Case Study: Clearwater Seafoods

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Case study: Clearwater Seafoods Jiapeng Wang ID: 25038788 Executive Summary This case study summarized Clearwater seafoods’ situation, Clearwater Seafoods, as a international trade company currently faces both foreign exchange rate risk and business risk. Exchange rate risks of Clearwater are mainly transaction risks that can be resolved by increase the hedging ratio. Meanwhile, money market hedging, match receipt and payment could also minimizing the forex risk. Business risks associated with Clearwater are consisted of resource sustainability, regulatory problem, regulatory problem and changing in consumption trend and organizing structure. Resource sustainability could be relief by the trading of excessed TAC, The changing in consumption trend can be hedged by further diversify species and market. And decentralization of current structure is expected to optimize Clearwater’s efficiency. Clearwater Seafoods Clearwater Seafoods (Clearwater) was founded in 1976 at Bedford, Nova Scotia as a local lobster distributor, and went public as an income trust in mid-2002. Clearwater’s business consisted of harvesting, processing and selling a variety of shellfish and groung fish species to the customer around the world. Clearwater’s customers were made of retail chains, distributors and corporate restaurants. Institutional customer contributed most of Clearwater’s sale; individual customers contributed less than 5% of its sales. Meanwhile, Clearwater was the largest publicly traded shellfish company in North America. Clearwater had twenty-three offshore harvesting vessels and 11 of them were engaged in processing at sea. Moreover, Clearwater also had 7 shore-based processing plants in Atlantic Canada and was working to modernize its fleet and promote offshore processing. Furthermore, Seafood harvesting industry was highly competitive. Clearwater’s major competitors

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