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Opportunities Exist Even in Bad Times

NEW BRUNSWICK - When just about everyones losing moneywhich happens in every sector of agriculture at one time or anotherits easy to lose faith, writes Glenn Cheater.

It’s a rare person who has the acumen, and the nerve, to turn bad times into an opportunity.

Glenn Cooke is one such person. Twenty-two years ago he was fresh out of high school and hoping to find some sort of work to keep him in his tiny hometown of St. George on New Brunswick’s Bay of Fundy. Today, along with his brother Michael and father Gifford, he runs the fifth-largest farmed salmon company in the world.

The Cookes are obviously smart fellows, but Cooke Aquaculture would never have gotten so big, so fast, if salmon farming was an easy business to make money in.

“You look at the salmon business and there’s been a lot of failures and a lot of money lost,” says Glenn Cooke.

“We saw the need to grow, so as people wanted to leave the business, we’ve bought them. We’ve ended up buying a fair amount of bankrupt companies through the years and turning them around.”

The Cookes started with one marine cage and 5,000 fish with help from a grant. Lots of these grants were being handed out at the time by governments desperate to create jobs in ravaged coastal communities like St. George. A lot of people in these start-ups were quite good at raising fish, hatching smolts or processing.

But being good at production doesn’t guarantee profitability and so the Cookes got plenty of chances to put their philosophy that “opportunities are often disguised as problems” into practice.

Their first major buy was a bankrupt hatchery and their second, a processing plant in receivership. Whenever they heard of a company in trouble or owners wanting to get out, they took a look. And so they grew and grew and grew. Their relentless expansion took a quantum leap in the early part of the decade when salmon prices hit historical lows and their three largest rivals in Canada threw in the towel and sold to Cooke.

“For example, when we bought Heritage Salmon from Weston Foods, we found a report to the board of directors that said, ‘Salmon farming would no longer be profitable once the dollar hits 80 cents,’” recalls Cooke.

“Well, when we bought, the dollar was already 88 or 89 cents. But our attitude was that was just putting your head into the sand and giving up.”

Reinvention

Cooke and his management team made that 2005 purchase work by re-inventing its supply chain to take advantage of the loonie’s increased buying power. But as the dollar surged towards parity in 2007, they had to once again re-think every expense on the books.

“The currency will cost our business nearly $30 million in 2007,” says Cooke, in a surprisingly matter-of-fact tone.

So they got even more creative: Customers were asked to take larger packages, which saves both on packaging costs and labour. The company bought a local feed mill and made it more efficient, raising annual production from 45,000 tonnes to 65,000 tonnes annually. It even asked its ‘fish behavioralist’ to improve feed efficiency by six per cent.

That last point deserves closer examination: Who even knew there were fish behavioralists, much less that they worked for fish farms? Actually, Cooke knows of no other company that has one on staff. But in 2007, he sure earned his keep—that little six per cent gain in feed efficiency will save Five million CAN$ annually.

Hiring smart people is the foundation for the Cookes’ belief that every business can be run better. Along with the fish behavioralist is a chartered accountant whose main job is teaching other employees to think constantly about “process improvements” and another guy who devotes his days to “risk and loss control.”

Source: AtlanticFarmFocus

Ellen Hardy

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