Montreal-based Champlain Financial has acquired Riverside Lobster International for an undisclosed amount. Moving forward the firm plans to merge the company with its existing portfolio company Chéticamp Fisheries International Inc. to create an industry giant with annual sales of C$175 million (US$140 million).
The merging of the two companies will not only create a leader in Canada’s Maritime provinces, but also will position the new entity for future consolidation in the $10 billion global lobster and crab industry.
“Both companies are strategically located in the most productive crab and lobster regions of the Nova Scotia Coast,” said Marc Poulin, the incoming executive chairman of Champlain Financial’s seafood platform. “I am pleased to associate myself with this outstanding management team, led by David Deveau at Riverside and Pierre Leblanc at Cheticamp, both experienced executives who enjoy a strong reputation throughout the industry.”
In business since 1997 in St. Mary’s Bay, Nova Scotia, Riverside Lobster supplies customers across more than 20 countries in North America, Europe, Asia, and the Middle East with frozen cooked lobster meat, whole cooked lobsters, frozen raw lobster tails, as well as scallops, snow crab, and herring roe.
Cheticamp Fisheries specializes in domestic and international seafood exports that include both cooked and frozen snow crab, live or fresh-frozen lobster, and herring roe, according to the company website.
“We are very pleased to have found a partner like Champlain through Avi’s and Gary’s efforts, and believe that Riverside’s future with Champlain, including the combination with Cheticamp Fisheries, will be bright,” said David Deveau, president and CEO of Riverside, and who will retain a “meaningful stake” in the company.
Lobstahs!
This strategic move by Champlain Financial to position itself as a key supplier in the North American lobster industry could prove highly advantageous given recent trends and numbers.
Last year the price for lobsters saw a 37 percent increase, bringing prices to their highest point in decades, despite the lobster catch in the U.S. and Canada reaching recent highs. In the U.S. alone last year, the catch totaled 146 million pounds – close to the record 150 million pound catch in 2013, and 66 percent higher than 10 years before, according to the National Marine Fisheries Service reports the Press Herald.
As high as this output is, it cannot keep pace with climbing demand. Consumption in the U.S. has increased 38 percent in the 10 years between 2005 and 2015, prompting Canadian lobster exports to the U.S. to jump 11 percent to 31 million kilograms in 2015, according to Euromonitor.
As is often the case, another huge driver for demand is Asia. As live lobsters grow as a status symbol for upwardly mobile middle class consumers, U.S. lobster exports to China reached 12 million pounds and $85 million three years in a row, and Chinese consumption of lobster topped 879,300 tons last year – a 32.47 percent increase over 2014 levels.
Meanwhile, a 62 percent increase in lobster shipments in 2015 forced Nova Scotia’s Halifax Stanfield International Airport to expand its air cargo capacity. Given market dynamics such as these, further consolidation on the part of Champlain would only strengthen returns on investment.
-Lynda Kiernan
Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com
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