B&D Trawling goes fishing for other prospects as conch disappoints
Conch sales were disappointing for B&D Trawling in the past season, but CEO Roderick Francis expects to make up some of the lost ground from sea cucumbers and live lobsters as alternative sources of revenue.
The company began making the switch to other seafood as mainstays in 2016, which Francis described as a year of transition. That year, the company cut back on the production and sale of conch "because of non-competitiveness due to taxation and new licences issued, which had a negative impact on the market," Francis told the Financial Gleaner.
B&D then began converting production from frozen lobsters to live lobsters. He said that the company began supplying live lobsters to Hong Kong and Australia within the past two years and will now add mainland China to its market. In the week starting September 9, it will be shipping 20,000 pounds of live lobster per week directly to China.
B&D Trawling, he added, has perfected the processing of sea cucumbers, a fisheries project pioneered in the late 1990s, and is now expanding exports not only to China, but also, Japan, Taiwan, and Canada.
"Revenues from this product will more than cover our reduction in exports of conch," Francis said.
As a private business, B&D does not disclose its earnings, but Francis said that the company saw a 20 per cent dip in revenue last year. He expects B&D to recover lost ground from the "investment and transformation" of its entire lobster supply chain to focus on live lobsters.
"We are already seeing production rise by 30 per cent. Our prediction is for robust performance this year and bigger profits in 2019 as our new business strategy consolidates," he said.
Francis said that the returns from conch began to dwindle after the imposition of a cess on exports that served to erode comparative advantage against other conch-producing countries. The business also suffered from heavy fuel taxes.
"Our competitors are not subject to the heavy fuel taxes that we face," said Francis.
"This is the major impediment in going after the potential of the 'blue economy' because while the fish pass Jamaica before they arrive in Central America and the Eastern Caribbean, our competitors can produce at significantly lower costs because of the current tax regime on fuel in Jamaica," he said.
The blue economy is a reference to business activity and investments around sea life.
"All countries with developed fisheries have limited-entry legislation, which protects the industry and the people who invest in it. This is currently not the case in Jamaica, where the Government continues to expand the number of licences, which threatens sustainability and dilutes potential profitability of companies," he charged.
Last year, B&D Trawling added a new business line when it opened its waterfront restaurant, Bunny's Seaside Kitchen, in which it invested $30 million.
The restaurant offers a range of seafood offerings from the signature fried/steamed fish to peppered shrimp and the strong back seafood bowl.
Looking ahead, the company is also working with unnamed overseas partners to expand its footprint in the domestic seafood market mainly through supplies to hospitality businesses.
So far in 2018, B&D Trawling has invested "over $100 million" in its operations, covering the live lobster project and added production capacity. Francis said that the company can now process 10 times more than its nearest competitor but did not disclose what they amounted to in volume output.
"There is currently a big misconception regarding the price and quality of live lobsters from the artisanal standpoint," said Francis. "For lobsters to be shipped live from Jamaica to China, they have to be in an excellent condition."
Another seafood processing company, Rainforest, sent off its first supplies of live lobsters to China last Monday from the airport in Montego Bay.