Harbinger Group Inc.
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SEC Filings

HRG GROUP, INC. filed this Form POS AM on 02/22/1994
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     Fishing.  The Company owns a fleet of 52 fishing vessels and 27 spotter
aircraft for use in its fishing operations and also leases or charters
additional vessels and aircraft where necessary to facilitate operations.
During the 1993 fishing season in the Gulf of Mexico, where the fishing season
runs from mid-April through October, the Company operated 34 fishing vessels and
24 spotter aircraft.  The fishing area in the Gulf stretches from the south
Texas coastline to the panhandle of western Florida, with a concentration off
the Louisiana and Mississippi coasts.  The fishing season on the Atlantic coast
begins in early May and usually extends into December.  During the 1993 fishing
season the Company operated 9 fishing vessels and 7 spotter aircraft along the
mid-Atlantic coast, concentrated in and around the Chesapeake Bay.     
     Menhaden usually school in large, tight clusters and are commonly found in
warm, shallow waters.  Spotter aircraft locate the schools and direct the
fishing vessels to them.  The principal fishing vessel is a steamer, which
transports two 40-foot purse boats, each carrying several fishermen and one end
of a 1,500-foot net.  The purse boats encircle the school and capture the fish
in the net.  The fish are then pumped from the net into refrigerated holds of
the steamer, which unloads the fish at the Company's processing plants.     
     Processing.  The Company owns five processing plants--three in Louisiana,
one in Mississippi and one in Virginia--where the menhaden are processed into
fish meal, fish oil and fish solubles.  The fish are unloaded from the vessels
into storage boxes and then conveyed into steam cookers.  The fish are then
passed through presses to remove most of the oil and water.  The solid portions
of the fish are dried and then ground into fish meal.  The liquid that is
produced in the cooking and pressing operations contains oil, water, dissolved
protein and some fish solids.  This liquid is decanted to remove the solids and
is then put through a centrifugal oil/water separation process.  The separated
fish oil is a finished product.  The separated water and protein mixture is
further processed through evaporators to remove the soluble protein, which can
be sold as a finished product or added to the solid portions of the fish for
processing into fish meal.     
     Fish meal, the principal product made from menhaden, is sold primarily to
poultry feed producers as a high protein ingredient.  It is also used as a
protein supplement in feed formulated for pigs and other livestock.  Each use
requires certain standards to be met regarding quality and protein content,
which are determined by the freshness of the fish and by processing conditions
such as speed and temperatures.  Fish solubles are a liquid protein product used
as an additive in fish meal and also marketed as an independent product to
animal feed formulators and the fertilizer industry.     
     Fish oil from menhaden is widely used for human consumption as an edible
fat in Europe.  Refined and hydrogenated menhaden oils have a wide variety of
applications as ingredients of margarine, cooking oil and solid cooking fats
used in baked goods.  The U.S. Food and Drug Administration has approved the use
of fully hydrogenated menhaden oil and partially hydrogenated menhaden oil for
human consumption in the United States and is considering a petition for use of
refined unhydrogenated menhaden oil for human consumption in the United 
     A modernization of the Company's menhaden processing plant located in
Abbeville, Louisiana was completed during fiscal 1993.  The Company expects that
the modernization will enable the Abbeville plant to meet new, more stringent
state environmental regulations and result in a more economical and efficient
operation.  The modernization is also expected to make the Abbeville facility a
more efficient producer of special quality meals, premium products used in baby
pig and dairy cattle feeds.     
     In August 1993, the Company acquired a 60% equity interest in Venture
Milling Company ("Venture"), a Delaware corporation involved in the milling of
animal feeds and protein ingredient products for the poultry, hog and dairy
industries.  Venture leases and operates a feed mill in Seaford, Delaware and
manages its processing operations and sales activities independent of the
Company.  The Company's financial results for the 1993 fiscal year were not
materially impacted by activity related to Venture.     
     Marketing.  Most of the Company's products are sold directly to about 250
customers by the Company's marketing department, while a smaller amount is sold
through independent sales agents.  Total product inventory (at the lower of
average cost or market) was $33,504,000 as of September 30, 1993 compared to
$18,765,000 on September 30, 1992.  While the fishing season usually extends
from April into December, sales from inventory continue throughout the 


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