Seychelles Seeks To Renegotiate IOT Agreement
For Sale: IOT Factory at Victoria Fishing Port
The announcement earlier this year that MW Brands, the owners of Indian Ocean Tuna (IOT), was up for sale, has prompted the Seychelles to renegotiate its operational agreement in a business in which it had been earning very little revenue.
According to international reportss, there are now three bidders for the company namely, Thai Union Frozen Products, the world’s third-largest canned seafood company, Bolton Group, a European food and consumer goods firm, and private equity group Blackstone. The sale is expected to be finalized by the end of the month.
In a move that is long overdue, the Government is now seeking to renegotiate the partnership agreement it has with MW Brands, the present owners of the canning factory. Experts believe Seychelles has not been getting its fair share of revenue from the venture.
The request for a renegotiation has been announced by a website devoted to news in the fishing industry called Fish Information & Services (FIS), based in Malaysia. In an article dated Friday last week, FIS said the Government will seek revised terms for the agreement over the operations of the canning factory.
The need to revise agreement has long been argued by local experts with knowledge of the international trade in tuna. It is a subject that Regar has covered before.
Seychelles owns 40% of the IOT, with MW Brands, a company headquartered in France, owning the remaining 60%.
But MW Brands controls the operation of the factory as well as the sale of the finished tuna products. All sales are through a company which is a subsidiary of MW Brands, which markets the products in Europe. The set-up is perfect for MW Brands to present the revenue figures as it wishes. For instance, the tuna cans from the IOT can be sold to the marketing company at a low price, which then makes the real profit on sales but allowing MW Brands to declare no profit at all.
IOT is now the second largest tuna processing and canning plant in the world. According to the latest figures available, for the year ending March 2009 it processed 66,000 tonnes of fish and sold 4.6 million cases of tuna cans to the UK, French and Italian markets.
The Seychelles earns a minimal amount from the lease of the plant but not from the profits of the company. The need is for us to ensure that the pricing and marketing arrangements are transparent, so that we can earn a fair share of the profits.
Source: Regar 7-16-10