SANford Chart

[Phaedrus]

For the first time since 2000, SAN has fallen below $4.70.
This stock had found consistent and reliable support at this level many times over the last 3 1/2 years.

http://home.ripway.com/2003-11/39768/927548-SAN001.gif

[JAMP]

Today is the record date for 9cps dividend too, so it is likely to be lower come Monday.

Regards JAMP
NZX: MCH MFT RBD SAN SKX SPN VTX WRI
UCM: KCE

[kittydashwood]

OBV rising.

[Phaedrus]

Kitty,
I'm not sure what time frame you are looking at when you say the OBV is rising - broadly speaking, it has been more or less level (trendless) all this year. Here is my take on the SAN/OBV relationship :-
http://home.ripway.com/2003-11/39768/SABobv001.gif
You can see that there have never been any "Class A" divergences (When Price and OBV go in opposite directions) inferring that institutions or other big buyers have not been taking any great interest in SAN - buying or selling. Note too that the OBV is still in negative territory. In the absence of any clear divergence or trend, the OBV is not much help to us here, in my opinion.

[JAMP]

Phaedrus and Kitty, I can't confess to knowing what an OBV is...so perhaps I should be posting into the other Sanford thread (http://www.sharetrader.co.nz/topic.asp?TOPIC_ID=19284).

Following a recent purchase (16Jun04) at $4-60, I have averaged down my holding in SAN. With the shareprice having broken the previous support level of $4-70, is it your expectation that this will now become a level of resistance?

Regards JAMP
NZX: MCH MFT RBD SAN SKX SPN VTX WRI
UCM: KCE

[Phaedrus]

Jamp,
That's correct - a support level, once broken, commonly becomes a new resistance level. Commonly, not invariably.
I have no expectations - all I know is that Sanford is looking weaker now than it has in quite a while. Even if you take the optimistic view that the trading range is continuing, this stock has gone nowhere for over 2 years. During this time many NZ stocks have made significant gains.
So you have just bought - maybe you were feeling lucky, maybe you have picked the bottom to perfection, maybe you know something that others don't, maybe something fundamental has changed, maybe you are a true contrarian. Good luck to you - SAN owes you a drink or two.

[Longtack]

Lookat all dem double tops (and the subsequent dips) on Phaedrus' first chart! Sheesh.

[JAMP]

Luckily SAN doesn't really owe me anything - I have only been with them since Apr04.

The one certainty in their industry is that things will change. I do believe that they are well positioned to;

a) roll with the punches when the change is for the worse
and
b) move forwards when the change is for the better

As an aside, if SAN push north of $4-70 will this become a support level again?

Regards JAMP
NZX: MCH MFT RBD SAN SKX SPN VTX WRI
UCM: KCE

[winner69]

SAN looking pretty weak at the moment

Overall market doing remarkably well but SAN sinking to leveks not seen since the turn of the century

With little demand at current even the listed low p/e is not attractive

Wonder what is going on?

[Phaedrus]

Don't know, but whatever it is, it has been going on since mid 2001!
Notice how nicely and accurately the support SAN had at $4.70 became resistance, once this long-term support level was broken.

[kittydashwood]

New support levels at 4.20? Or is the SP going to keep freefalling after the cuts in the Hoki qouta and future qouta cuts telegraphed by the beehive. The fishing sector is desperately in need of some consolidation and new ideas.
Bring on GPG! [}:)]

[JAMP]

I don't know how accurate the supposition of a support level at $4-20 for SAN is, but the earlier flagged resistance level of $4-70 has reared its head again.

Pleasing to see that the newly opened Auckland Fish Market has landed at least one of the industry heavyweights (http://www.nzherald.co.nz/business/businessstorydisplay.cfm?storyID=3581162&thesection=business&thesubsection=fishing&thesecondsubsection=general&thetickercode=). Has anyone had an opportunity to look around the market perchance?

