“We think we will see more and more fish companies, like Mowi, that will pay more attention to integrated approaches”

Private equity fund creating value in Italian smoked salmon.

In a previous article, CEO of Milan-based Arcadi Simone Arnaboldi explained that he was taking advantage of opportunities in a fragmented salmon market in Italy.

With solid inroads to retail channels, Arcadia acquired 100 per-cent of the shares in the salmon smoker Starlaks in February.

Big transformation
A few months on, skilled people have been brought into the company such as managing director Lelio Mondella. Experienced Mondella led the major market caviar brand Calvisius which also had salmon in its portfolio.

A new CFO is soon to join and a plant manager and a sales director were introduced recently, so “a big transformation at the company”.

Arnaboldi expects this fiscal year, revenues will increase by ten per-cent. Furthermore, a new facility is being built, to become operational next year which will allow 40-50 per-cent increase in volumes.

Consumption in terms of HORECA in Italy is starting to grow again, but the decrease in the consumption in that segment was counterbalanced by the increase as people were eating much more at home.

“Since the company is generating majority sales from retail channels, it has benefited from this,”  said Arnaboldi.

He added for a French or German player to enter the Italian market would be very difficult.

“The shelf life of the product is just 30 days so you have to consider the transport and the stocking of the goods and if you decided to serve the retail industry you must be very rapid because Starlaks every day receives orders for goods to be delivered the day after,” explained Arnaboldi.

“It is very difficult for somebody who is not close to the big ways of the retailers of the logistics in order to comply with all the things necessary,” he added.

Salmon prices
Arnaboldi was pragmatic about the volatility of salmon prices.

“There is not a long term trend in the sense that in the period of time we analysed the salmon price, we saw in many periods a strong increase but it was limited to a certain number of months. In most cases after two, three, four months, the price started to decline and so there is not a real long term trend, and we obviously hope there will not be,” he said.

“The other thing is that it’s quite interesting for our prospect for a future exit because our business is to enter a company in three to five years to create value and to sell to a buyer and return the money to our investors. We think we will see more and more fish companies, like Mowi etc, that will pay more attention to integrated approaches and try to become transformers and not just the providers of fish,” he concluded.

Are you planning other acquisitions?

“In our investment period, we will look for sure, because the market is, as we say highly fragmented. And there could be other opportunities. Also, to consolidate companies that specialise in other species of fish. Frankly, to date, we are strongly focused on having full control of the company,” he concluded.


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