MG Kailis Moves Out Of Bluefin Farmingff

Australian bluefin tuna farming seafood company MG Kailis’ has ended its involvement with southern bluefin tuna but the move has opened the door for a new homegrown company. It is believed that decreasing returns in bluefin farming have spurred this action.

Kailis operations in Port Lincoln should see minimal disruption because Kailis tuna manager John Isle together with two local business identities believed to be Kym Penalurick and Sam Sarin, have stepped in to take over and form a new company.

The move is seen as a positive for the local economy and industry as a new locally based company has been formed to take over operations previously owned by the Western Australian outfit.

And MG Kailis has abandoned plans to move its tuna farming operations back to its home State, off Esperance with Mr. Isle saying the new company and its 25 employees were here to stay in Port Lincoln.

However Western Australian plans may still be on the horizon.

“Kym (Penalurick) is a long-term resident of Esperance and a business owner there for 25 years and was still very interested in a tuna operation over there at some stage.”

Mr. Isle said there was the potential for more local jobs, with accounting and reporting roles previously filled interstate within Kailis now being carried out in Port Lincoln.

The take over was smooth with the new management taking on all aspects of the current operation including vessels.

Tuna industry spokesman Brian Jeffriess said the exit of MG Kailis did not surprise him and he had always doubted the feasibility of moving tuna operations to Esperance.

While the Kailis operation was not one of the largest players or quota holders, Mr. Jeffriess said maintaining a diversity of companies was positive.

“It’s very positive and brings new blood into the industry and widens the number of young operators,” Mr. Jeffriess said. “There is a new generation that has come in and that bodes well for the future.”

There were still 12 companies farming tuna and he did not expect any additional rationalization or combining of companies as many had new generations come on board looking at continuing their family legacy.

The biggest issue was some of the older generation moving on but in many cases younger family members and new managers had already taken over, he said.

“The next three years are looking quite positive and only a substantial problem could result in more rationalization,” Mr. Jeffriess said.

The Perth-based MG Kailis Group is the second largest producer of cultured Australian South Sea Pearls in the world and also harvests prawns off WA and tropical rock lobster in Queensland.

A leaked document from MG Kailis Group managing director Alex Kailis, obtained by the Esperance-based Vive le Recherche environmental group named decreasing returns from the tuna industry as the reason for the decision.

The document stated the group accepted the offer to divest their tuna farming business due to lower prices with competing fish from the Mediterranean and Mexico, the stronger Australian dollar and ultimately increasing risk.

“The decision is part of our broader restructuring plan and by unlocking significant financial capital within the group positions us for expansion opportunities in 2006,” the document said.

In the statement Mr. Kailis acknowledged the support and loyalty of Mr. Isle and Port Lincoln staff.

“Despite being a new entrant to the industry just under 10 years ago, John Isle and his team quickly established MG Kailis Tuna as one of the highest performing teams in terms of production performance, and today they sit as the benchmark operator others are trying to emulate.”