SAPMER: Strategic Growth and Its Financial Implications
(6 pages of text)
SAPMER SA was a Southern Ocean fishing company started by three Réunion Island entrepreneurs with one ship in 1947. The company grew from an entrepreneurial venture to a corporate acquisition, then back to a beloved family business not expected to make much money. But in 2006, SAPMER SA tested the waters with a new tuna venture. The venture was successful, but the company saw a better long-term opportunity in occupying a niche position. SAPMER SA launched a strategic rebirth with a five-year plan to develop a new segment: super-frozen tuna fishing and processing in the Indian Ocean, addressing premium Asian markets in sashimi, tataki, and tuna loins and steak. SAPMER SA’s strategy resulted in strong performance, but in early 2013, when examining the financial records and the terms for purchasing newly acquired ships, the owner could see challenges ahead. To manage the challenges, the owner needs to know the reason for the improvement in return on equity, what potential problems could be identified from a DuPont analysis of the financials, and what bottlenecks to anticipate in the coming years.
This case has been designed for courses on financial statement analysis. It can be used in graduate programs, EMBA classes, and with executive audiences. Given the nature of the fundamentals involved, the case can also be adapted for use in more advanced courses such as mergers and acquisitions. After working through the case and assignment questions, students will be able to do the following:
- Analyze financial statements and identify the features that correspond to the company’s strategic growth.
- Conduct a DuPont analysis to identify the potential risks related to the company’s business.
- Discuss the business problems that may arise from the identified features and risks, comment on the efficiency of the fixed assets and the company’s business bottlenecks, and suggest possible solutions.
Agriculture, Forestry, Fishing and Hunting
France, Small, 2007-2012
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