P&P’s Bold Dive Into Tuna
While the timing of the acquisition may have surprised some, the recent move by Parlevliet & van der Plas to step boldly into the tuna industry has been several years in the making. The firm’s CEO explained that an opportunity arose, and a Dutchman is never afraid to jump in, despite some slight concerns over the fragmented nature of the global business.
In July 2016, P&P as it is more commonly referred to, acquired 14 tuna purse seiners from long rooted French tuna fishing firm CFTO (Compaigne Française du Thon Océanique), which meant getting its hands on Europe’s largest seiner fleet. The firm is already one of the biggest ship owners in Europe, with the purchase only solidifying this position.
Despite the fact that there has been a prolonged period of relatively low global tuna prices, the timing of the deal does not seem to concern the firm’s CEO, Diek Parlevliet, who explained that P&P has been wanting to expand into tuna fishing for some years. “There was no option in missing an opportunity like this when it appeared.”
P&P already has 10 pelagic fishing vessels under its management, mostly catching mackerel and herring, and 15 demersal vessels which catch a range of species, from cod and haddock, to red fish and halibut. Without tuna, its production is around 400,000 M/T per year.
The firm, established in 1949, is family run, and Mr. Parlevliet represents the second generation, with the third generation already installed in the company. Overall, there are around 6,000 employees under the P&P name.
As well as Managing the P&P Group, Mr. Parlevliet is active as a board member of the Pelagic Freezer-trawler Association and the Dutch Ship-owners Association. He has helped lead the firm to become a European leader, and an exporter to a wide variety of global markets.
While having its own production sites in Germany (Euro-Baltic), Faroe Islands (Faroe Pelagic) and the Netherlands (Ouwehand and Heiploeg), most of the frozen catch is sold to other processors before it reaches the market. Its plant based on home soil produces mostly Dutch herring and also marinated fish for regional supermarket trade.
Mr. Parlevliet calls the ownership of around 40 small-scale shrimp vessels (Heiploeg) the “third leg” of the firm, telling Atuna that the step into the tuna industry was the “fourth leg” for its operations.
Within the 14 purse seiners it acquired from CFTO, two vessels are brand new, joining the fleet only in 2016, which the CEO explains was all factored into the sale price of the company.
Keeping operations exactly the same from how CFTO ran things, seven of these seiners will fish in the Indian Ocean, while the other half will focus fishing in the Atlantic. They will continue to fly the French flag, the company confirmed.
For now, P&P expresses no intentions to move operations to any other ocean regions, but Mr. Parlevliet said he would never be against the possibility in the future.
He explained that CFTO’s head office will remain located in Concarneau in Brittany, and all employees will keep their current positions. The only change is that Diek Parlevliet has become the new Chairman of the Board, while fellow Dutchman, Auke van de Kerk is the newly appointed CEO. The top two executives of CFTO have stepped down accordingly.
In a statement on the initial deal, P&P said that it commits itself to consolidating and strengthening CFTO’s fleet, as well as maintaining its Brittany roots.
Mr. Parlevliet said that Van de Kerk, the new CEO, “has knowledge of the tuna industry from previous positions he has held, and we are confident that he knows the best decisions to make in light of the issues within the industry.”
While he thought it was too early to talk potential tonnages, the recent “red” overfished status put on Indian Ocean yellowfin tuna stocks by the IOTC appeared not to faze Mr. Parlevliet too much, simply stating that “there have been measures taken to reduce the overall catch of the species, and we must respect that.”
Previously, CFTO’s vessels have been responsible for catching around 65,000 M/T of tuna per year.
The main target species of the vessels will remain large yellowfin tuna, with the P&P CEO noting that “the price is higher” for this species. However he says there will be a mix of catch between yellowfin and skipjack.
Despite not having much tuna-specific knowledge currently, Mr. Parlevliet is confident in the company’s success. “I appreciate that it is a global industry, but we have been fishing pelagics worldwide for years, so we have some expertise.” He also explained that often many of the buyers are the same across the products, confident that the right contacts and distribution channels are already in place.
Tuna is of course different to mackerel and herring, he acknowledges, but all are migratory, “so the whole thing is not completely new for us.”
While having processing operations for some of the current fish it catches, at present, Mr. Parlevliet explains that there are no plans to head into tuna production. “Of course we always look for opportunities, but there are no direct intentions, and we first want to see how we can do on the fishing side.”
Sustainability seemed to be a key priority for the firm, with Mr. Parlevliet explaining that he hopes P&P can carry on the forward thinking attitude of CFTO in this realm. He said that the fleet will prioritize free-school fishing where possible, while sticking strictly to the recently reduced FAD limits set by the Indian Ocean Tuna Commission (IOTC) and International Commission for the Conservation of Atlantic Tunas (ICCAT), primarily pushed for by the French seiner fleet.
He said that most of P&P’s other fishing operations and products already have MSC certification, and that the firm looks forward to gaining the sustainable accreditation for its tuna operations too, adding that it will be a top priority.
“We are working on this already, and Orthongel is pushing on the fleet’s behalf,” he added. “Sustainability is for the future; we are a family company and will remain a family company, and my children and their children want to continue in this business.”
According to Mr. Parlevliet, however, a fully sustainable industry cannot be achieved if there are no changes in the current state of the sector. With extensive knowledge of being successful in other international fishing industries, he says that as far as he can see, “the tuna industry is very fragmented.”
He believes that the industry itself should work more closely together with each other, stating that “of course they are trying to work together but that should improve.”
While he believes this action is needed throughout the supply chain, the P&P CEO sees the main issues being within the fleet. He recognizes however that change cannot come in a matter of days. He was happy though to have left his first World Tuna Conference in Bangkok last year with the impression the industry was moving in the right direction.
One of the main problems he sees in the global tuna sector is the growing capacity of the fleet, for which he believes there should be no excuse. “I know the pelagic industry has fewer players, so it’s easier to agree, but capacity is something that is so strict within this sector, and it should be for the tuna fleet too. In this respect we’re supporting the effort of ISSF to limit the capacity of the tuna fleet.”
“In Europe we already have these limitations, and countries in the Far East, like China, should be leading by the example. The EU is an example to the tuna fleet worldwide.”
Despite the addition of 14 large tuna vessels being a significant growth for the firm, Mr. Parlevliet believes the impact on the company’s turnover won’t be massive, estimating a 10-15 percent rise.
The family company has never disclosed its finances, and has no intention to, but he was clear in noting that its shrimp operations are a large contributor to turnover, and that pelagic fishing brings much bigger volumes. The costs of tuna fishing are higher, he states, and very volatile, with return on catch constantly changing.
Where this revenue comes from, he believes, won’t change too much, noting that the firm’s existing major markets, like Europe, the Middle East, and West Africa are unlikely to shift.
“But we always look for opportunities,” he assured. “We always want to be in the top three or five firms of any business we are involved in, and if it’s possible to do it sustainably, we want to grow continuously.”