Regards JAMP
NZX: MCH MFT RBD SAN SKX SPN VTX WRI
Unlisted: KCE SUB

[winner69]

Not many support levels below 400

Uncharted waters now

[kura]

I purchased 500 at 4.30 not long ago, just to dip my toes in water so to speak, would love them to plummet, (he says sniffing a bargain) May take a while but every dog has its day !

[JAMP]

My buy finger has well and truly been twitching on this one.

I transferred funds from my bank account on Monday morning (before work) with the intention of buying more SAN on Tuesday. I didn't find out about Access Brokerage being in liquidation until Monday evening (after work) by which time it was too late to cancel the funds transfer.

Right about now I would rather have my funds drifting on the open sea with SAN than freezing in the BNZ vault.

Regards JAMP
NZX: MCH MFT RBD SAN SKX SPN VTX WRI
Unlisted: BRK

[winner69]

Pity about the bad timing on your funds transfer Jamp

You are keen about picking the bottom of SAN aren't you ... do you see that much value in them?

Maybe should join the ATR fan club instead

[Stock Man]

Although there are certain divergences between some volume based oscillators and price, it does not mean that a bottom has been reached. You really have to wait for price action to confirm.

How low is too low....I certainly wouldn't be jumping in just yet!

Jamp - hope things work out for you re Access.

Rgds

[JAMP]

My first day back in employment too after being unemployed for longer than anticipated. It nearly put a dampener on the day, but not quite.

I will just have to hope that the share price stagnates until such time as my funds are freed up (always the optimist). In nature I am a little contrarian, so at the moment I feel this has me stamped all over it. No guarantees that we have seen the bottom, but as soon as my bait arrives I am happy to sling it on my hook, dangle it over the side and see what happens.

Regards JAMP
NZX: MCH MFT RBD SAN SKX SPN VTX WRI
Unlisted: BRK

[Sideshow Bob]

quote: Originally posted by Jamp

My first day back in employment too after being unemployed for longer than anticipated. It nearly put a dampener on the day, but not quite.

Gotta be happy the first day back is a Friday :D


Sideshow

[Longtack]

Jamp. For me the last buy signal was at the end of July followed by a sell 10 days later with a 2% loss. Sorry about the funds to Access debacle.
I'm with Stockman on this one - not yet.

[kittydashwood]

The fishing industry seems beseiged at the moment, a lack of skilled workers, a strong dollar, foreign competition for a diminishing resource. With such natural advantages NZ should have two or three world recognised brands listed on the NZX. Add to this the governments lack of traction in sorting out aquaculture regulations and the situattion is not good. What's needed is government guidance, Jim Anderton should stop setting up superboats and superbanks and set about taking away the barriers to creating a fertile environment for a sustainable fishing industry.

As for SAN. This an important month for SAN technically during a time of real weakness in it's shareprice. At 3 year lows and still with considerable selling pressure. There seems to be some historical resistance @ approx 3.50 then I guess the NTA. After that well the reserve bank might have driven another company to the wall. One thing is certain when we get below 4$ SAN will become a takeover target for sure.

[winner69]

Been up every day since it hit that 400 ..... you been buying Jamp??

[rmbbrave]

I have been thinking about buying Sanford shares for over 3 years but everything (and I mean everything) I read about the fishing industry from all around the world shows fish stocks of all spieces on the decline . Today I read that English fisherman had a quota of 800,000 tons of sandeels (sound tasty don't they) last year but could only catch 300,000. Are NZ's fish stocks in a similar state or are they sustainably managed? In the last 3 years Sanfords price has fallen (along with world fish stocks). Are Sandford shares really worth buying?

[Stock Man]

It's quite difficult to tell, as this stock moves quite a bit on very little volume. However, the last week of action doesn't really inspire much confidence imo.

[danchop]

from what i gather from mates who work on sealord boats they cant catch the quota allowed for hoki this year anyway,and theres definately a major decline in the stocks out there

[rmbbrave]

Here is most of the article from the BBC online.


