Coronavirus – News

The following information has been developed for Huon Aquaculture employees. With the continuing spread of the Coronavirus (COVID -19) around the world it is important that we continue to stay safe, protect each other and take sensible precautions.  We also want to assure you that we are taking proactive measures to ensure a safe working environment.

Thursday, 28 May – COVID-19 business update 

Hi all,

Another update for you regarding the impact of COVID-19 on business:

With the easing of restrictions, sales in general have started to improve, with domestic sales in both wholesale and retail improving week-to-week. Exports are also now increasing, with much higher volumes being sold compared with a month or so ago.   Unfortunately, most of the extra volume has come at the expense of fetching a strong price for our products. The global food service industry makes up around 45% of the global salmon market share, and with the collapse of that part of the market through the lockdowns, more fish were being sold into a smaller market thereby reducing the price per kilo.

The flip side is our fish have performed extremely well over the past year, which has reduced our cost of production per kilo while giving us more tonnes to sell. In fact, the fish we are currently harvesting are the biggest we have ever harvested at this time of the year. This has allowed us to start selling much earlier in the season into markets that require larger sizes. The average harvest weight is nearly 40% bigger than at the same time last year, and more than 15% up on our previous best year.

The good performance can be attributed to bigger smolt, a good summer, cleaner nets, less bathing and continual improvements to our feeding system. Additionally, mortalities are low for both the 19YC (almost 50% less than the 18YC at same time last year) and the 20YC.

The new smolt transfer pipe at Whale Point is performing extremely well.  The best transfer day we have had so far is 90 tonnes being discharged onto the Ronja Storm in 7 hours. We also predict that we will be able to transfer two or three full pen loads (around 500,000 fish) of the smaller spring smolt in a single day. The new system is set to save the company $160,000 in truck expenses alone, not to mention the reduced mortalities (7-day post transfer data is very encouraging).   In other good news, we also have a new vaccine for POMV which is being given to all the smolt in the 20YC before they go to sea.

The Ronja Storm has been settling in extremely well since its arrival in February and has performed several bathes well over 700 tonnes in one go – the Ronja Huon would have taken three bathes to do the same tonnage.  The addition of the Storm in our fleet will enable us to keep on top of bathing in the future and allow us to more selectively and strategically bathe pens.

It has been a busy time for our Parramatta Creek and Sydney factories. Both factories have really stepped up to the plate with the processing of new products, dealing with varying volumes, as well as coping with very strict biosecurity and hygiene measures.  I am sure everyone understands the significant disaster we would be facing if COVID-19 entered our factories.

As we look towards the end of May we’ve seen a significant volume uplift, with the business on track to process 50% more HOG tonnes than we forecast just a few months ago. The domestic wholesale channel is thankfully starting to come back to life but limited food service is still leaving a hole in the market. The export market has shown signs of recovery and Federal Government assistance is also delivering benefits for us as we see freight rates in international markets begin to come back down. New retail contracts with Coles are also starting to deliver volume in the MAP space, with three marinades launching in May and the bulk skin-off plain four-pack launching on 1 July.

Overall, we are in a better position than we were a few months ago. However, our profitability will struggle for some time as it will take a while for prices to return to pre Covid levels as it will take time for customers to return to restaurants in the same numbers as before and, sadly, some restaurants may never open back up.  We must continue our efforts to be as efficient as possible while growing the best salmon and ocean trout in the world in order to supply the markets as they come back on line.

Everyone, across every part of the business has coped magnificently with the challenges of late and it is appreciated.  For those of you working from home, your managers (in conjunction with WHS team) will be talking to you over the coming few days about the company’s plan to transition (where possible) you from home to your usual workplace.  Now that public health restrictions are being eased, the company’s preference is for our people to be based at their approved place of work.  There is collective efficiencies to be gained from teams working together from their usual place of work.

As always, we will provide a safe, appropriate workspace for everyone, which complies with WorkSafe Australia’s COVID -19 Safety Plans, but which also allows us to continue to be the business leader we are – there is no doubt that working arrangements post COVID will be different but in order for the economy to recover we need to collectively and safely return to our pre-COVID working arrangements.

Cheers,

Peter

 

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