Rua de Jose Fernandez Lopez s/n
Telephone: +34 986 81 81 00
Fax: +34 986 81 82 00
Web site: http://www.pescanova.es
Sales: EUR 999.09 million ($1.3 billion) (2005)
Stock Exchanges: Madrid
Ticker Symbol: PES
NAIC: 311712 Fresh and Frozen Seafood Processing; 311111 Dog and Cat Food Manufacturing; 311412 Frozen Specialty Food Manufacturing; 311423 Dried and Dehydrated Food Manufacturing; 311711 Seafood Canning; 311822 Flour Mixes and Dough Manufacturing from Purchased Flour; 424410 General Line Grocery Merchant Wholesalers; 424460 Fish and Seafood Merchant Wholesalers; 424490 Other Grocery and Related Product Merchant Wholesalers; 551112 Offices of Other Holding Companies
Pescanova S.A. is one of the world's top fishing companies. The Spanish company owns the largest European fleet of fishing vessels, and the second largest in the world behind the fleet operated by the Chinese government. Pescanova operates 120 trawler and long-line vessels through a global network of subsidiaries operating in most of the world's top fishing markets. In a number of fishing grounds, including Cuba, Pescanova has secured exclusive harvesting rights. In this way, Pescanova handles an extremely diversified range of fish species, from hake, codfish, salmon, and shrimp to roughy, octopus, and others. The company's fishing and marketing operations include subsidiaries, and fishing quotas, in Argentina, Chile, Namibia, Australia, the United States, and elsewhere. In addition to its large fishing and on-sea processing fleet, Pescanova has built up a highly vertically integrated business. In this way, Pescanova is a leading provider of fresh and frozen fish and fish products to the three major world markets: Europe, Japan, and the United States.
The company dominates the Spanish fish and frozen foods market, with a 65 percent market share, and remains a leading supplier of fresh and frozen fish, and other frozen foods, to the European market. The company's subsidiaries include consumer products groups, such as Pescafina and Pescafresco, and others, including Caternova, for the restaurant and catering sector; Cofrio, supplying frozen fish and foods to the wholesale market; and Riazor, focused on shrimp and other shellfish and seafood products. Pescanova's combined sales reached EUR 999 million ($1.3 billion) in 2005. The company is listed on the Madrid Stock Exchange and is led by President and Chairman Manuel Fernandez de Sousa-Faro, son of the company's founder.
FROZEN FISH IDEA IN 1960
Pescanova was founded in 1960 by José Fernandez Lopez, who set out to solve an age-old problem in the Spanish fishing industry, namely, how to preserve fish caught far away from Spain's ports—in the South Atlantic, for example—so that the fish did not spoil during transport times of as much as three weeks. Traditional preservation techniques included salting fish. Yet Fernandez recognized that the development of refrigeration and freezing technologies offered a new possibility for transporting fish.
By then the Fernandez family had established some degree of prominence in the country. Originally from Sarria, the family had started out as cattle ranchers before branching out into slaughtering and then the distribution of meat products. The Fernandez family, which included siblings Manuel, Concepcion, Antonio, and José, came to prominence during the Spanish Civil War, when the company's location made it a main supplier to the forces led by Francisco Franco.
The family's support for the winning side placed them in a strong position following the war. The Fernandez family quickly began to diversify its business interests. In 1939, for example, the family backed the founding of Zeltia S.A., which grew into a leading Spanish biotechnology firm. The family's interest in beef also led it to invest in newly developing refrigeration and freezing technologies. Subsequently, the family set up a number of other companies, including Frigolouro, based in Porrino, and Frigsa, based in Lugo. Other operations included the export company Titania, which served the German market during World War II, and Transfesa, which focused on the railroad transportation sector. The developing family fortune also led to investments in the banking sector: The family founded their own bank in Lugo in 1968, and also entered the publishing world through a stake in Editorial Galaxia.
Although his background was in beef, Jose Fernandez recognized that the ocean represented a vast opportunity for food products, if a way could be found to preserve fish caught far from Spain. Having gained more than 20 years of experience in freezing, Fernandez became one of the first in the world to understand the potential for adding on-board flash-freezing and frozen storage capacity. To develop his idea, Fernandez turned to Vigo's Valentín Paz Andrade, who ran a fishing supply business, Industrias Pesqueras.