UK seabirds' breeding attempts in 2004 have been disastrous, the Royal Society for the Protection of Birds says, with industrial fishing largely to blame.
In a report the RSPB says 2004 has been the most catastrophic breeding season on record for seabirds along UK coasts.

It says industrial fishing to supply fish meal and oil is barely sustainable and imperils the whole marine food web.

The RSPB says climate change is making matters worse, with some industrial fish species starving as the seas warm.

Total failure

Industrial fishing catches millions of tonnes of small fish which congregate in dense shoals - species like sandeels, sprats and anchovies - to turn into meal and oil, much of it to feed farmed fish.

The fish caught are a key part of the marine food chain, but the RSPB says we know little about the effects of industrial fishing. But it is worried: "The UK has suffered serious seabird disasters this year already. In Shetland and Orkney, entire colonies of birds failed to produce any young because of severe food shortages.

"On top of that, hundreds of seabirds have been washing ashore having perished at sea. Again, lack of food is thought to be one of the reasons."

The report, Assessment Of The Sustainability Of Industrial Fisheries Producing Fish Meal And Fish Oil, was compiled for the RSPB by Poseidon Aquatic Resource Management Ltd and the University of Newcastle-upon-Tyne.

It investigated the sustainability of two of the world's largest fisheries, the Peruvian anchovy industry and the North Sea sandeel fishery.

It concluded that industrial fisheries globally are failing to meet crucial criteria for sustainability, with the sandeel fishery deficient on around 60% of the criteria tested.

[JAMP]

winner69, my funds have not yet been released from the Access Brokerage fiasco. Needless to say I feel like I have missed the boat on this one.

Regards JAMP
NZX: MCH MFT RBD SAN SKX SPN VTX WRI
Unlisted: BRK

[Oracle]

JAMP

Missed the boat. You should feel like the guy who missed the Titanic!

I cannot understand why anyone would contemplate investing in an industry that is doomed, unless the world accepts a near zero quota, for sufficient time period. Surely, until that happens you cannot get rich! Refer to above posts.

If you are a trader, you may have brief successes. Refer to your TA!

[kura]

Basically fish is sustainably managed in NZ, (apart from odd hickup ie Hoki) so in long term this would put SAN in a better position than its international rivals. Main concerns are:
- current profitability (lack thereof) as take out FOREX gains and result is poor
- lack of security of tenure over marine farm assets, while govt bumbles along with proposed rule changes.

[rmbbrave]

Sanford shares are up 50 cents in 2 weeks and 17 cents today. Today there were two annoucements.

1) The purchase of Suminovich.

2) Investing in China.


1) Sanford finalising purchase of fishing assets of Simunovich

Sanford Limited is in the closing stages of arrangements to purchase most of
the fishing assets of Auckland based fishing company Simunovich Fisheries
Limited.

These assets include fishing and scampi quota, vessels, equipment, workshop
facilities and other operational assets. Operational personnel associated
with these and other assets will be offered ongoing employment in similar
positions within Sanford Limited but some senior positions will be lost.

It is expected that this purchase will be completed and be effective from the
new fishing year commencing on 1 October 2004 and that it will prove highly
complementary to a broad range of Sanford's existing activities.

These include inshore longline and trawl fishing in the northern area for
species such as Snapper and Tarakihi which will further enhance the supply of
product to the newly opened Auckland Fish Market.

The hoki, orange roughy, and other deepwater quota species will be a used by
our existing deepwater ice and freezer trawlers and freezer longliners.

Simunovich's and Sanford's scampi operations will be integrated. From the 1
October 2004 the management of this resource changes from Olympic style
fishing (the disruptive race for fish with all the negative quality, market
volatility and over capitalization issues) into individual transferable quota
fishing where area quotas can be harvested in a much more efficient manner
maximising quality and vessel usage and supplying the market in a more
orderly fashion.

2) Sanford invests in China

Sanford Limited has concluded a 25% investment in a wholly foreign owned
seafood processing company in China.

