THE Fremantle Fishermen’s Coopera-tive Society has moved a step closer to a corporate restructure, airing a formal proposal to members to become an unlisted public company.
THE Fremantle Fishermen’s Coopera-tive Society has moved a step closer to a corporate restructure, airing a formal proposal to members to become an unlisted public company.
The plan to alter the 53-year old cooperative structure has been mooted for some time as the lobster processor has grappled with the need to improve its competitiveness and raise capital to start building a new plant at Robb Jetty, south of Fremantle, by January 2002.
But now the organisation has taken its case to members, with a special meeting to vote on the issue planned for July 6.
Such a change would signal a big break with the past, altering a structure which has left the cooperative vulnerable to competition since 1995, when a dispute with fishermen resulted in almost half its boats defecting to rival operators.
Cooperative president Vito Paparella said the decision was firmly in the hands of the 220-strong membership.
“We have to see what the share-holders think we should do with the company,” Mr Paparella said.
“We are steering the company in a completely different direction.”
Though it has won many fishermen back and turned around from a loss-making position in 1995-96, the dispute strengthened the hand of competitors in what is regarded as a tough business.
After the $863,279 net loss in 1995-96, the cooperative went into cost-cutting mode, recording a $100,000 net profit in 1996-97, $740,000 in 1997-98, $2 million in 1998-99 and $780,000 last year.
Bonus payments amounting to $1.5 million from the previous season affected last year’s profitability, but the group has also had to reduce members’ capital to pay fishermen who want to cash in their membership.
A company structure would make shares in the business more tradeable, relieving the cooperative of the burden of using profits and retained earnings to buy back equity.
Such a change also could pave the way for external parties to invest in the cooperative.
Mr Paparella said the cooperative was taking the issue one step at a time, with the priority being to determine the will of the members and then, if possible, raising the necessary funds from within the existing shareholder base.
However, he confirmed that if funds could not be raised from members, outside financing would be sought, preferably from parties who could contribute expertise to the business.
The Fremantle cooperative has developed a relationship during the past season with New Zealand lobster industry player George Stavrinos, who earlier had tried to buy into the WA industry.
“If it comes to that stage we would look at not just him,” Mr Paparella said.
“It is not just a matter of getting money and putting it into the company, it is about personnel and what they can do for the company.”
“I don’t think it would be hard to get the money we are thinking about.”
