All eyes on Fishcor quota

Once a crippled State-owned entity, Fishcor has resurged to becoming a profitable entity on the back of a horse mackerel quota allocation that has brought in much-needed revenue.

Ten years ago though, the company was on the brink of collapse under then managing director Ronnie Coppin.

Today, the company boasts a modern fleet, a healthy balance sheet and is in the process of completing a new on-land processing plant.

The company's fortunes turned around for the better, perhaps on the back of good corporate governance frameworks introduced, or the allocation of a lucrative horse mackerel quota which raised eyebrows. Its quota represents 16% of the total allowable catch (one out of every seven fish caught) while other companies must scramble for the leftover allocations, and at one stage led to an Anti-Corruption Commission investigation of fisheries minister, Bernhardt Esau.

Going by its profile in its annual report, Fishcor is a business focused on rock lobster and hake. But the company's fortunes were bolstered by the allocation of a lucrative horse mackerel quota by fisheries minister Bernard Esau.

For the financial year 2015/16, Fishcor reported that a large part of its income came from the outsourcing of its horse mackerel and hake quotas, generating in N$80 million and N$17 million respectively.

The boost is evident and reflected in its financial results with Fishcor reporting a profit of N$40.6 million and a growth in profitability of 46%. Fishcor's consolidated income was approximately N$299 million.

Ironically, the High Court in 2014 ruled that Esau's horse mackerel quota of 10 000 metric tonnes to Fishcor was illegal.

Judge Shafimana Ueitele in his judgement at the time said the allocation was unlawful as Fishcor was not a horse mackerel fishing rights holder.

The company also got a windfall recently with another allocation of horse mackerel quotas valued at N$1.8 billion over a 15-year period, it was reported.



Justifications of the quota allocation

The guaranteed quota is not to favour Fishcor but to ensure that the government achieves its objective of sustainable job creation and value addition through the onshore processing of horse mackerel in line with National Development Plans. This is in line with one of the objectives of Fishcor as contained in the Fishcor Act.

According to the act, Fishcor's role is to: “Undertake research or other projects and to carry out such other activities for the development of the fishing and marine sector, or any related sector, as shall be agreed from time to time with the minister or with any other person or body, local or foreign, provided that the corporation shall be compensated for any costs incurred in undertaking or carrying out any such activities.”

According to Mike Nghipunya, Fishcor's CEO, it is common knowledge that most of government projects - be they directly managed by government or by public enterprises - fail because of no resources or a lack thereof.

“As part of our project management understanding, Fishcor made it a condition in cooperation to have a guaranteed quota for the duration of 15 years for the project life which can also be extended for another period as and when agreed by the parties,” he said.

Nghipunya also said that Fishcor's allocation was from the non-commercial horse mackerel stock.

“We are carrying out a government project for value addition and job creation. Our allocation is from non-commercial total allowable catch. The commercial total allowable catch is still very significant at 84% of the overall total allowable catch,” Nghipunya said.

According to him, the allocation of the quotas was also to encourage horse mackerel right holders to invest in land-based operations for further value addition regarding horse mackerel.



Casualty of favouritism

Its success has however affected Namibia Stock Exchange-listed Bidvest Namibia which placed its fishing division on the market last year for an undisclosed fee.

Also last year, while commissioning trawlers procured by Fishcor, Esau said: “I do not regret allocating the bail-out quota, this is a state company and it must be supported. As you can see, the company is back on track and the people are happy, those that are unhappy are the ones that monopolised the industry for years.”

Bidvest recently announced that it would be selling its fishing division owing to its reduced quota allocation by the ministry of fisheries. Bidvest had also, before these developments, planned to construct its own land-based processing plant for further value addition regarding horse mackerel.

Bidfish's former managing director Jan Arnold had on two occasions laid out grandiose plans for its land-based operations, the first time at the results presentations for its half-year financial results in 2014.

“Management has concluded the initial feasibility study to convert the current horse mackerel fishing operation to a shore-based processing facility.

“The board has resolved to proceed with the environmental impact assessment and detailed design for the civil works,” Arnold said in 2014.

According to him, work on the much-anticipated assessment is expected to start as soon as possible while construction of the plant will be financed through its own funds as well as external funding.

About the feasibility of the entire project he said “We paid a lot of money to get to this answer,” suggesting that the plant could be a success as Bidvest attempts to compete in the west African canned horse mackerel space against Chinese entities. Bidvest is hopeful it will be able to secure an optimal production input from local quota holders and its own quota allocation for the planned processing plant.”

Bidvest has in the meantime announced that it will be selling its fishing operations.

OGONE TLHAGE