May 27 2015, 1.00pm CST
Evergreen breaking into Africa
Maybe of some comfort to the Chinese aquaculture industry is that China’s no. 1 shrimp and tilapia feed producer, Guangdong Evergreen Feed Industry, is facing the same issues as its competitors.
High raw material costs, high labor costs and diseases in the sector are all top challenges for Evergreen VP Chexi Chen.
“In terms of the shrimp industry, for 20 years, the Chinese have only cared about economies of scale,” he told IntraFish when we sat with him for a tea between conference sessions.
“Anything related to animal health has been neglected,” he said.
“And like any food-oriented company in China, we have a few strategies to change the future,” he told us.
“But it has to be cost-efficient. And the only way to do this is to bring down labor costs and use more automation,” said Chen, who’s company produces over 100,000 metric tons of animal feed each year.
Evergreen has been communicating with and educating farmers for the last decade and as more problems have occurred – even in the last 3 years – “farmers have become more receptive to change”, he told us.
Evergreen – who’s market is 90 percent domestic – has also successfully been putting down roots in Vietnam where it already has two feed factories and one more in the pipeline, and will “continue to make investments in Myanmar, India and Indonesia,” according to Chen.
The company is also involved with setting up a JV with a state-owned Egyptian enterprise – its first foray into Africa.
IntraFish's newest industry report African Aquaculture: Breaking Through the Ceiling talks to the experts, reveals the key players and species and explores investment opportunities in this as-yet unexploited aquaculture nation. Read more here or pre-order.
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May 27 2015, 12.00pm CST
Playing the game
“When you play the game, you have to look at all the players,” was how FAO’s Tipparat Pongthanapanich eloquently described the need for China’s aquaculture sector to become more sustainable and quality-driven to gain back ground in export markets.
Biology, technology, environment and social and economic issues are all interconnected, explained Pongthanapanich, saying China had to move away from purely focusing on production and volumes.
“When you come to sell, markets and people demand more than just food for their stomach,” she said.
“It is getting tougher and tougher for everyone in the industry,” she said, but sustainable, high quality and socially responsible production was the “way to go”. You must “look long, and not short,” she said.
Relecting on Cui He's presentation before her's, Pongthanapanich surmised that for CHina, the domestic market is a good option, with less stringent requirements. However, for her home country of Thailand, she laughed that they had little option but to export: "There are only 65 million of us. We have nowhere to go!"
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May 27 2015, 11.00am CST
"Unprecedented" difficulties bring new Chinese focus on domestic market
“Unprecedented” difficulties for China’s tilapia and shrimp production sectors means its competitive advantage has declined “dramatically”, according to Cui He, exec VP and secretary general of the China Aquatic Products Processing and Marketing Alliance (CAPPMA), addressing delegates at a packed conference session this morning.
“Export trade [for China] faces a very awkward situation,” said He, with declining profitability and competitiveness leading to challenges for SMEs to gain access to finance.
For shrimp in particular, exports declined for the third consecutive year in 2014, falling to the lowest level in a decade. However more concerning is the drop in value, which decreased for the first time since the United States – China’s biggest export market – introduced anti-dumping tariffs.
The one time biggest exporter of shrimp to the United States, China fell to no.6 in 2014 -- a rating He expects to fall to no. 7 by 2016. At the same time, countries like India and Indonesia are climbing the rankings. “I believe their potential will exceed that of Thailand and China,” said He.
And his expectations for 2015 aren’t great, either. “Major shrimp producing countries are facing a grim situation, with high costs and high prices,” he explained. And problems in major markets are exacerbating production challenges. There are trade and technical barriers in the US market, economic downturn in Japan and the EU is an unstable economy, with an unpredictable political pattern and cancellation of GSP [Generalised Scheme of Preferences] treatment, said He.
Reacting to the situation, He believes the country should begin to focus more on the domestic market: “We are entering ‘the new normal’,” he said.
The growth of super intensive greenhouse production in many Chinese provinces will help China in this new effort, allowing off-season production of fresh shrimp. “This will hopefully begin to bring down prices and increase competition,” said He.
With China’s famous urbanization drive and the government’s “Belt & Road Initiative” – a scheme to financially incentivise investments abroad by Chinese tech companies – this ‘new normal’ looks likely to further turn Chinese aquaculture towards its own market.
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May 27 2015, 9.35am CST
'Messy' market for feed
“The market is messy at the moment,” said Guogi Xu, vice GM of feed producer Yuehai.
Despite being one of the earliest aquaculture feed producers in the industry with its beginnings back in 1993, and a strong brand, Xu tells IntraFish there is a lot of price pressure with many lower quality competitors with lower prices.
