point of the industry
here. It was the catalyst that turned the whole
thing around. Before the coup, the Fiji dollar
was ridiculously strong, even stronger than the
US dollar so exports could not get returns. Also,
there were no direct flights to Japan and the
yellow fin tuna was not accepted in that market.
All of a sudden 1987 came, Air Pacific started
with direct flights to Japan at a reasonable cost,
the Japanese were becoming interested in accepting
yellow fin tuna and then the coup. The coup brought
Fiji to its knees and the Fiji Dollar crashed
by 35%. Overnight, it was a viable thing to export
and our debt was also reduced by 35%. As I have
said many times over the years, there had been
little movement in the fishing industry and we
had quite a big movement. We took the risk early
on when everybody set back, we developed other
markets like US and increased our fleet. By the
end of 1987 I had three boats, a few years later
I had nine and today, with our boats in joint-venture,
we have about 56. But all of those 56 boats came
from companies that set back in the wrong moment.
We have been the only company operating here for
a long time and I get a bit of criticism because
they say that we have monopolized the industry.
We are not a monopoly, we dominate the sector.
By the time everybody else started to get into
the business we already had the boats and the
knowledge. As a result, today we do 80% of the
export of fresh tuna and we hold about 80% of
the tuna fishing licenses.
Q2. Could you tell us what is the shareholding
structure of Fiji Fish Mk. Group Ltd?
A2. I own the whole company. I have no plans
to float it on the stock exchange as we are having
too much fun now. The company is still growing substantially
and there have been lots of requests for us to float
shares. Maybe now that I am starting to be more
interested in doing a few other things it is possible
that within the next year or two we will look at
floating either the whole company or just part of
it. We have 28 boats in joint-venture with a Taiwanese
company. I own 30% of these boats and we have been
working together for the last ten to fifteen years.
The Taiwanese want to buy into the business but
I am afraid I am a bit of a dictator. I have never
worked for anybody in my life and I do not like
reporting to any board, I do not like explaining
my decisions. If I make the decision that is it.
I am not a board person and I would not like selling
shares and then having people looking around at
the way I do things.
Q3. How did the collaboration started and how
is the situation right now?
A3. At that time I had fifteen boats of my own
and we needed to increase our production as the
market was crying out for our product. They first
contacted me and we sent a couple of boats down
to have a look. The Fiji regulation required 30%
of shareholding by the local partner. I would not
recommend any change to that because if the shareholding
gets diluted they do not have that big interest
anymore. With 70% they are still on full power.
We provided the infrastructure: the facilities,
freezer docks, fishing licenses, access to fishing
grounds, etc. It has worked very well for all of
us, we increased the production so their first two
boats were successful and that particular company
have about 18 boats with us now and about two or
three individual boats.
Q4. What is the situation at the moment concerning
the future of the fishing industry in Fiji?
A4. There is no room to increase production.
This is the time for consolidation, this is the
moment to start adding value, to start changing
the products. We have to increase the value of our
products because the fish catching is at its maximum
level now. The last fifteen years of the fresh tuna
business was basically taking the whole tuna, putting
them in a carton and flying them. That is no longer
reliable, airfreight rates have gone through the
roof, they have increased about 80% in the last
twelve months in the whole region and that is affecting
us. Freight rates have grown beyond the point where
it is liable to send the fish. 80% of our production
now can not afford to fly, only the high quality
products, which is 20% of the total. So we are building
new factories here that will put the product in
a box, the fish will be cut here and tuna loins
will be transformed in various shapes and forms.
We are moving rapidly towards getting away from
selling more fish. We have done a joint-venture
with a Japanese company and the new factory equipment
is on its way. They have about 3,000 outlets in
Japan for finished products, what you see in supermarkets.
They have the market and we have the product so
we cooperate, we will produce that cut product for
the distributors. We are doing a processing plant,
an investment of around $1 million USD, a small
one to start with, it is the pilot plant. We will
run it for a year or so and if it works ok we will
proceed with the factory of about $10 million USD.
Depending on what happens we will see how we produce
or how we cooperate further more. We also have another
project which is to be 50% of our production: Albacore
tuna, a different tuna category, a frozen product
for canning. Albacore is low level in the fresh
market but very high valued in the canning sector.
Its four times the price of the yellow fin in the
canning and half the price of yellow fin in the
fresh fish market. We have two strategies, the yellow
fin will go to Japan while the albacore (…)
we do not want that product leaving Fiji. We are
sending huge volumes of albacore to Samoa at the
moment so we are loosing the canning business here.
We supply around 40% of PAFCO's production for instance,
which is better than sending it to Samoa. But we
want to add value as it will be more profitable
than simply taking the albacore and put it in a
can. There is a whole variety of different flavors
that suit different markets, The Japanese, the American,
the Australian, etc. so there are various things
we can do to maximize the value of our product.
The strength of this industry is in the fresh chill
area not in the frozen one. The whole world operates
in the frozen area and we do not want to compete
with the whole world. Our clients are in the fresh
chill and that is where we will stay. That is our
mainstream. The fresh chill can only travel a limited
distance but now we are coming up with a system
that allows us to fish in Vanuatu, Solomon and Tuvalu,
our immediate neighbors. The Airlines have understood
that they do not make money out of freight unless
you are a dedicated air freight company. They are
charging around $9 FJD per kilogram and, in the
fishery business, anything more than $2 FJD to $3
FJD per kilogram is not viable. We were very close
to buying our own cargo planes but every way we
looked at it was not worth it. The aircraft we send
to Japan or to the US have to come back empty as
there is no cargo back to Fiji so that doubled the
cost straight away. A freight aircraft to Tokyo
must have about 100 tones a day and that is impossible
for us. The airlines are suffering all over the
world, they need to survive. |
Q5. You defined the
coup of 1987 as a turning point in the history of
Fiji Fish Marketing Group Ltd. What happened in
the coup of May 2000?
