Benchmark, the global aquaculture genetics, health and specialist nutrition firm, is coming off a radical year of restructuring, giving the group a new focus CEO Trond Williksen believes will lead to long-term growth.
At the start of 2020, Benchmark had come off a brutal year that saw it slide into red numbers, But while the figures weren't stellar for fiscal year 2020, the group's loss before tax from continuing operations of £2.9 million (€3.2 million/$3.9 million) was much narrower than the same quarter last year.
At the close of 2020, Williksen called the restructuring plan "ambitious and necessary," but said it has positioned the company for a return to black.
In the fiscal fourth quarter alone, the group made five divestments, including the sale of subsidiary FishVet Group (FVG) to Pharmaq, part of the global animal health company Zoetis, for around £14 million (€16 million/$18 million).
Benchmark's sell-offs brought the company £44 million (€49.2 million/$58.6 million) during the year and a much more promising liquidity position.
With the dust settled, Benchmark is now focused on three core areas: genetics, advanced nutrition, and animal health.
"We are an aquaculture biotechnology company by definition and will stay that way," Williksen told IntraFish in late January.
Investors have rewarded Benchmark's strategy by sending its London Stock Exchange-listed shares on a bull run since May.
Shares of Benchmark are now up over 30 percent year to date, dramatically higher than larger seafood industry rivals such as Thai Union (whose shares have fallen over 7 percent in that period), and Mowi (who has seen a nearly 12 percent slide). The group's market cap now stands at £391.5 million ($530 million/€442 million), putting it among the world's largest in the seafood sector.
Opportunities in focus
The narrower focus of the group doesn't mean fewer opportunities, Williksen said.
"The good news is that we have a lot of initiatives within the three core business areas to develop and the right thing is getting those delivered," Williksen said.
The company has added a number of strings to its bow over the years with a series of investments in sectors including research and development (R&D), and among the arrows of opportunity in that quiver is its strong position in the farmed shrimp sector.
While Benchmark is best known as the owners of salmonid genetics and broodstock groups SalmoBreed and Stofnfiskur, the group has significant exposure to the shrimp sector via Belgian group Inve Aquaculture, which it acquired in 2015 for $342 million (€312 million).
Shrimp was more impacted than salmon and other species and business areas, Williksen said, but he's positive about the sector long term.
"I'm very confident that the shrimp market will come back, maybe with a rebound of the foodservice market, while sticking with retail markets," Williksen said.
"When that is going to happen we don't know, so we are focusing on staying resilient in order to develop the business."
In January, Benchmark unlocked $450,000 (€372,000) in shares through the contingent consideration related to the acquisition of the aquaculture breeding programs owned by the Center of Aquaculture Research in Colombia (Ceniacua) in 2016.
Though "a lot of water has gone under the bridge" since that time, Williksen said that it's a sector that will get more attention from the group.
"It's one of our key priorities now to expand within shrimp and we are in the phase of commercially launching it as part of our business."
The focus on disease-resistance within shrimp genetics adds a new dimension to the industry, contributing to sustainability both economically and environmentally, Williksen said.
"I have huge expectations to what kind of potential we can add in that work on the genetics business," Williksen said.
Ground floor with land-based salmon
The explosion in land-based salmon farming projects is another area Benchmark is clearly prepared to capitalize on.
In November, Benchmark signed an exclusive agreement to supply Norwegian land-based salmon project Salmon Evolution with salmon eggs, just days after announcing a similar deal to supply US land-based salmon farming project AquaCon with ova.
Not even a month later, the company inked an agreement with Nordic Aqua Partners, a newly stock-listed group planning a land-based salmon farming project near Ningbo, China.