The company Weihai Dong Won Foods Limited (WDWF), based in Weihai in the
north eastern part of the Shandong province is majority owned by Dong Won
Fisheries Co Limited of Korea but has other Korean shareholders as well. The
Sanford investment is part of an increase in the capital of the company from
US$5m to US$7.2m and coincides with an expansion of WDWF's already extensive
processing facilities.

This investment is part of Sanford's long term strategic goals of securing
the full benefits through a limited seafood supply chain into high value
worldwide seafood customers.

Weihai Dong Won Foods Limited was established in 1998 to meet increased
demand for new seafood products in Japan and elsewhere. The company sources
various seafood raw material products from New Zealand and elsewhere as well
as purchasing seafood locally in Shandong province. It processes that
seafood into more highly valued finished products which is then exported to
various countries around the world.

Sanford's investment will allow it to participate actively in the growth and
development of the business as well as enabling us to offer our customers
more specialized processed seafood products in one of the most competitive
economies in the world.

Sanford's decision to proceed with this investment was further encouraged by
New Zealand's recent recognition of China as a market economy and the
resulting steps towards a New Zealand/China comprehensive free trade
agreement.

Sanford has previously contracted the plant to process products caught in
other areas of the world and has always been impressed with its strong
emphasis on quality and efficiency. We are excited by the opportunities that
this equity investment offers us.

Sanford and Dong Won operate the San Won Limited Coldstorage business in the
port city of Timaru which has a sister city relationship with Weihai. Sanford
also charters three Dong Won fishing vessels in New Zealand.

Dong Won Fisheries Co Limited was established in 1970 and is listed on the
Korean Stock Exchange. For further information see www.dongwonfish.co.kr

Sanford is New Zealand's only publicly listed fishing compan

[JAMP]

Oracle, with the benefit of hindsight I can "categorically" state that industry rationalisation was always going to happen. This was signalled when they tried to merge with Sealords. To my mind there is more to come, and when it does the cream will rise to the top.

The good news is that the BNZ should be in contact with me within the week to clarify (and release?) my call funds with Access Brokerage. Perhaps a fortnight or so too late to park them where I had intended, but at least they are homeward bound.

Regards JAMP
NZX: MCH MFT RBD SAN SKX SPN VTX WRI
Unlisted: BRK

[Major von Tempsky]

So, did the Sanford chart predict today's "breakout"?
And if not what's the point in doing these pointless charts?

[Longtack]

MVT
When T.A. signals are propitious I react. I don't try to predict and I believe that it's one of the tenets of effective T.A. (just as F.A.'ers who don't understand T.A. are reactive.[:p])

[Stock Man]

quote:Originally posted by Major von Tempsky

So, did the Sanford chart predict today's "breakout"?
And if not what's the point in doing these pointless charts?


MVT, I will attempt to answer,but only if you promise one thing: you try to be objective[:p].

TA is a tool, exactly like FA, to aid in a decision making process. TA can not predict future prices - neither can FA. I use FA and TA to stack the odds in my favour when trying to make a profit.

I mentioned on the 18/9/04 that SAN can move quite a lot on very little volume. There certain indicator signs, but nothing compelling to make me want to rush in. SAN is a stock I have no interest in.

Anyway, tell me, did your statement of financial performance, el nino weather patterns and cash flows predict todays 'breakout'? [?]

[Stock Man]

MVT - Why have you gone all quiet[?] If you are going to make haughty comments, and someone takes the time to respond, I would have thought that even you would have the decency to reply.

I obviously gave you more credibility than you deserve. :(

[duncan macgregor]

MAJOR VON TEMPSKY, You said [did the charts predict todays rise in the share price]. The charts will never predict a rise like this happening, but fundamental inside information will. We live in a crooked world, the charts showed that something untoward was happening,and it did. FA at a distance would never spot it, unless you were close to the operation but TA did. Two announcements with the market reaction in advance,or to put it bluntly insider trading. Perhaps MAJOR you might see past the tea leaves off chartists. The herd starts to gallop before most of us hear the shot. When it comes down to straight out inside trading watch the charts. MACDUNK
DISCL 60pcFA 40pcTa is what i do.