“Fishmeal prices are also too dear,” added his colleague – a factor which has led the company to invest RMB 3 million in research into new technologies and new ingredients in recent times.
But, despite a shrinking industry – disease and operating costs are challenges for the Chinese aquaculture industry right now – the same issues are leading producers to look for better quality feed, said Xu, echoing what we have heard from feed producers across the show floor this year.
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May 27 2015, 9.00am CST
50% YOY growth headache for feed giant
Everyone faces challenges. But feed giant Guangzhou Liyang Aquatech’s is probably a nicer challenge than most.
“Managing our rapid development is our greatest challenge,” Deputy GM Tao Jihong told IntraFish, when we sat down with him this morning.
And when he tells us the company’s growth has been 50 percent in volume terms year on year, you begin to understand why.
Liyung Aqua Tech started life as a drug company, but is now a listed company turning over RMB 120-140 million per year in sales of aquaculture feed and treatments, largely to the Chinese market, but with the beginnings of exports to SE Asia.
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May 26 2015, 10.20 pm CST
Makin' it happen
Turns out IntraFish doesn't just follow the news. Our gentle probing (or harassment, depending on your perspective) actively makes it happen…
Speaking to Jennifer Kuo, general manager of animal health and VP of corporate planning at Taiwanese feed giant Grobest this evening, we agreed IntraFish had exhausted all the company's news in the last few weeks and we should hold off and contact her at the beginning of Q4 for new developments.
Later in the evening we asked her where her travel was over the next few months to which she replied "Nowhere. I'll be too busy making something happen for when you call me in Q4!"
Result.
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May 26 2015, 4.00 pm CST
Pump it up
Disease problems in the Asian shrimp industry have not just opened up opportunities for rival producers, but for feed and equipment manufacturers too.
Jack Pan, vice president of Nanrong Group, told IntraFish his water aerators and oxygen pumps have been doing well in the wake of Early Mortality Syndrome (EMS).
"Farmers used to but one pump for every 10-20 mu [6,667-13,334 square meters], but now they buy one pump for every mu," he said.
Nanrong, which has a 60-70 percent market share in its key markets -- namely Indonesia, Malaysia, Thailand, the Philippines, Vietnam and India -- is also now making inroads in Brazil, Ecuador, Chile and Peru, explained Pan.
"In shrimp farming no-one is doing an excellent job," he said. "The main reason is the quality of the seed and the water quality."
Bad news for shrimp farmers. Good news for Nanrong.
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May 26 2015, 3.15 pm CST
Huge, but 'not strong'
It is time to 'upgrade' Chinese aquaculture, Cui He, exec VP and secretary general of the China Aquatic Products Processing and Marketing Alliance (CAPPMA), told IntraFish when we met with him at our booth.
"[The industry] is huge, but not strong," he said.
"It's a big challenge for a developing country," said He, but he is enrolling the help of the larger, more advanced producers -- such as Baiyang Aquatic -- to demonstrate their production systems and processes to the country's myriad of smaller producers.
CAPPMA has been working hard to raise standards in Chinese seafood production and has formed relationships with several big standards organizations to do so: the Marine Stewardship Council, the Aquaculture Stewardship Council and the Global Aquaculture Alliance to name a few.
He told IntraFish he hopes that one day Chinese organic certifications -- "Green Food" and "China Organic" -- can also be joined with international organic standards to raise their profile and help standardize the Chinese industry.
CAPPMA is also continuing its strong cooperation with US and European customers, with He excitedly referencing a project to farm Asian carps in the United States and export them back to China.
IntraFish hopes to catch up with the US company in question, Moon River, tomorrow at the expo… watch this space…
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May 26 2015, 2.37 pm CST
The magnificent 7!
RAS-based aquaculture could have a great future in China if more tech-focused companies like Great Seven Bio-Tech take shape.
Founded by some of China's biggest aquaculture brains – the 'great seven' referred to in its name – the company is focused on feed production and the culturing of seafood in RAS systems.
Already producing grouper and turbot on an experimental basis to better understand the farming and test the feed it produces for local farmers, three years ago it also took the unusual step of producing Murray cod – a high value fish until now only farmed in Australia.
Producing 100 metric tons in 2014, next year Great Seven expects to be matching the entire production of Australia at 500 metric tons.
But it's a tricky species, as one of the company founders and Technical Director Wei Chen explained to IntraFish when we spoke with him.
"It takes seven or eight years before it can breed and then the females only produce 10,000 eggs [5 percent of what a turbot, for example, would produce]," he said.
And it is a big fish, reaching 10 kilos by the time it matures.
Which lead me to wonder why you'd invest in farming it.
"Because it's delicious!" exclaimed Chen. "And because it gets high prices and is suitable for RAS," he continued, almost as an afterthought.
