Moana Pacific revamp sees CEO sidelined

By IRENE CHAPPLE

Moana Pacific has lost its chief executive and may be split into two divisions under restructuring that is preceding the creation of New Zealand's biggest fishing company, Aotearoa Fisheries.

Moana Pacific's former chief executive Bruce Young is, from today, a short-term consultant to the Treaty of Waitangi Fisheries Commission as it sketches plans for the fishing giant, known as AFL.

The company is a central part of the fishing allocation deal settled by the commission last year and now waiting to be enshrined in law.

AFL will be an umbrella company for the six companies - Auckland-based Moana Pacific and Nelson-based Sealord being the biggest - in which the commission has interests.

AFL will dominate commercial fishing, accounting for about 40 per cent of the industry by some measures.

Young's departure leaves Moana Pacific being led by its chief financial officer, Richard Jolly, and chief operating officer, Brent Marshall.

Young established Moana Pacific in the early 1990s as a joint venture between Maori development interests and Skeggs Seafood.

But now Young's position has essentially been restructured out of existence as the commission looks to streamline the company's operations.

Last week Young was philosophical, saying the company's decrease in size, partly due to a drop in quota, meant a job at his level would not exist long-term anyway.

Said Young: "We used to be 30 per cent bigger than we are and this job isn't as big as it used to be ... It's time to move on."

The commission is not advertising for a new chief executive but a similar position may come up after the restructuring is complete. It would, however, be for a smaller operation.

Young said he was excited about consulting to the commission. He would not say how long the contract was for, although the tenure is limited and he did say it would occupy him for "the next few months".

The most likely restructuring of Moana Pacific to suit AFL's plans is a split that would see it divided into its wet-fish and lobster operations.

The wet-fish operation would hook up with the commission's operations in the Chatham Islands, run by Chatham Processing, to avoid duplication.

Young said that idea was one of "about five that have been scribbled on a piece of paper so far".

Other possibilities include regionalising the operations into north, central and south arms or linking up with Nelson-based Sealord, of which the commission owns 50 per cent.

The aim is to increase Moana Pacific's profits from levels of about $8 or $9 million before interest and tax (ebit).

"Really, on the assets we have that just isn't enough," said Young. "You have got to benchmark yourselves against general industry indicators and make sure you are doing at least as well as that."

He said $10 or $12 million ebit profit "had a better ring to it" although the industry, which exports the vast majority of its product, was strongly influenced by the exchange rate.

Young and Moana Pacific chairman Craig Ellison deny redundancies are inevitable among the 250-odd staff.

"We haven't said there will or won't be redundancies," said Ellison. "It isn't something we are focused on and we are certainly not looking at wholesale redundancies."

At Sealord, however, around 70 staff are believed to have been made redundant under restructuring led by Doug McKay, appointed chief executive in September last year.

Ellison said those redundancies were more about McKay increasing efficiencies for its owners - the commission and Japanese company Nissui - than preparing for AFL.

But the shakeup will assist AFL's policy of providing cash dividends rather than increasing assets.

Said Ellison: "One of the requirements of AFL is that there is a focus on generating cash dividends whereas probably up until now we had much more of a focus on growth ... This is a significant change."

AFL, while dependent on the speed of its legislative blessing, could be in place "in a virtual sense" by October, said Ellison.

"The structures may not be finalised or in place but you can look to try and mirror the operations."