A5. We also doubled our size in that event.
It was not very nice to see every young industry
crash and burn. The tourist industry crashed and
burned and almost the garment industry as well.
It was quite a reversal as compared to what happened
in 1987. The only supporting industries in Fiji
were the exporting industries so the government
jumped in and told us that the fishing industry
had to carry the burden and asked us what could
they do. Tax free incentives and things like that
were put in place as everyone was panicking. We
bought all sort of things and we had a major expansion.
Q6. What ahs been the evolution of your turnover
since 1999?
A6. From 1987 to 2000 there has been a steady
growth but in year 2000 we had a massive jump. A
turnover of $40 million FJD in 2000 and now a turnover
of $70 million FJD in 2002. We expect a revenue
of $90 million FJD in 2003. There has been a big
jump but I would remind you here that there are
dark clouds ahead. There are issues with over fishing
and it is going to be a tough period. There is going
to be a lot of catching in the coming years and
if you look out the window, you can see five boats
in the harbor and down town there are about 30 waiting
there. We have no sympathy for these guys as these
are the ones who jumped in lately. They are speculators,
they do not really know the business as they jump
in when things are looking good and jump out when
things look ugly. Their timing is wrong.
Q7. Your vision is "Keeping Fiji working"
and this company is proud to contribute to Fiji's
economy and its people. In what ways?
A7. We employ about 1,000 people directly. In
other countries such as Australia and New Zealand,
they measure the spin of benefits by eight to one
so we would be involving around 8,000 people in
Fiji. We contributed very heavily to the national
air line too in freight cargoes as we have spent
around 6.5 million FJD mostly to Air Pacific. Fuel
suppliers, repair and maintenance, manufacturers,
plastic packing, etc. There is a substantial spin
of benefits we create.
Q8. What is the potential of Fiji concerning
the Fishing industry?
A8. I think the government is dreaming a little
bit as fishing in Fiji is not the same all year
around. It will be a major contributor but their
ideas of billions of dollars is not quite realistic.
However, there is no doubt that the sugar industry
will never be what it has been before. Tourism will
be the number one but the fishing industry has the
potential to be the second or third largest sector
in Fiji. There is no room for expansion in the catching
but there is plenty of room in the value added side
of the business. There are two fisheries here that
have the potential to grow significantly the but
we have already said to the government that we want
to reserve fisheries and we do not want to introduce
foreign boats because that is what we have in the
Pacific Islands. We do not have much else than fish
and we have got to maximize it. The Pacific Island
have coconut trees, fish and tourism. The Pacific
islands have got to learn to cooperate and maximize
the fishing industry. We have made suggestions that
all fish caught in the region should be processed
in the region. Let companies come to the region,
set up the canneries and be part of the processing.
We do not have oil, we have the fish so we will
push in hard for it. Processing companies can bring
in their expertise or financial strengths from Asia.
Those people who want to come and join with us can
set up canneries and be part of the future of the
Pacific Tuna Fishing industry. We encourage them
to do so.
Q9. Increasing FDI is a must for Fiji. You
are a member of Prime Minister's "Think Tank".
What does the country need to do in terms of rebuilding
its International image?
A9. I think that people in Asia and the whole
world need to know even though Fiji had a couple
of coups in the past they were not serious coups
concerning shooting and killing. It was not even
close to what happened in East Timor and other Asian
countries. It was nothing more than an afternoon
BBQ. The Pacific people have an awesome capability
to rebuild things. We have seen many other so called
civilized countries who have been fighting each
other for a few hundred years. If you look at Middle-East,
at Bosnia, etc. We do not do bombing and those kind
of things in Fiji. We who live here have confidence
to reinvest. We could easily run away but Fiji is
really a peaceful place compared to the rest of
the world and if there is have a bloody war raging
in the Middle-East we are still fishing here. The
Pacific region is a safe haven because the resources
are real. They are not numbers, stock markets or
manipulation of numbers, our resources are real,
real natural resources and real money to be created.
People joining that will make money.
Q10. Our readers always like to know more about
who is behind a company or an institution, could
you tell us more about your professional and personal
background?
A10. I believe that life is too short. There
are so many things that I have yet need done. I
am 59 years old and I have been fishing since I
was 18. All I know is about the fishing industry
and the sea. I have been through it all and I can
see what happens now and what is going to happen
tomorrow. I was a chief captain and a chief Engineer
so all the things that happens on my boats I know
about and understand it very well. One of the reasons
many other companies fail is because their principals
are not from the industry, they are investors and
do not understand what is going on. The sea has
always been my life. I love making a living from
the sea. If I am not working I am fishing, diving,
sailing or flying over it. I am competitive by nature
and in fact this coming South Pacific Games I am
the only competitor for Fiji still going and who
also was in the first South Pacific Games in 1963.
Winne cannot be held responsible for unedited
transcription.
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MR. GRAHAME
SOUTHWICK