Fernandez founded his company, Pescanova, in 1960 and began outfitting his first freezer vessel, the Lemos. That vessel set sail in 1961, with initial trial runs in the waters off South Africa and Argentina. By November 1961, the Lemos had returned with its freezer hold filled with fish supplied by fishermen off the coast of Argentina. By the beginning of 1962, the Lemos had completed a run to South Africa, returning with more than 250 tons of hake, a Spanish favorite.
Pescanova immediately set its sights higher. The company acquired its second vessel, a retired cruise ship called the Habana, which measured 146 meters in length. Pescanova converted the ship into a giant floating factory, renamed the Galicia. That vessel set sail for South Africa in 1964, supported by its own fleet of fishing boats. While the Galicia served as a production vessel—including freezing, but also breading and frying facilities—transport back to Spain was provided by a growing fleet of dedicated freezer vessels.
- Jose Fernandez Lopez develops the first freezer vessels for the South Atlantic fish market and founds Pescanova in Vigo, Spain.
- Cold storage facilities are acquired in Vigo, which becomes the base of the company's processed foods operations.
- Manuel Fernandez de Sousa-Faro, son of the company's founder, takes over as head of Pescanova.
- Pescanova lists on the Madrid Stock Exchange.
- The company launches international expansion with a subsidiary in France.
- A U.S. subsidiary is established.
- The company acquires a majority stake in Pescafina (later 100 percent), becoming the leading European fishing fleet operator.
- The company begins targeting the fish farming market, establishing five plants in Spain and expanding into Namibia.
- The company acquires Companhia de Pesca do Oceano Índico (COPOIC) in Mozambique.
A true innovation in the Spanish food market, Pescanova's frozen fish initially met with a degree of resistance from Spanish consumers. This is because in the early 1960s, frozen foods remained a rarity in the country, all the more so because few consumers, and even fewer stores, were equipped with freezers. At the same time, frozen food, and frozen fish, had earned a reputation for poor quality, because much of the frozen fish then available was actually unsold fresh fish that often had begun to go bad.
ACQUIRING AN INTERNATIONAL SCALE BY THE END OF THE 20TH CENTURY
Pescanova countered this negative reputation through strong advertising efforts. The company also set up its own sales and distribution operations, and even began supplying freezer equipment to grocers so that they could carry the company's products. The effort paid off, and by the early 1970s the company had grown into one of Spain's top 100 companies.
In the meantime, Pescanova had continued to expand its range of operations. In 1964, the company acquired another Vigo-based business, Copiba. That operation gave the company cold storage facilities in Spain, which then served as the basis for the company's expansion into the production of a wide range of processed and frozen foods.
Another major moment in the group's history came in 1968. In that year, Pescanova launched a new vessel, the 100-meter Gondomar, then the largest dedicated freezer boat in service. The added vessel allowed the company to claim the title as Europe's leading fishing vessel operator as early as the 1970s.
Fernandez was joined by son Manuel Fernandez de Sousa-Faro by then. In 1975, the younger Fernandez took over as head of the company, a position he maintained into the mid-2000s. Already a major player in the Spanish fish market, Pescanova began to expand into other food areas. In the mid-1980s, the company entered a number of food segments, including frozen vegetables and prepared foods, such as pizzas. Pescanova, through a growing list of subsidiaries and factories, also set up separate operations for supplying the restaurant, catering, and wholesale channels.
Pescanova went public in 1985, listing on the Madrid Stock Exchange, in preparation for a new era in growth. By the end of the 1980s, the company had captured some 25 percent of the Spanish frozen foods market. Spain's entry into the European Common Market presented the group with new opportunities for growth, particularly with the extension of the group's distribution operations into other European countries. The company first entered France, establishing a subsidiary there in 1987. By the end of that year, the company also had created a subsidiary in Portugal, called Frumar. The company next turned to South America, launching Argenova in 1988, based on a single vessel, the Fuji. In 1989, Pescanova entered Italy as well.
