Delivering on maximising shareholder value is a priority and can only be achieved through safe and sustainable operations. Tassal has been a top quartile earner for the ASX 200 over the last five years – and has achieved this while largely balancing environmental, operational, financial and community value.
We continue to execute on our strategy to be a world leading Seafood company by leveraging industry leading scientific know how; sustainable and efficient production; respect for the earth’s resources and the communities in which we operate; and prudent commercial management.
Whilst community, government and regulatory support have been positive and largely remain supportive, growth presents challenges, which must be addressed proactively to maintain community value and a right to operate.
As Tassal and the Tasmanian Salmon industry seek to grow Salmon farming output, this growth will bring an element of risk to optimal growth and forecast plans, particularly as Tassal grows into newer regions. Ensuring the co-dependence of social licence/community value and operational planning through strategic planning processes will be critical.
We have achieved a ‘step change’ in biomass and fish size with fish size harvested by the end of FY2017 being circa 4.80kg head on gutted (HOG). Underlying biomass and fish size is expected to continue to improve in FY2018 and beyond. Our target fish size is an average of 5.00kg HOG.
De Costi Seafoods has driven Seafood sales and category growth with a focus on highly innovative product and packaging formats, and, together with higher margin products, has delivered results.
Tassal’s strategic priorities supporting the company’s ‘Right to Operate’ are:
Environment: Maintaining world leading environmental certification, which is independently audited
Societal/Community Value: Increasing investment and promotion of societal/community value credentials with a dedicated Community Foundation framework with appropriate engagement and perception metrics in place
People Safety: Continuing to invest in our people and drive towards Zero Harm for Everyone, Everywhere
Tassal continues to successfully mitigate (where possible) risk at both the sales and marketing (customer and consumer) and production ends of its business. However, Tassal is an agricultural stock and continues to focus on further risk mitigation in the hatching and growing of Salmon with particular focus on operational risk in the marine environment. Our risk management system is robust, and, although our overall risk appetite is conservative, risk appetite differs for each area of the business. We adopt an adaptive management framework, which encompasses monitoring requirements and management practices aligned with the precautionary approach.
Tassal’s risk mitigation strategies counter factors external to management’s control including:
Disease – potential of emerging viral diseases
Marine – access and approval of new sites
Environmental – predicting environmental conditions and adapting to environmental challenges
Quality science needs to permeate every aspect of aquaculture. Scientific modeling along with baseline studies remain the best tools to decide where to farm, at what scale, and under what regulatory conditions and process refinements. Science is also critical to how Tassal can adapt its fish stock and farming practices to address climate change.
Tassal’s ‘Right to Grow’ strategic priorities are:
- Increasing volume to position Tassal with the superior biomass in the market, optimal margins (whether through price and/or cost out) and greatest scale, to capture the increasing demand for sustainable protein in Australia and internationally
- Enhancing Salmon growing performance on the back of Tassal’s Selective Breeding Program (SBP) to reduce operating costs and improve return
- Maintaining existing channels to market as Tassal grows volume in line with the growth of the domestic market
- Continuing to improve traceability and freshness of products given consumer trends
- Positioning now for the next wave of growth, given typical capital cycle lead times of up to five years