Indeed, Great Seven sells the fish for RMB 196 per kilo at the farm gate. This price will lower as production increases, but this is a fish very much in demand amongst Chinese consumers, according to Chen.
Great Seven already has another two farms and feed factory in the pipeline and going forward expects to be building similar facilities close to the big markets in Beijing, Shanghai and Guangzhou.
IntraFish's Fish Farming International Digital will carry a feature on Great Seven Bio-Tech in the coming week. Sign up now and make sure you get our newsletter in your inbox!
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May 26 2015, 11.40 am CST
Combating EMS
Dr Lu Jenn-Kan from Taiwan Ocean University had cameras flashing in his presentation on the use of complex beneficial micro-organisms in aquaculture.
Clearly striking close to the heart of the Chinese shrimp farming audience, Jenn-Kan spoke extensively about water quality and its possible role in the EMS disaster and how the use of probiotics and microbials can improve both this and many other elements of the production cycle.
He also made an interesting reference to China's approach to date as an aquaculture food producer as opposed to an aquaculture business producer, like neighboring Japan.
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May 26 2015, 10.20 am CST
What a pile of crab
Under the title of 'Russian aquaculture' representatives from the Far Eastern Crab Catchers Association (FECCA) and Sigma Marine Technology -- the Russian Far East's second largest crab catcher -- presented the opportunities for Chinese buyers in the Russian crab sector.
With eight member companies and accounting for half the crab quota of the Russian Far East (42,000 metric tons), FECCA catches nine species of crab across 10 fishing areas in the region, allowing almost year-round supply.
Producing both frozen and live product, Japan is its biggest market at 46 percent, followed by the United States at 33 percent and South Korea at 12 percent.
China is one of its smallest key markets at just 5 percent, although the presentation highlighted this figure was somewhat misleading due to the high volumes of crab being imported into Japan and Korea before being re-sold into China.
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May 26 2015, 9.30 am CST
Box clever
A recent incident of tons of fish sliding from the back of a truck in southern China and flooding the streets makes Promens' Helga Bjork Jonsdottir's point perfectly: If they had been in Promens tubs this never would have happened, she tells IntraFish. "I put that on my Facebook page," she said.
Because, while Promens has a good position in the fish processing industry in China, it is now trying to push back lower down the chain to the vessels and farms where the coldchain needs to be improved, according to Jonsdottir.
To this end, Promens has been working with fishing companies in northern China, the result of which has been a smaller 160 liter insulated tub which fits the holds and is easier to handle for workers.
"More manpower is used in Asia [as opposed to machines used in Europe], so the tubs needed to be manageable," she said.
A similar co-operation was made with some Vietnamese customers to produce a round insulated tub to better enable the stirring process in shrimp factories.
Promens has been working in the Chinese market for around 10 years and said it really has only one competitor in terms of rotomolded tubs. The company set up a factory in Taicang in mainland China in 2013, increasing its presence in the market alongside its Hong Kong sales office.
From here and its Indian office, it manages the Asia market where Vietnam, Indonesia, Japan, China and India are its leading buyers.
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May 25 2015, 5.50 pm CST
Silver linings
Chinese buyers -- even consumers -- are beginning to ask for Ecuadorian shrimp, according to Paul Penaherrera from ProEcuador's Guangzhou office.
And although he won't say it explicitly, Early Mortality Syndrome (EMS) in Asia has certainly helped them gain this foothold.
The government organization – which promotes all Ecuadorian produce in the country – saw the same when the 2013 typhoon hit the Philippines and Ecuadorian bananas were given the opportunity to prove themselves in the Chinese market.
And although the growth in shrimp exports to China from Ecuador are slowing slightly as Asia recovers -- this year's exports are expected to be around the same as last year at 17,000 metric tons and $141.9 million -- Penaherrera is of the opinion things can only get better.
"People want imported food – it's a safety thing – they don't trust domestic product," he told IntraFish.
Shrimp is now Ecuador's second biggest non-oil product exported to China at 25 percent, second only to bananas, explained Penaherrera.
Aside from shrimp, Ecuador has an established supply of butterfish to the Chinese market and its next big drive will be canned tuna, he said.
With Thai tuna the dominant can on Chinese retail shelves at the moment, Ecuador has some way to go to gain a market share, but maybe Thailand's slave ships will be Ecuadorian tuna's EMS….
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May 25 2015, 3.30 pm CST
Welcome to Xiamen
IntraFish has just arrived in Xiamen -- one of China's most famous seafood cities -- on a warm and distinctly wet Monday afternoon.
Looking forward to walking the floor at the first ever Aquaculture Asia Pacific show.
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