Yet entry into the ECC also placed the company under newly developing fishing quotas. In response, Pescanova launched an ambitious acquisition strategy, acquiring companies, and their fishing quotas, in new markets. The company began acquiring a number of foreign companies, such as Skeleton Coast Trawling Pty. in Namibia (a major region for hake) and Pesquerias Belnova in Uruguay. Other additions including operations in Ireland (Eiranova Fisheries), Australia (Austral Fisheries), South Africa (Novagroup), Scotland, Mozambique, and elsewhere. By the end of 1994, the company directly controlled 11 subsidiaries in nine countries and, through some 30 joint ventures, held interests in more than 17 countries. Pescanova's international operations represented some 40 percent of the group's total sales, which topped $400 million into the middle of the decade.
GLOBAL LEADER IN THE NEW CENTURY
Pescanova entered the North American market in 1997, setting up subsidiary Pescanova Inc. that year. The following year, Pescanova raised its profile again when it shifted its shares to the Madrid exchange's main board. By the end of the decade, the company's sales had topped EUR 500 million.
In 2000, however, Pescanova confirmed its position as leader through the acquisition of a majority stake in struggling compatriot Pescafina. By 2002, the company had completed the acquisition of Pescafina, boosting its sales by nearly EUR 300 million. The Pescafina addition not only added an important brand name, it also raised Pescanova's percentage of the Spanish frozen fish and foods market to more than 65 percent. The addition of Pescafina also expanded the company's fleet past 120 vessels, giving it the largest fishing fleet in Europe and the second largest in the world, trailing only the Chinese government. In a further extension, the company acquired Spanish trawler group Pesquera Vasco Gallega, a purchase that enabled the company to boost its fishing quotas in Argentina.
Although Pescanova maintained its interest in developing its fishing operations, the company also had launched an investment into fish farming; the company expected its farmed fish to account for as much as 50 percent of turnover through the end of the decade. In 2002, the company moved to expand its fish farming operations, establishing a new base in Namibia. These operations complemented the company's Spanish farm base, with five facilities in operation by 2006.
By the end of 2005, Pescanova had quite nearly broken the EUR 1 billion mark, posting sales of more than EUR 999 million ($1.3 billion). The company continued its active expansion strategy. In 2006, for example, the company added new operations in Mozambique, buying up that country's Companhia de Pesca do Oceano Índico (COPOIC). Also that year, the company received approval to establish a number of new sea bass farms in Portugal, while also announcing plans to open a turbot facility in Norway. Pescanova expected to maintain its position at the top of the global fishing industry into the new century.
Argenova, S.A. (Argentina); Bajamar Séptima, S.A.; Eiranova Fisheries Ltd. (Ireland); Frigodís, S.A.; Frinova, S.A.; Insuiña, S.L.; Nave de Argo, S.L.; Newfishing Australia Pty.; Nova Austral (Chile); Novapesca Trading, S.L.; Pesca Chile, S.A.; Pescafina, S.A.; Pescafresca, S.A.; Pescamar, Ltd. (Mozambique); Pescanova France, S.A.; Pescanova Inc. (U.S.A.); Pescanova Italia S.R.L.; Pescanova Portugal Ltda.; Pesquera V. Gallega, S.A.; Pesquerías Belnova, S.A. (Uruguay).
Unilever; SIF Group hf; Icelandic Group hf; Marine Harvest N.V.; Thai Union Frozen Products Company; Young's Bluecrest Seafood Holdings Ltd.; Trident Seafoods L.L.C.; Red Chamber Co.; Royal Greenland; Pacific Seafood Inc.
"Buy the Ships, Get the Quotas: Pescanova Argentine Gambit," Quick Frozen Foods International, April 2002, p. 50.
Cherry, Drew, "Pescanova: Spain's Billion-Dollar Dynamo," Intrafish, November 2003, p. 14.
Fiorillo, John, and Drew Cherry, "The World's Top Seafood Companies," Intrafish, March 2005, p. 22.
"From Spain to Argentina to Australia, Pescanova's in the International Swim," Quick Frozen Foods International, October 1994, p. 68.
"Pescanova Gives Cubans a Shrimp Boat," Cuba News, June 2003, p. 12.
"Pescanova Plans Fish Farms for Higher Yields," Namibia Economist, April 19, 2002.
"Pescanova to Focus on Added Value," Foodanddrink.com, October 11, 2002.
"Spanish Firm Signs Deals to Sell Cuban Shrimp and Lobsters," Cuba News, March 2001, p. 12.
"Spanish Shrimp Farm Investment," Caribbean Update, June 2002.