Harbinger Group Inc.
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SEC Filings

DEF 14A
HRG GROUP, INC. filed this Form DEF 14A on 11/15/1995
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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.
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 States.
 
  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 1994 or 1993 fiscal years were
not materially impacted by activity related to Venture.
 
  Marketing. Most of the Company's products are sold directly to about 300
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 $34,143,000 as of September 30, 1994 compared to
$33,504,000 on September 30, 1993. While the fishing season usually extends
from April into December, sales from inventory continue throughout the year.
 
  The Company's fish meal is primarily sold to domestic feed producers for
utilization as a high-protein ingredient for the poultry industry. Fish oil
sales primarily involve export markets where the fish oil is refined for use as
an edible oil.
 
  Competition. The principal competition for the Company's fish meal and fish
solubles are other protein sources such as soybean meal and other vegetable or
animal products. The Company believes, however, that these other sources are
not complete substitutes because fish meal offers nutritional values not
contained in such sources. Vegetable fats and oils, such as soybean and palm
oils, provide the primary market competition for fish oil. In addition, the
Company competes against domestic, privately owned menhaden fishing companies
as well as international producers of fish meal and fish oil derived from
species such as anchovy and mackerel.
 
  Fish meal prices generally bear a direct relationship to prevailing soybean
meal prices, while prices for fish oil are generally influenced by prices for
vegetable fats and oils, such as soybean and palm oils. Thus, the prices for
the Company's products are established by worldwide supply and demand
relationships over which the Company has no control, and tend to fluctuate to a
significant extent over the course of a year and from year to year.
 
  Regulation. The Company's marine protein operations are subject to federal,
state and local laws and regulations relating to the location and periods in
which fishing may be conducted, as well as environmental and safety matters.
The Company, through its operation of fishing vessels, is subject to the
jurisdiction of the U.S. Coast Guard, the National Transportation Safety Board,
and the U.S. Customs Service. The U.S. Coast Guard and the National
Transportation Safety Board set safety standards and are authorized to
investigate vessel accidents and recommend improved safety standards. The U.S.
Customs Service is authorized to inspect vessels at will.
 
  The marine protein operations of the Company also are subject to federal,
state and local laws and regulations relating to the protection of the
environment, including the federal Water Pollution Control Act of 1972, which
was significantly modified in 1977 to deal with toxic water pollutants and
renamed as the Clean Water Act, and which imposes strict controls against the
discharge of oil and other water pollutants into navigable waters. The Clean
Water Act provides penalties for any discharge of pollutants in reportable
 
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