How the Hake Industry in South Africa Managed to Survive a Challenging 2020
Activities across the entire value chain of the hake industry in South Africa have been affected by the COVID-19 pandemic and lockdown regulations. However, as a business with a long and stable history dating back to 1964, Sea Harvest has shown why it has become a household name.
The Group proved to be exceptionally stable, regardless of the challenges brought about in 2020, as evident in the ability to have grown its revenue by 10%, bringing it to R4,4 billion. The Group’s headline earnings grew by 3% to reach R421 million for 2020. To top it off, its earnings per share showed a 3% increase, resulting in 154,3 cents a share.
What brought about the growth amidst a worldwide crisis?
Felix Ratheb, CEO of the Group, stated that the fishing operations in Australia and South Africa played an important role. According to Ratheb’s statement to the press (February 28, 2021), the diversified nature of the Group’s fishing operations, which include the supply of a wide range of products to as many as 36 countries worldwide, played an important role.
With thousands of people in some of the economically-challenged towns of South Africa employed within the hake industry, the growth results are a beacon in the dark storm. The Group’s superb mix of markets in the retail, hotel, restaurant, and catering industries, has made it possible to ride out the storm. Many of the products, which would normally have gone to hotels, restaurants and catering operators, were sent to the retail market. This forward-thinking strategy made it possible to save jobs.
Solid strategic management and exceptional flexibility made it possible for the Group to achieve a 5% operations profit (R629 million). This superb profit came amidst challenges such as a drop in productivity, marketing mix changes, increase in selling expenses and higher distribution costs in the period.
As the Far East markets could not be reached during the lockdown period, the aquaculture segment did face a tremendous challenge. Although business was lost because of it, the Group managed to get through it. As with the rest of the hake industry in South Africa, the Group benefited from government intervention.
Felix Ratheb stated that without the support from the Department of Environment, Forestry & Fisheries (DEFF), the hake industry would not have been able to perform as it did during this period. Due to the fishing operations noted as one of the essential services, operations could continue. This enabled the prevention of large-scale job losses within the hake industry of South Africa, while it gave food security during the pandemic & lockdown period.
With the health & safety of workers and the public always a priority within the hake industry in South Africa, the labour unions, role players in the industry and DEFF worked together to put the necessary safety precautions in place. This close collaboration and DEFF support during an unprecedented difficult time, played a significant role in the prevention of job losses. According to Ratheb, not even one job was lost within the hake industry due to the pandemic.
Also during this lockdown challenging time, the demersal hake fishing industry in South Africa made headline news when it was Marine Stewardship Council (MSC) recertified until 2026. With the MSC certification considered as the epitome of sustainability certifications for fisheries around the globe, the hake industry has shown its commitment to responsible fishing practices, sustainable employment and ongoing protection of food resources. Once again, the close collaboration between industry players, DEFF and the scientific community made it possible to achieve this prestigious goal.
The certification shows that the hake resources are responsibly managed. Having this certification gives the hake industry in South Africa a strong foothold in the international market.
It’s not just on the fishing front where the hake industry performs well. The Sea Harvest Group has proven its ongoing commitment to economic transformation by keeping onto its Level 1 B-BBEE status. The Group spent R463 million in the period on SMMEs and R1,1 billion with 222 majority black-owned supplier firms.
The hake industry in South Africa has been proven to be resilient and flexible enough to take on the roughest of economic seas. It continues to be an important role player in food security, and with the MSC certification, it has also shown its commitment to sustainability and future food security. Read more about this in the press release on the 2020 FYE results.