Benchmark released its 2019 Annual Report with results that werre lower than expected. The company reports that the 2019 results were impacted by adverse conditions in the shrimp and sea bass/sea bream markets and an increased price competition in Artemia markets that significantly affected Advanced Nutrition, the company’s largest division.
The company’s main customers in shrimp faced declining prices and negative margin development, leading to reduced production, and affecting demand for products. Industry commentators remark that these were the lowest price levels in the shrimp industry in 30 years (inflation adjusted) resulting from overstocking after a record production in 2018. In Artemia, the division’s main product, the situation was exacerbated by strong harvests and increased competition which resulted in price pressure. The Mediterranean seabass and seabream markets were also affected by oversupply after a period of high stocking which affected prices, dropping to levels not seen since 2012.
As a result, revenues in Advanced Nutrition were down 10% to £76.8m (2018: £85.7m) and revenues from Artemia (in USD) were down by 23%. The division’s specialist diets and health were more resilient to market conditions with sales down by 5%.
Despite this situation, the Advanced Nutrition division reports an increase in market share in health products and diets “which demonstrates relative resilience in challenging market conditions,” the company stated. The production plant capacity in Thailand was increased to meet long-term demand for specialist diets and the company received the awards for “Best Contribution to Chinese Shrimp Industry in 40 years” (joint award) and for “Most Trustable Brand of Shrimp Feed in China 2018.” The revenues from China grew 21% in the year. The company also launched new products such as Vibrio inhibiting D-FENSE Artemia and the shrimp nursery diet.
Genetics, the second largest division, continued to perform well and the company made good progress towards the launch of its next generation of sea lice treatment which, together with its co-dependent technology CleanTreat®, deliver a solution with strong environmental and animal welfare credentials.
The company’s priorities for the next 12 months are to execute the program of disposals and restructuring, obtain regulatory approval and prepare for the commercial launch of BMK08 and CleanTreat®, and execute the strategy in core business areas of Genetics and Advanced Nutrition, including the launch of SPR shrimp in genetics and the expansion of health and diet segments in Advanced Nutrition. The company aims at being the leading provider of solutions in genetics, health and specialist nutrition for the global aquaculture market.
Download the 2019 Annual Report here.