Dunover, the new facility relates to end product processing as opposed to production. The onshore hatcheries and offshore sea cages produce the fish.
Outsourcing the processing; scaling, guting etc is expensive hence the capital outlay to bring it in house. The 1m in p.a savings are based on tonnage, so the larger the biomass the larger the savings. This is because larger fish can provide better product formats - larger fillets etc.
The most important part of the move is to derisk product quality and vary product formats as per mkt demands. Over the long term CSS want to be able to cut one side of Kingfish and sell as a freeze packed fillet. Cut the other and mince for food products. Use heads for stock. This is oversimplifying the objective but the higher margins are in the value added products. The key is to have the capability AND flexibility.
CSS Price at posting:
3.5¢ Sentiment: Buy Disclosure: Held
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