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Mary-Jane

Organic cod farm in Shetland goes into administration...

...owing £40 million. It was the world's first organic cod farm.

"It was the perfect product for modern green consumers. For the first time, they could buy Britain's favourite fish - cod - with a clear conscience. It even had a smart, sassy brand name: No Catch. This cod was ethically farmed in the cool, clean seas off Shetland, and it was organic.

On its launch three years ago, No Catch cod, the world's first organic cod farm, was hailed as the answer to the environmental crisis brought on by the perilous fall in cod numbers in the North Sea. Leading chefs in London spoke warmly about its firm flesh and its "really nice white flake".

No Catch - which was snapped up by Sainsbury's, Tesco and Carrefour in France - came with a bold promise: it could eventually produce 30,000 tonnes of farmed fish a year, enough to meet 10% of the UK's insatiable demand for cod, despite its premium price.

But now the company behind the organic cod, Johnson Seafarms, is in crisis and its future unclear. Last month, the firm was put in administration and its directors sacked after running up debts of £40m in roughly two years. Yesterday, 14 of its workers were made redundant as the administrators began cutting the company's soaring costs."

Rest of the story here in today's Guardian:
http://www.guardian.co.uk/environment/2008/mar/06/environment.ethicalfishing
thos

wrote:
One of those former directors, Karol Rzepkowski, was often seen driving an Aston Martin,


Oh good, we can blame the Poles for that, too.
Mary-Jane

thos wrote:
wrote:
One of those former directors, Karol Rzepkowski, was often seen driving an Aston Martin,


Oh good, we can blame the Poles for that, too.


Rolling Eyes Laughing
crofter

I wonder if this has anything to do with the recovery of wild cod stocks. When "No catch" began producing farmed cod, the accepted wisdom was that wild cod were in terminal decline. Now, a few years later, the trawlermen are dumping more dead cod back into the sea than they are allowed to market. Although poor cost control and a huge marketing budget are being suggested as possible factors, I think the real reason is lack of investor confidence. It seems likely that it will be sold reasonably soon which is good news for (some) employees, at least.
dougal

Quote:
Cod, the firm's directors discovered, is a difficult fish to farm. Unlike salmon, now grown in vast quantities across Scotland in just 22 months, cod take up to three years to reach maturity. With the extra costs of using organic techniques which ban routine use of chemicals and medicines, or artificial feeds, and the heavy costs of opening a new hatchery and processing plant, No Catch cod quickly became very expensive indeed. With fish fed on choice offcuts of mackerel and herring, its fresh fillets were selling for more than £20 a kilo - roughly 50% more than wild-caught cod on supermarket shelves and just as pricey as wild salmon.

The firm's chief problem was that its money supply was cut off before its fish were old enough to sell - a decision taken by one key investor because of the credit crunch, said one source yesterday. But other local sources claim many of the fish being harvested are not in prime condition and can be used only to make No Catch fish fingers.

And somehow they're £40 million down in just a couple of years...
One wonders how much they sold at £20 a kilo.
vegplot

Sounds like greedy directors.
dpack

it is a common mistake to take future sales as cash ,i feel sorry for the staff
crofter

dougal wrote:

And somehow they're £40 million down in just a couple of years...


I think about half that figure was used to buy the site licences, some equipment, boats etc. Then they bought a hatchery, to produce their own supply of juveniles. Then they bought a processing factory. They spent a lot on marketing, and brand promotion. There were 130 staff. Fish farming is a long term investment; feeding the fish is expensive and you have to wait 3 years for the sales of the first generation to begin. Meanwhile you have got year classes 2, 3 and 4 to feed as well...
Shane

dougal wrote:
Quote:
The firm's chief problem was that its money supply was cut off before its fish were old enough to sell

One wonders how much they sold at £20 a kilo.

None, presumably!
dougal

There is the reported "debts of £40m" but also of having had an investment of £25m from a City firm.

So is it £40m or £65m they have burned through?

They would seem to have had some fish to sell.
Otherwise, wouldn't the massive marketing campaign seem to be rather obviously like throwing money away?
Its just surprising that people would chuck this sort of money at a business trying to sell farmed cod for the same ultimate retail price as wild salmon. That doesn't sound like a likely runaway success to me.
crofter

dougal wrote:

So is it £40m or £65m they have burned through?

They would seem to have had some fish to sell.
Otherwise, wouldn't the massive marketing campaign seem to be rather obviously like throwing money away?


£40 million. They did have fish to sell, but I think they were trying to step up production with each input of juveniles, so the income from the (relatively small) first inputs is not enough to finance the growth of the (successively larger) later inputs.
gil

crofter wrote:
They did have fish to sell, but I think they were trying to step up production with each input of juveniles, so the income from the (relatively small) first inputs is not enough to finance the growth of the (successively larger) later inputs.


Oh dear. I think there's a useful lesson there for us small producers trying to expand.
crofter

gil wrote:

Oh dear. I think there's a useful lesson there for us small producers trying to expand.


Aye, don't rely on your creditors!
gil

Indeed. And more specifically

crofter wrote:
trying to step up production with each input of juveniles, so the income from the (relatively small) first inputs is not enough to finance the growth of the (successively larger) later inputs.
dougal

crofter wrote:
They did have fish to sell, but I think they were trying to step up production with each input of juveniles, so the income from the (relatively small) first inputs is not enough to finance the growth of the (successively larger) later inputs.


It is interesting to see such a case of "overtrading" right on the heels of yesterdays discussion on cashflow management...
crofter

More redundancies
http://www.shetlandmarine.com/2008/04%20Aquaculture/more_jobs_go_at_no_catch.htm
seems they have paid off the filleters and are now selling whole cod to processors.
crofter

I wonder if this has anything to do with the recovery of wild cod stocks. When "No catch" began producing farmed cod, the accepted wisdom was that wild cod were in terminal decline. Now, a few years later, the trawlermen are dumping more dead cod back into the sea than they are allowed to market.


Sorry to trawl up another old thread. From 2008. How much cod has hit the seabed in the meantime?
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