Alliance Tuna expects 33.3% profit growth

Canned tuna exporter Alliance Tuna International Inc. is eyeing a 33.3 percent growth in its net income this year, boosted by higher sales and the contribution of its Indonesian-based subsidiary.

Alliance Tuna president and chief executive officer Jonathan Dee said the company’s net earnings are expected to reach $4 million this year compared with the projected net income of $3 million in 2008. Net sales are forecast to grow to $72.8 million, up 37.35 percent from the projected $53 million last year.

Of the expected $72.8 million sales this year, $12 million will come from the company’s operations in Indonesia while the rest will come from exports.

Alliance Tuna said US export sales accounted for only 20 percent of total sales last year as the company focused on European markets due to a slowing US economy. Prior to the global economic crisis, the US market cornered 50 percent of the company’s total exports.

Alliance Tuna has over 150 clients in more than 50 countries like Latvia, Chile, Kuwait, Romana, Croatia, Montenegro and Iraq.

Dee said the company’s goal is to be present in 80 countries in three years.

Stockholders’ equity is seen to increase to $22.1 million or 22.1 percent higher than the estimated $18.1 million in 2008.

Dee said the company expects to post higher margins in the coming years with the addition of Prime Foods NZ Ltd., wherein Alliance Tuna acquired a controlling stake.

The two corporations agreed to build a salmon processing plant in the Philippines, estimated to cost around $1.5 million. The plant will produce two million tons of salmon a day which will be exported across the globe except New Zealand.

PFNZ, a leading retail supplier of smoked seafood in New Zealand, holds a 35-percent share of the market. Its products include hot smoked, cold smoked and marinated salmon which are sold under Prime Smoke and Studholme brands.

Dee said the site of the plant has yet to be finalized although the two companies prefer that it be set up either in General Santos City or an export processing zone.  “We, however, continue to look for possible sites,” he said.

Dee said it was cheaper to build the salmon plant here than in another country. “The costs are 10 times more abroad,” he said.

The plant is expected to be operational by the end of the year, Dee said.

Alliance Tuna said the investment is expected to boost its profitability since profit margins in salmon are higher than tuna, thereby ensuring future growth for the company.

In 2007, Alliance Tuna registered revenues of $42.4 million, up 36 percent from the previous year’s $31.1 million. The strong sales growth was attributed to the surge in orders from all the major markets, a wider client base and introduction of new products.