Hans J Marter

21 June, 2007

SHETLAND Catch, Europe's largest pelagic fish processor, is forming a joint venture with the Norwegian seafood giant Austevoll Seafood ASA in a bid to secure its long term future.

Shetland Catch and Austevoll yesterday (Wednesday) jointly announced that a letter of intent had been signed which would see Austevoll buy 50 per cent of the Lerwick firm's shares.

At the same time, existing shareholders Lerwick Port Authority and Shetland Fish Producers' Organisation are also increasing their capital investment in the company, although their relative share will reduce.

No detailed investment figures were released.

Part of the deal will see a new joint marketing company being formed which will give Shetland Catch access to new markets.

Yesterday morning, prior to a board meeting in the afternoon, Shetland Catch's 65 permanent employees were briefed by managing director Simon Leiper.

Mr Leiper said the deal would have no impact on staffing and the company would continue to operate as an independent company.

The move is seen as a major step towards consolidation of the pelagic processing industry in the wake of the European Commission's investigation into over quota fish landings and the subsequent payback regime imposed by Europe earlier this year.

As a consequence, pelagic fish processing companies in Scotland, including Shetland Catch, are finding themselves with a large 'over capacity' as less fish is being landed.

At the same time, other pelagic outlets are former larger partnerships, such as the Norwegian companies Domstein and Global Fish, in a bid to reduce costs and increase their market shares.

Shetland Catch chairman John Goodlad said the company had been on the lookout for a partner for some time and regarded itself as very fortunate to have linked up with Austevoll.

Mr Goodlad said this was not another Norwegian takeover of a locally owned company, but a necessary step to secure the future of the isles' largest privately-owned employer.

"There is an enormous process of consolidation going on in the various sectors of the seafood industry. We have seen the numbers of boats being reduced, we have seen the same in the salmon farming industry, and in the pelagic processing industry this process has now started," he said.

"Although Shetland Catch is big in its own right, we are not big enough and we have been looking for a strategic partnership for some time.

"The Austevoll option for us is the best bid. It is a similar kind of company. We are very excited about the idea of marketing our products under a single banner. That will give us great strength in the market place, which is essential going forward."

Austevoll Seafood ASA is a vertically integrated fisheries group operating in pelagic fisheries, fishmeal and oil production, processing of pelagic products for consumption, and sales in Norway, Europe and South America.

Based on the small island of Storebø, off the west coast of Norway, the company is registered on the Oslo stock exchange.