Seafarms Group chair Ian Trahar digs deep to boost stake in prawn producer
The chair of Australia’s biggest prawn farmer has tipped another $5.6 million in to the firm, which has its main outpost in Queensland.
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PRAWN FARMING
Ian Trahar has dug very deep to prop up the bottom line of Australia’s biggest producer of farmed prawns.
The chair of listed Seafarms Group splashed out $5.6 million last week on shares in the loss-making firm, boosting his stake as the biggest individual shareholder to 28 percent.
His big buy accounted for nearly half of the firm’s most recent capital raising, which pulled in $12.5 million from sophisticated and professional investors.
Although headquartered in Perth, the aquaculture company has been active since 1988 in north Queensland, where it flogs the well-known brands Crystal Bay Prawns and Crystal Bay Tigers.
It’s based in Cardwell and Ingham, where it has 148 ponds spread out across 160 ha for the raising and processing of all those little critters.
Surging demand, both domestically and from overseas markets, has resulted in a 43 per cent compound annual growth rate over the past four years. Yearly output recently tripled to 1800 tonnes, although that’s tipped to fall to about 1450 tonnes through mid-2021.
Changes wrought by the global pandemic may also help spur sales. Consumers are likely to seek out clean and green sustainable alternatives to foods linked to so-called “wet markets”, where COVID-19 is thought to have originated in China.
“We believe Seafarms is well-positioned to benefit greatly in a post-COVID world,’’ the company said last month.
“Safe, clean food with impeccable provenance, reliably supplied will not only continue to be in high demand but will attract a price premium.”
AMBITIOUS PROJECT
Seafarms also has a much more ambitious undertaking in the works to seize a bigger part of the world’s aquaculture market, estimated to be worth about $US200 billion a year and growing.
The company hopes to kick off work shortly on a $1.5 billion land-based scheme in northern Australia that would create one of the world’s biggest prawn aquaculture projects and generate about 1500 jobs.
When complete, ponds spread across 10,000ha will churn out about 200,000 tonnes a year of top-shelf Black Tiger Prawns solely for export markets.
Dubbed “Project Sea Dragon,’’ the shovel-ready initiative has been the subject of eight years of research, planning and development at sites in both the NT and WA. That’s not to mention more than $110 million of investment poured in already.
But it’s still not a done deal. International bankers are continuing to run their ruler over the project and COVID-19 has obviously thrown up some hurdles.
The wobbly state of Seafarms accounts might also be giving some tirekickers a reason to pause.
It suffered a $12.2 million net loss in the December half, prompting auditors to wheel out that standard caveat about the “material uncertainty’’ hanging over the company’s ability to keep trading.
That setback came on the heels of a whopping $31 million loss in the last financial year and $20 million of red ink in 2018.
ON THE HOUSE
His “craft beer with a conscience’’ has already raised money for the Great Barrier Reef, marriage equality and the RSPCA.
Now Good Beer Co boss James Grugeon is doing his bit for those on the frontlines battling the pandemic.
The Brisbane entrepreneur recently rustled up more than $52,000 to shout about 2600 essential workers a 4-pack of craft coldies.
Now he’s teamed up with investment group Founders First to churn out a limited edition case of 16 different craft brews as part of his “A Good Beer Always Helps’’ campaign.
A percentage of every sale at BWS and Dan Murphy’s stores will help the effort, with Grugeon now aiming to send a 4-pack to about 10,000 vital workers to thank them for their efforts.