JAZADCO’s aquaculture segment growth boosted 2020 results, eyes higher e-sales: CEO

Jazan Energy and Development Co.’s (JAZADCO) aquaculture business division was the key growth driver for the company’s results in 2020, Chief Executive Officer Bedor Alrashoudi told Argaam in an interview.

The aquaculture sales contributed 55% to JAZADCO gross sales in 2020, compared to 46% in 2019.

JAZADCO turned to profit in 2020, bucking two years of losses, Alrashoudi said, adding that the company still has a lot to do to maintain profit sustainability and growth.

Despite the COVID-19 outbreak, JAZADCO managed to implement its restructuring plan, cost-cutting strategies, in addition to new sales and marketing policies.

Here is the full interview with CEO, Bedor Alrashoudi:

Q: JAZADCO reported around SAR 11 million in profit in 2020, versus losses in 2019. How do you rate these results?

A: JAZADCO swung to profitability in 2020, bucking two years of losses, backed by turnaround initiatives. However, we still have a lot to do to maintain profit sustainability and growth. Despite the pandemic outbreak, we succeeded in implementing the restructuring plan. We continued to adopt a cost-cutting strategy and new marketing and sales policies, which helped increase sales and earnings. JAZADCO reported an 18% rise in sales revenue to SAR 85 million in 2020, compared to SAR 72 million in 2019. The aquaculture business division is the key growth driver in 2020; shrimp sales jumped by 40% year-on-year (YoY) to SAR 47 million last year. Accordingly, the aquaculture segment accounted for 55% of the company’s gross sales in 2020, versus 46% in 2019.

Q: What about the shrimp production and sales in Q4 2020, compared to Q3 2020? Can you tell us about the mango farm?

A: In Q3 2020, JAZADCO produced 890 tons of shrimp and reported approximately SAR 10 million in shrimp sales revenue, whereas it produced 1,200 tons of shrimp with SAR 14 million in sales revenue during Q4 2020. This increase underpinned the company’s development efforts, which boosted production capacity and helped cut the operating expenses. The mango farm began production in March 2021 (the beginning of the mango season in Jizan). We expect around 2,000 tons in production this year, compared to 1,500 tons in 2020.

Q: Can you tell us in figures how did ‘Mango Jazan’ and ‘Fish Day’ help increasing the company’s e-commerce sales?

A: Mango Jazan helped boosting sales by more than SAR 3 million, and earnings by more than SAR 1 million, as JAZADCO seeks to increase the company’s e-commerce sales over the coming years. Online marketplaces currently stand as a key pillar of any marketing strategy, given their dominance during the pandemic outbreak. We seek to bolster our presence in the e-commerce field, in line with our expansionary plans, and provide our customers with a distinguished online experience.

Q: How did the real estate segment fare in 2020, compared to a year earlier?

A: The real estate segment reported nearly SAR 11.3 million in revenue in 2020, up by 17% YoY from SAR 9.7 million in 2019.

Q: Does the company plan to undertake new realty projects in 2021?

A: The company is currently developing the real estate business division, sending revenue 17% higher in 2020. We continue to develop our existing projects and study new promising developments, as the company sees great potential in the real estate sector in Jizan.

Q: What are the company’s targets beyond Jazel Investments’ takeover deal ?

A: The key targets of the acquisition of a 100% of Jazel Investments Limited are:

- The acquisition will allow JAZADCO to tap into new fields, in line with its growth and diversification strategy, and accordingly, eliminate market risks.

- To boost JAZADCO geographical foothold.

- To expand and diversify the company’s clientele; a step which can be fulfilled much easier through acquisitions, compared to building up new client base.

- The new synergies that will arise from the acquisition of both companies, in addition to the administrative as well as the technical expertise.

Q: Tell us about the factors that helped improve the company’s performance in 2020?

A: Last year was full of challenges, given the negative impact of the pandemic on the company’s expansions. However, these factors can include:

- The implementation of a turnaround initiative;

- The development of the aquaculture business and its infrastructure, increasing production by 41% and to a great extent, cutting operating expenses;

- Improving the agriculture segment infrastructure and diversifying the product basket;

- Adopting new marketing and sales policies, which reflect positively on sales across the board.

Q: How did the company survive the negative impact of the COVID-19 outbreak?

A: The pandemic outbreak delayed some of the company’s expansionary plans. However, we successfully managed to expand our client base locally and globally, and implemented cost-cutting strategies, which helped to mitigate the pandemic’s negative repercussions, reduced selling prices to maintain market share and penetrated new markets.