Investment opportunities still available amid difficult global shrimp landscape

The global shrimp industry has been struggling with downward trade, price, and consumption trends, but there are still plenty of positive supply chain patterns and opportunities to attract crucial investments in the sector, finance experts told the 2024 Global Shrimp Forum (GSF).

Speaking at the GSF’s “Finance and Investment Summit,” Rabobank Managing Director of Corporate Finance Reinier Henneman said though the sector’s merger and acquisition (M&A) landscape can be volatile, it’s an industry that has a “fantastic long-term growth trajectory.”

Getting an M&A deal over the line in the current market, however, requires companies to come to the table with ambple preparation and effective insights, as well as understanding possible cultural differences, Henneman said. Due to stubbornly low prices amid weak demand for seafood, many companies and leaders have to outline their unique story and articulate it elegantly if they want to grow, he said.

“Don’t assume that the entire world knows your company. It’s quite the opposite,” he said.

Although there are pockets of growth available, Henneman acknowledged the industry still faces an “unprecedented market environment,” due to the aftereffects of the Covid-19 pandemic, the conflict between Russia and Ukraine, and rising interest rates, which are affecting capital, investment, financing, and commodity prices.

“This is affecting risk appetite,” he said. “This is affecting the cost structure of companies, the growth of companies, and the business of companies.”

Conceding his analysis offers a “really mixed background,” Henneman said long-term growth is still within reach for some aquaculture sectors, with shrimp in particular emerging as an essential protein for major global markets.

Aqua-Spark Chief Portfolio Officer Maria Velkova told GSF the strategy companies take in strong and weak markets should remain the same: finding solutions to global issues.

“We’re looking for solutions that are going to be innovative, that are going to be scalable, and that are going to be translatable to markets,” she said. “Yes, the macroenvironment is not great at the moment, but we understand that the shrimp market is volatile, it’s cyclical, but it fits in with our strategy because we’re a long-term investor. Our open-ended structure allows us to invest; we don’t have to invest or exit at a particular point in time.”

For ambitious and forward-thinking investors, a weak market actually presents opportunities that don’t …

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