[Lawso]

I have no interest in SAN so didn't notice any price rise ahead of the announcements. So, MacDunk and others, if you did notice something fishy (sorry, pun not intended) why haven't you raised the matter with NZX? A simple phone call or email will at least prompt some sort of response. I've done this a couple of times over things that bothered or puzzled me and each time I've received a prompt and courteous reply. It all helps to keep them on their toes, IMO.

[Leai_Se_Tupe]

MVT,

TA thinking disguised as FA : If a company has bad managers and doesn't make money, it is likelyto go bust. (You could illustrate this on a chart if you wanted to - management quality versus earnings or whatever - would it then be mysterious and require tea leaves for proper interpretation?)
TA (one example): If a share price has fallen to a certain value but no further many times in the past it is likely to fall no further this time. If it does fall further this time (ie. breaks support)it is very likely to keep falling.
Not a difficult concept to grasp really. This was Phaedrus' point in his original post for this thread.

[duncan macgregor]

LAWSO, Knowing we live in a stupid corrupt world suits me. I understand what happens and use it to my advantage. When a chart starts to react in an odd way i think wait for me and climb aboard. Incidentely i have a son in law that works for one of the companies mentioned and was informed a couple of weeks ago about likely outcome. When its all over the price will continue to drop. DISCLOSURE NIL SHARES HELD macdunk

[Sideshow Bob]

Monday 8 November 2:16 PM


NZ's Sanford f'casts yr profit to rise 12-14 pct



WELLINGTON, Nov 8 (Reuters) - New Zealand fishing company Sanford Ltd. (NZSE: SAN) said on Monday it expected annual profit to rise up to 14 percent, despite a flat first half result.

"With the inclusion of contributions from asset sales, foreign exchange hedging gains and reasonable trading results in the second half of the year, it is expected that the final result will be approximately 12-14 percent ahead of the result for the 13-month period last year," the company said in a statement.

The company posted a net profit of NZ$47.3 million last year and a flat first half profit of NZ$23.7 million, as large foreign exchange gains helped to offset lower export sales.

Sanford, New Zealand's only publicly listed fishing company, would release its annual result after the market closes on Nov. 25.

Shares in Sanford, which changed its balance date last year, last traded up five cents at NZ$4.40.

In October, Sanford said it would pay NZ$137 million to purchase assets of privately owned Simunovich Fisheries.

[kura]

What they don't say is: "Take out profit on asset sales and FOREX hedging, and we had a really awful year" suppose we just have to wait to see full extent on 25 November.

[JAMP]

The market has responded positively to the announcements of late in the short-term.

I will be watching with interest how things stack up following the profit announcement post-market closure on the 24th. Will the recent share-price gains hold or will we see the stock sold off again?

Regards JAMP
NZX: MCH MFT RBD SAN SKX SPN VTX WRI
Unlisted: BRK

[Phaedrus]

This chart update provides a picture-perfect textbook illustration of Support, when broken, becoming Resistance. The reversals that you see here are accurate right to the cent, even though they have been spread over 4 years. The market has a long memory.
Note that the big rise on Friday carried SAN above the crucial $4.70 resistance level.

http://img.photobucket.com/albums/v418/789456/SAN001.gif

[duncan macgregor]

Jamp, Only my opinion might be wrong but i know a little bit about the industry. In the short term profit will increase because of the scampi fishery recently purchased hense the rise in share price. The long term it is a different story. Over fishing reduced catches long term i think the outlook is not to good. The scampi fishery at the moment is a money makeing machine the other part is on decline. macdunk

[Mick100]

I agree Macdunk
I'v worked in the fishing industry for a few years and i can assure people that this industry is in serious decline - To put it simply, there's not enough fish out there to catch.

Rising fuel prices is just another nail in the coffin of the fishing industry.


Mick

[JAMP]

It must be the contrarian within I guess. There are a few storm clouds brewing, but somehow I don't believe that we have all the necessary components for a "perfect storm".

