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February 28, 2020

High Liner reviewing China supply route in light of coronavirus

Canada-based seafood firm High Liner Foods has said it has taken action in relation to Chinese supplies in light of the coronavirus which originated in the country.

By Leonie Barrie

Canada-based seafood firm High Liner Foods has said it has taken action to reduce its reliance on Chinese supplies in light of the coronavirus which originated in the country.

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While wanting to protect the country from being overwhelmed by Omicron, China’s adherence to a Zero-COVID policy is resulting in a significant economic downturn. COVID outbreaks in Shanghai, Beijing and many other Chinese cities will impact 2022’s economic growth as consumers and businesses experience rolling lockdowns, leading to a slowdown in domestic and international supply chains. China’s Zero-COVID policy is having a demonstrable impact on consumer-facing industries. Access GlobalData’s new whitepaper, China in 2022: the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry, to examine the current situation in Shanghai and other cities in China, to better understand the worst-affected industry sectors, foodservice in particular, and to explore potential growth opportunities as China recovers. The white paper covers:
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Speaking to analysts after it released its Q4,2019 results, chief financial officer Paul Jewer said it is looking at alternative options to China for its supplies.

He said: “We do have a large volume of processing, primary processing that happens in China and other parts of Asia. Obviously we are monitoring the situation very closely.”

He said that because its Chinese suppliers typically go through a shutdown period for Chinese new year., it had already stockpiled produce and now has enough inventory to carry it through through to late May and early June.

Jewer said the company is not not anticipating a significant disruption in its supply at this point but he added “we do have a number of mitigation plans that we’ve already executed on to help reduce the risk, including a number of plans that we started some time ago to reduce our reliance on Chinese processors as risk reduction for our business overall”.

High Liner’s Q4 sales were US$21.3m lower than the corresponding period in 2018 at $221.6m but adjusted EBITDA was up by $6.8m to $18.8m.

Related Companies

Free Whitepaper
img

What is the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry?

While wanting to protect the country from being overwhelmed by Omicron, China’s adherence to a Zero-COVID policy is resulting in a significant economic downturn. COVID outbreaks in Shanghai, Beijing and many other Chinese cities will impact 2022’s economic growth as consumers and businesses experience rolling lockdowns, leading to a slowdown in domestic and international supply chains. China’s Zero-COVID policy is having a demonstrable impact on consumer-facing industries. Access GlobalData’s new whitepaper, China in 2022: the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry, to examine the current situation in Shanghai and other cities in China, to better understand the worst-affected industry sectors, foodservice in particular, and to explore potential growth opportunities as China recovers. The white paper covers:
  • Which multinational companies have been affected?
  • What is the effect of lockdowns on foodservice?
  • What is the effect of lockdowns on Chinese ports?
  • Spotlight on Shanghai: what is the situation there?
  • How have Chinese consumers reacted?
  • How might the Chinese government react?
  • What are the potential growth opportunities?
by GlobalData
Enter your details here to receive your free Whitepaper.

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