PE-backed Portuguese frozen processor diversify octopus suppliers as Moroccan prices rise

Portuguese frozen seafood processor Grupo Brasmar has diversified its suppliers this year, as prices rose on lower catches and rising global consumption, while the Moroccan octopus season is about to end.

Meanwhile, T1 octopus prices in Morocco reached €15-16 per kilogram, up from earlier this year, while T2 prices rose to €14-15/kg. “We now have octopus suppliers in Morocco, Senegal, Mauritania and Portugal,” the firm’s CEO, Sergio Silva told Undercurrent News.

Brasmar investment

Brasmar, which took investment from Spanish private equity GED Capital Development last year, is still on track to reach a revenue of €170 million in 2017. The firm is targeting particularly the retail channel to increase sales, according to Silva. “Our sales are growing mainly in Europe, one of our mainly markets. The fact that we keep the biggest part of our production here promotes the increasing,” Silva said.

However, high octopus prices have squeezed processors’ margins. Silva pointed out that because of increasing demand from the US, octopus prices were expected to remain relatively high. “Octopus is becoming more popular in some markets like United States. The consumption will continue to grow, so the pressure on high prices will probably remain,” he said.

Meanwhile, the Moroccan octopus season will end on Sept. 14, earlier than expected, sources said. “Prices [of Moroccan octopus] are really expensive,” one Moroccan octopus supplier said.

Silva pointed out that higher competition has impacted margins on cod’s sales. “The margins are very low on this segment,” Silva said. “We buy cod in Norway and Iceland. We try to create with our supplies long term relationships,” he said.

Silva pointed out that the firm was not planning mergers and acquisitions at the moment.