Supply issues are not going to go away, so there is no point in the industry burying their head in the recently dredged sand and thinking they will. I guess that leaves the other side of the equation, demand. Do we see a shift to the next best product (essentially leaving S&D curve unchanged), or do we see a new supply curve with equilibrium moving up the demand curve?

Regards JAMP
NZX: MCH MFT RBD SAN SKX SPN VTX WRI
Unlisted: BRK

[winner69]

Must be another thread somewhere for SAN but this is the only one when searching

However announced result late afternoon, headlines -

Group profit declined from $26.1m last year to $19.7m this year; however, the
profit decline would have been substantially greater had we not earned a
capital gain of $7.6m from the sale of our investment in Argentina and a
$2.2m gain on the reversal of our 2005 write down of our Canadian investment
in Fishery Products International Limited (FPI). The underlying result from
the main business activities was impacted by the continuing high New Zealand
dollar exchange rate and rising fuel prices.

Doesn't look too bad until you see the impact of the capital gains - which sort of says that the profit this year would have only been $9M odd without y=them

Nearly $400M of sales and stuff all profit must be frustrating for all .... all that hard work in smelly working conditions (at least for the workers) for not much profit but at least shareholders get 13 cents a share .... just as well as the capital gains eh

Highlights the fragility of NZ exporters and the impact of the high dollar and their inability to compete with the rest of the world when it is high .... and the ever increasing cost of fuel is a double whammy

Consensus might be that both could improve but another year of struggling for SAN if the NZD doesn't fall and their is some fuel cost relief .... at least management seems reasonably comfortable

Amazed that the SAN shareprice has stayed up as high as it has over the years .... still about where it was 3 years ago and not that many exporters can say that

[american psycho]

Try doing a share price chart with the USD. Theres about a 40-45 week lag until almost perfect correlation.

The share price tends not to move around a lot with SAN due to its illiquidity but should've been obvious to all where this result was heading with the NZDUSD at .75+.

Can't remember where I heard it, maybe from Barratt, but he said he was going to start hedging when the dollar hit 0.60 earlier in the year, but don't think it was there long enough to get any hedging in.

[Deev8]

... he said he was going to start hedging when the dollar hit 0.60 earlier in the year, but don't think it was there long enough to get any hedging in.Unfortunately the dollar hasn't been anywhere near US 60c this year, the low point was more than US 66c.

http://uk.ichart.yahoo.com/z?s=NZDUSD=X&t=1y

[american psycho]

how time flies... referring all the way back to june 06.

[Phaedrus]

A good LT industry to be in (but) I'd better take Phaedrus's general advice and wait for the downtrend to turn, first, before buyingI'll bet you're glad you hung fire there, Tobo. 6 months later and the downtrend still hasn't ended! There is some news, though..... Yesterday SAN released their 6 month report - profits are down by 79.4%. This must have come as a surprise to some holders because the shareprice has dropped another 19 cents since then. SAN's weakness is no news for TA users, though. For them, this is simply the continuation of a pre-existing confirmed downtrend that has been running for over a year, so far.

In spite of SAN being a relatively lightly traded stock, this chart provides some nice clear illustrations of simple, kindergarten level TA in action. Note the (unsustainably) steep uptrend. See how the break of the confirmed trendline gave a very timely Sell signal, locking in profits. This signal confirmed the OBV trendline break Sell signal that had preceded it by several weeks. The OBV is supposed to be a "leading" indicator, firing ahead of price action and that is certainly what happened here.
The magenta trendline marking the subsequent downtrend was broken in early 2009, but see how this "buy" signal had no volume confirmation. The OBV was not rising. Those who understand the importance of volume would have ignored this signal.
Look now at the uptrend of early 2009 as marked by the light green trendline. See how this uptrend continued to lack the confirmation of a rising OBV - In fact, the OBV was falling - this uptrend had no future. It ended after a few short months, beginning the current downtrend which has run for over a year, so far.
Note the surgical precision with which the peaks of this downtrend fall on the trendline. Neat eh? I never cease to marvel at just how linear trends can be.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/SAN527.gif

Lessons :-
(1) Don't buy downtrending stocks.
(2) Don't act on any single unconfirmed signal.
(3) By the time the company reports the bad news that "explains" the fall, it's too late.
(4) Don't buy downtrending stocks!

