'The reason for our slow growth is to ensure the sustainability of our agriculture farming. If you develop too fast, you may compromise in terms of sustainability. Sustainability is actually the keyword to progress forward with,' says SBH Marine Holdings Bhd executive director Saw Leng Hean. (Photo by Patrick Goh/The Edge)

KUALA LUMPUR (April 8): Newly listed frozen seafood company SBH Marine Holdings Bhd, which gained 20.45% on its Bursa Malaysia debut, has seen the shipping cost to its overseas markets increase amid the Red Sea crisis, according to its executive director Saw Leng Hean.

However, the Perak-based company said that it will pass the shipping cost to its exporters.

“Basically, for the shipments sold to the European countries and also to the Middle East, it actually affected the shipping groups. All the shipping rates have increased,” Saw said at a press conference after the company’s ACE Market listing ceremony.

The Red Sea crisis would also not be an issue to SBH Marine, as the company does not heavily rely on the European market, according to Saw.

“For us, it is not an issue, because our sales are also liable to the Asian countries as well,” he added.

Among SBH Marine’s major export markets are South Korea with 21.69% in revenue, followed by Italy (20.65%), Taiwan (16.96%) and Türkiye (15.85%).

Focus remains on premium seafood market

SBH Marine again said that it will remain focused on its premium seafood product offerings to set the company apart from its competitors.

SBH Marine’s geographical market comes from overseas markets, which contributed 93.83% of revenue at end-September 2023, compared with Malaysia’s 6.17%.

“We all know that our surrounding neighbours — [for example] Vietnam, Indonesia, Thailand and India — are actually targeting the commodity market, which is [for] lower-priced items [of frozen seafood products],” Saw said.

Besides higher demand in overseas markets, SBH Marine also prioritised overseas market growth over domestic expansion due to a lack of local consumer readiness for frozen seafood products.

“Malaysia is not ready for the premium market yet, because there is actually an inconsistency in the knowledge of Malaysians. Everyone looks for cheaper items, and they also have the impression that if they buy fresh seafood from the fish market, it is more fresh. That is the assumption,” he explained.

He acknowledged the need for consumer education as the benefits of frozen seafood, such as quality, hygiene and safety measures, are not fully understood by Malaysian consumers.

“It needs time to educate them (local consumers) to understand that frozen seafood is actually a better choice, given all the seafood which are processed by us are fresh — and we also send them for microbiological analysis,” he noted.

Prioritising long-term sustainability

Addressing the group’s moderate growth in net profit, Saw said that this is due to SBH Marine’s sustainable practices to prioritise the long-term viability of its agricultural farming.

“The reason for our slow growth is to ensure the sustainability of our agriculture farming. If you develop too fast, you may compromise in terms of sustainability. Sustainability is actually the keyword to progress forward,” he said.

SBH Marine recorded a net profit of RM8.4 million for the cumulative nine months ended Sept 30, 2023 (9MFY2023), on the back of RM144.21 million in revenue.

In comparison, it posted a net profit of RM8.77 million for 9MFY2022, with a revenue of RM140.09 million.