Ireland Blyth Ltd (IBL) CEO Nicolas Maigrot spoke to AfricaMoney on a wide spectrum of the Mauritius-based conglomerate’s activities, ranging from the seafood sector to the financial services sector. He noted IBL’s intent to make a foray into India with a fish processing plant, likely to be operational by next year. He also commented on the tax treaty with India, expressing the firm belief that India will appear again on investors’ radars very soon. Our economy expert stressed that Mauritius provides an ideal eco-system and platform for investing into Africa.
- What has been IBL’s major achievement in 2013?
I would first of all say a major achievement has been the overall financial results for the year 2012-2013, which represent the result of the hard work of each and every employee of IBL. On October 4, 2013, the financial results of the IBL group for year 2012-2013 were presented to brokers, fund managers and the media. We were happy to announce that group revenues reached nearly Rs 20 billion while the operating profit increased by 21% from Rs 1,018.703 million in 2012 to Rs 1,231.851 million in 2013. The seafood sector had also contributed up to 31% of the total income, boosting group profits significantly. I would like to lay stress that first, based on this increased revenue, IBL demonstrated good resilience despite the global crisis. It also reaffirmed IBL’s commitment to the development of Mauritius; our country remains at the heart of the group’s priorities with an investment of Rs 700 million into the local economy over the last two years.
- Could you please comment on IBL’s venture in Gabon?
We concluded, in February 2013, a Public-Private Partnership agreement with the Gabonese government with the objective of implementing a seafood products industry in Gabon, in view of the diversification strategy of the Gabonese economy initiated by President Ali Bongo Ondimba. On the basis of the expertise acquired in the seafood hub during the past fifteen years, IBL will become, thanks to this agreement, the strategic partner of the Gabonese government for the development of the seafood and marine industry. The agreement provides for the reorganisation and the management of an already existing unit, creation of other industrial structures, development of a local high sea fishing sector and creation of a shipyard.
- IBL is planning to set up a fish processing plant in India. How is that project working out? In case all approvals are received, when can the plant be expected to open?
IBL is planning to set up a factory in Kerala in South India for the production of canned sardines, fish meal and fish oil. Currently, we are in the process of applying for all the necessary permits. We hope to start the construction of the building within 3 months. If everything goes as planned, we should be able to start production by the end of next year, in 2015.
- In the half-yearly financials, management noted that the 5% growth in revenue over last year yielded an increase of less than 1% in profit from operations for the half year ended December 2013. What were the main factors which caused a drag on operating profits?
The 5% growth in revenue over last year yielded an increase of less than 1% in profit from operations confirming the continued pressure on margins. The Engineering and Retail Sectors were particularly affected whilst new lines of business in certain other sectors helped to mitigate the impact. Profitability of our seafood operations in the last six months was impaired due to deteriorating market conditions. However this has been compensated by the good performance of the marine activities. Logistics, Aviation & Shipping had done very well and we foresee a brighter future. Besides, our commercial and financial sectors have been very resilient over this period.
- Also, the revenue contribution of the ‘Seafood and Marine’ sector went down to Rs 2.97 billion for the half-year ended 31 December compared to Rs 3.00 billion in the corresponding period in 2012 while profits declined from Rs 268 million to Rs 267 million. What were the factors which impaired the financial performance of your mainstay, the seafood sector?
The tuna industry is highly volatile and dependent on various factors. It is a seasonal activity influenced by weather conditions and is subject to the trends in the international market. From one year to another, there are important fluctuations in the cost of raw materials that can have a considerable bearing on the turnover of our factory. One should not forget that as much as 80% of the finished product is closely linked to the cost of the fish.
- You mentioned at the Reuters Africa Summit that, over the last 2 years, business from India has been coming down. Moreover, most recently, Singapore dethroned Mauritius as the largest source of FDI into India. Could you please elaborate on this situation in context of your financial services segment?
Indeed, our financial services division has witnessed a reduction in the volume of investment flows with India for the last two years. However, we think that it is important to stress the fact that the overall and absolute value of FDI’s flowing into India has also been significantly reduced during the last couple of years.
One cannot deny the fact that the perpetual uncertainty around the Mauritius-India Double Taxation Avoidance Agreement (DTAA) contributed towards this reduction in business. One must also reckon the fact that India was in ‘election mode’ for the last year or so, and that the economic challenges it had to face are quite important.
Moreover, we firmly believe that India will appear again on investors’ radars very soon and that FDI will start flowing in over again.
- How can this impact be mitigated, if at all, especially in context of IBL’s financial services segment?
Our financial services division is well poised to seize the opportunities offered by the African continent. We have recently created a dedicated Africa Desk within our subsidiary DTOS Ltd in order to better serve the investors’ community looking at Africa and its immense potential.
Our team of professionals is fully geared to advise and assist investors in the legal and tax structuring of their investment vehicles, in the re-engineering of their existing operations through our Business Model Optimisation (BMO) Africa structure, and in their financial and accounting outsourcing needs. Our wealth management value proposition complements this overall offering.
We have no doubt that Mauritius provides the ideal eco-system and platform for investing into the Big Continent. Not only is the island leveraging on DTAAs signed and ratified with 17 African states, but Mauritius boasts of a strong and diversified economy, a perfectly bilingual population, a tradition of political and social stability, a comprehensive road, air and ICT infrastructure, a pool of skilled and qualified professionals, a well-established airport and Freeport sector, a broad and forward looking legal framework as well as a proven centre for international banking and finance.
[Edited excerpts from an exclusive interview]
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