[macduffy]

Thanks, Phaedrus..

Another fine tutorial!

SAN would be on a lot of watchlists I would think - it's on mine - and the recent weakness in the NZD might have tempted some buyers. A good example of the value in overlaying a bit of basic TA over fundamentals.

[4be]

Good stuff Phaedrus, I was looking at SAN yesturday and was going to ask you to post a chart on them. Being a kindergarten level TA this has definatley helped. Cheers

[tobo]

A thing of beauty!
(Not the price if you are a holder, but the clear and present story told by this chart.)
Thanks, Ph.

I guess it wasn't TOO much of a surprise, as it had already dropped near $2.
But you've got to think that if an established business is valued purely on it's earnings, 80% drop on earnings could theoretically be reflected by an 80% drop in sp.

[iceman]

Based on the advise below, I believe Sanford is about to embark on a serious program to combine all their various recent aquisitions and exisiting operations into a streamlined and well managed operation. I believe this will include younger and fresher management taking on bigger and more important roles in the near future, which is a positive. With Hoki quotas expected to increase significantly over the next 3-5 years combined with significantly increased quota holdings through aquisitions, Sanford will need to invest in upgrading its catching and processing resources and they have a history at doing so at very good prices. Hopefully they will repeat this again BUT they need to make sure they invest in world class equipment. If they do, I would hope this company will go from strengt to strength in the next few years.
Discl: Hold SAN

Sanford Moving Forward

For some time the Board of Directors have been reviewing the development options for the future growth of Sanford Limited. While having been generally satisfied with the results over the last few years and have continued to support growth both by acquisition and direct investment they believe it is now time to start looking at new ways of going forward. Examples of acquisitions and investment include the Jones Group assets, the NIMPL expansion, the Bluff Salmon farm expansion, the Sealord mussel farm purchases, the new inshore vessel San Hikurangi and the expansion of mussel opening technology at Havelock. They remain concerned that we are still subject to significant outside influences that determine our performance. While exchange rates is a significant influence it is not the only one and they believe it is now time to put in place management strategies that build further on our strengths and fundamentally examine the way in which we transact our business from the ocean to our customers in a way that continues our leadership in sustainable seafood. We need to examine our products and processes and our systems of determining what are the best markets and channels to those markets and what product form maximises value. For some years we have struggled to earn our cost of capital and the only way to improve that is to lift our earnings and/or reduce our capital.

The Board has approved a revised management structure that will reduce the number of direct reports to me and allow me to focus on reviewing and developing the 10 or so strategic relationships we have with various companies. At the same time and on a more regular basis these three new roles will expose the Board to senior management tasked with moving the company forward.

Consequently from 1 January 2011 a new structure will be put in place with three direct reports to me.

Those roles will be:-



General Manager Operations

This role will cover all operating divisions of the business. It will include Inshore, Deepwater, Aquaculture, Pacific Tuna, China, and Industry Liaison roles. Division or existing Managers will report through the General Manager Operations position.



Greg Johansson will be appointed to this role and this will involve him relocating to Auckland and a new appointment to the role of Deepwater Division Manager based in Timaru will be made as a consequence of this.



General Manager Marketing and Development

This role will cover all marketing (including the appointment of a marketing team leader), quality management, product specifications, logistics, plus responsibility for Australian activities. It will also take responsibility for the formation of a product innovation and development capability that will look at developing more efficient, effective and sustainable ways of meeting customer requirements.



Vaughan Wilkinson will be appointed to this role which will involve him relinquishing responsibility for the Pacific Tuna and Industry Liaison roles but taking on responsibility for Australia and leading the new product innovation and development capability.



