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ALLIANCE Tuna International Inc. (ATII) disclosed to the Philippine
Stock Exchange that it will establish an Indonesian subsidiary to
gain access to that country’s fishing industry.
The company said its board authorized the
establishment of PT International Alliance Foods Indonesia (AFI),
which will buy the assets of PT Karabha Sakti, a tuna cannery in
Bitung, Indonesia.
The new unit will process canned tuna and export
its products. It will have an authorized capital stock of $2
million, and will be 70-percent owned by its Philippine parent.
“The investment in Indonesia insures a steady
access to raw material supply and give ATII an entree into the
world’s most fertile fishing grounds. The purchase will enable
ATII to expand its operations and marketing reach thus ensuring
future growth and profitability,” the company said.
In March, the firm announced its plan to buy 70
percent of PT Karabha Sakti for $722,400 while the rest of the
Indonesian firm would be owned by a group led by CV Wailan Pratama.
ATII also plans to inject $900,000 for the cannery’s capital
expenditures this year, including the modernization of its
processing plant. The 60 metric ton a day cannery—with another 20
metric ton a day capacity for frozen tuna loins and other marine
products—would start operating by August.
ATII is mainly into processing, canning, and
export of canned tuna, and ships its products to Europe and North
America. Both markets account for more than 84 percent of the
company’s export sales.
It is a “private label manufacturer,” which
means it processes and cans tuna for its clients using its
clients’ brands. To add to profit margins, ATII processes
by-products and scraps into fish meal and sells them to Philippine
feed millers.
At end-March, the company’s profit fell 73.3
percent to $174,047 or $0.0003 per share year on year while its
profit margin slipped from 7 percent to 1.9 percent due to lower
gross profits as a result of higher fishing costs.
Gross profit for the first three months this
year dropped 42 percent to $672,811 as fish prices “reflecting the
general trend of higher commodity prices the world over, reached
30-year highs,” ATII said. The prices were “extremely
volatile” during the period and suppliers held off selling until
these have settled, pushing prices higher and cutting into the
company’s profit margins.
Operating expenses declined 4 percent to
$429,285 from a year ago while other costs like bank charges surged
126 percent to $38,084.
Operating income jumped 17 times to $15,059,
while interest expense rose 46 percent to $46,454.
-- Likha C. Cuevas-Miel
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