General Manager Finance and Administration

This role will cover all finance and banking, sustainability systems, secretarial and quota administration, accounting and IT systems, insurance, ACC and superannuation and executive support systems. Further development of our software systems and coordinating the expansion of our website and converting it to multi lingual will be an early focus of this role.



Dean McIntosh will be appointed to this role which will also require him to mentor with others in similar roles in similar sized companies.



The establishment of these roles is intended to strengthen the structure of the business and the existing executive will continue to meet with the same attendees and reporting as occurred in the past. These changes in no way diminish the roles or responsibilities of the Division Managers and they and I will continue to interact on a regular or as required basis.



If you have any queries or questions on this email please contact myself.



Kind Regards

><(((☺>

Eric Barratt

Managing Director

[Jaa]

This story about Sanford's use of slave labour to catch their fish is an absolute disgrace and very dangerous to NZ's good reputation for ethical food production and thus NZ Inc.

Whistleblower in hiding after 'slavery' storm (http://www.stuff.co.nz/business/industries/6481035/Whistleblower-in-hiding-after-slavery-storm)

Orginal Businessweek story:

Slaves Put Squid on U.S. Dining Tables From South Pacific’s Cruelest Catch (http://www.bloomberg.com/news/2012-02-23/slaves-put-squid-on-u-s-dining-tables-from-south-pacific-catch.html)

I will not be investing in Sanford until the current management and fishing practices are changed. Blaming and pursing the whistleblower is bad management in the extreme.

[iceman]

Yes this is a bad story Jaa and I find the initial response from the CEO very unfortunate. It is unacceptable for Sanford to be involved with any companies that behave like has been suggested in the Bloomberg story
However, the story is not about "Sanford's use of slave labour". The vessel which is at the center of this story has never worked for Sanford but the crew member who is rightly making the claims, did work on a Sanford associated vessel some years ago and has claimed some serious mistreatment happened onboard there as well. Claims that need to be investigated and the truth discovered ASAP. Sanford has had independent observers on all their associated foreign charter fleet for 10 years now and it is incomprehensible that this can happen while they were onboard. If the claims are proven correct, then the observer program has miserably failed, which would be a bad mark against Sanford's management.
I will wait for all sides of this story to come out before making any decisions on continued investment in Sanford. My experience with Sanford is of very capable management who take their responsibilites seriously and operate openly and honourably.
Below is a link (I hope it comes out Ok as I never seem to be able to post them correctly) to a recent article by Gareth Morgan which injects some reality into the discussion about use of cheaper labour in NZ.

http://www.gmi.co.nz/news/1342/outrage-at-foreign-fishing-fleet-hypocritical.aspx[/URL]

Discl: Hold SAN

[SparkyTheClown]

I agree with iceman. The story is highly unfortunate. On the principle that sunshine is the best disinfectant, I hope Sanford are open and forthcoming about what is discovered.

While their management run the company well, they are also being whacked by the currency exchange rate. That in itself is a reason to be cautious, but these allegations make me think Sanford one to miss for the foreseeable future.

[Marilyn Munroe]

I propose that all wages for foreign chartered fishing vessels be paid into an account under the control of an independent body for forward disbursement to the crew.

This would give an accurate record of what has or has not been paid and be used to settle wages disputes. It would enable NZ authorities to check payments against pay contracts that the crew sign and are required to be submitted to the authorities. This body should also have the power to act on the behalf of crew to obtain unpaid wages, and act against breaches of the Truck Act


BVoop boop de do

Marilyn

[iceman]

That is basically what the Government announced yesterday MM. From now on all wages/salaries will need to be paid into a NZ bank account in the name of the individual crew member and under his/her full control. This will ensure that pay rates are easily monitored. But of course there are still issues with what happens once these guys get back to their often very corrupt countries, but that is something the NZ Government or NZ companies can not control. The Government has also announced 100% observer coverage on all foreign charter vessels, something Sanford has been doing voluntarily for 10 years. Both rules are steps in the right direction.