Friday, Nov. 6, 4.45 pm C.S.T.
Processor: Returns on China sales bigger than overseas
Yantai, China-based processor Ted Foods is shifting its focus further from international sales to the domestic market, and with good reason: Chinese sales margins are now higher than for exports, Thomas Sun, general manager at the firm, told IntraFish.
Five years ago, the company still had 80 percent of its sales taken up by exports, this has now dropped to 60 percent, he said.
"The aim is to have 60 percent domestic sales within the next three years," he said.
To cater to the growing demand, the squid processor is now considering the construction of a new plant, next door to its existing facility in Yantai.
The land has already been purchased and Sun said he is currently in the designing stages.
This move is also a way to cut hiking cost for labor, which have jumped to about $500 per month per employee -- a 15 percent jump year-on-year.
"Seafood is one of the most labor-intensive industries," he said. "All of us [in Yantai] are struggling under the high cost."
More automation and modern equipment will be key for survival, he said.
The climbing cost are especially hitting smaller plants, Sun told IntraFish. While he doesn't expect to see consolidation within the sector, he still expects to see fewer players in the mix in the coming years.
Ted Foods is one of the three biggest squid producers in China, processing about 22,000 metric tons per year.
This year, Sun expects to report a turnover of around $60 million from overseas sales, while the company could fetch about $40 million in the domestic market.
Nevertheless, the company doesn't want to lose its position in the international markets. "We will always have international sales, at least in the next 10 years.
"I want to grow the volume but we need to have a strong position and for that we need to be diversified in terms of sales [regions]," he said.
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Friday, Nov. 6, 1.27 pm C.S.T.
Troubled Qingdao Yilufa running at full capacity
Qingdao Yilufa Group, as many other Chinese processors, is facing a tough time, Ren Shuai, sales manager at the firm, said.
As many others, it has been hit by the difficult trading environment for Alaska pollock, and in addition it has been facing difficulties with banks, which are now seeing the seafood processing business as “high risk.”
Several competitors IntraFish talked to over the past three days, said the company is close to bankruptcy, but Shuai said it is operating at full capacity due to the high volumes of stock it bought last year.
“We are still processing at 100 percent,” she said. In total, the company processes around 25,000 metric tons a year, of which around 80 percent is Alaska pollock.
The company is now looking to invest in further automation and modern equipment at its two plants in a bid to cut labor cost.
Greater diversification into species such as cod and hake are also on the table, Shuai said.
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Friday, Nov. 6, 1.07 pm C.S.T.
‘Boom time’ for India
India’s aquaculture industry – driven by shrimp – is growing rapidly, with one trader describing the next few years as the country’s “boom time.”
Around 95 percent of this year’s enquiries at this year’s China show were for vannamei, Salim Iqbal, managing director at Seven Seas Seafoods, told IntraFish.
The Chennai-based firm is currently selling 500+ containers per year, but is “dreaming” to double that within the next few years, on the back of the country’s massive aquaculture expansion.
“We’re expanding our company due to vannamei,” Iqbal said. Its currently biggest markets are Japan, Europe, Russia, Vietnam and China.
In contrast to other Asian countries, India has the capacity to supply and in the course it will develop its image as a world-class supplier, he said.
When asked about recent issues with exports to Europe, with several containers being rejected for excess use of antibiotics, he simply said; “when it’s boom time it’s rumor time.”
India’s shrimp farmers would be well aware of the disease issues seen in other Asian countries, especially Thailand, and “are learning from these mistakes. We won’t fall into the disease trap.”
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Friday, Nov. 6, 12.45 pm C.S.T.
Seawork launches Chinese subsidiary
Namibia-headquartered group Seawork recently set up a subsidiary in China, Seawork Shanghai, to tackle the country as a potential end market, Eino Brand, managing director of Inlet Seafish -- the group's Spanish subsidiary -- told IntraFish.
The new company, which is 100-percent foreign share owned, this week sent its first trial container with King crab to Shanghai.
Brand said the firm decided to import directly to Shanghai, and won't be going through Hai Phoung in northern Vietnam, to save on Chinese VAT.
While this means more work in terms of labeling, quality control and organization, he said, Seawork wanted to do it the legal way.
"It's not an easy exercise," he said.
The group, which last year reported sales of 37,000 metric tons, hitting a turnover of $190 million, has been present with Inlet in China for eight years for purchasing purposes, and L&B Taspac for more than 15 years for sales.
These businesses will be merged next year, Brand said.
"I have no idea how big China can grow [for Seawork] but there is big potential," he said, adding the company is still at its beginnings.
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Friday, Nov. 6, 12.15 pm C.S.T.
Chinese processor: Consolidation, closures looming from high pollock prices
The scale and volume Chinese processors can offer to the global Alaska pollock business "is not easily replaced," Hou Qiao Qiao, sales and marketing director at Qingdao-based processor New Continent Foods (NCF), told IntraFish.
She is urging suppliers in both Russia and the United States, as well as European buyers, to finally recognize the importance of Chinese processors in the international Alaska pollock trade.
Her comments come amid reports of squeezed Chinese processors due to high Alaska pollock prices and razor-thin margins in end markets in Europe, especially Germany.
"I wish Russians could see how important Chinese processors are, they should see us as partners in the equation," she told IntraFish.
Click here to read the full story.
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Thursday, Nov. 6, 7.30 pm C.S.T.
MPEDA: India shrimp output could reach 400,000 tons
India’s shrimp farmers may produce 400,000 metric tons of vannamei shrimp in the full year of 2014, N Ramesh, director marketing at The Marine Products Export Development Authority (MPEDA) told IntraFish.
The country has been ramping up its production over the last four years, diversifying from traditional Black Tiger farming.
Several other species are also being introduced, he said.
Tilapia is particularly interesting. While production is still in its initial stages, Ramesh said “it will be one of our biggest species” in the future.
Projects to farm mud crab are also underway.
Markets such as China will gain importance on the back of the India’s aquaculture development.
In the first half of this financial year, from April to September, total seafood exports to China dipped slightly to $80 million; however, “we’re feeling it’s going to pick up.”
Shrimp, squid and cuttlefish are particularly interesting for the Chinese market.
In financial year of 2013, India’s seafood exports to China amounted to $250 million, Ramesh said.
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Thursday, Nov. 5, 5.55 pm C.S.T.
Maruha Nichiro targets bigger market stake in China
Maruha Nichiro's booth boasted around 70 employees at this year's show, pursuing one common goal: Increasing the company's sales share in the Chinese domestic market.
Japan's drop in population is impacting the firm's seafood sales, Masamichi Kawano, president of Dutch subsidiary TESS, told IntraFish.
"Maruha has no choice but to look abroad," he said.
The United States, Canada, the European Union, China and southeast Asia are on the target list, he said.
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Thursday, Nov. 5, 5.45 pm C.S.T.
Seafood Connection, TESS to merge operations
Japanese conglomerate Maruha Nichiro is planning to merge the operations of Dutch subsidiaries Trans-Europe Seafood Sales (TESS) and Seafood Connection, in which it acquired a controlling stake last year.
Both companies currently work independently from each other, with Seafood Connection focusing on retail and foodservice customers, while TESS is servicing processing clients.
In the future, however, the companies will be operated under one single umbrella, Masamichi Kawano, president of TESS, told IntraFish.
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Thursday, Nov. 5, 5.30 pm C.S.T.
China seafood show just growing, and growing and growing
IntraFish caught up with China Seafood & Fisheries Expo organizer Peter Redmayne this afternoon to get a grasp of the magnitude of this year's show, and one thing is clear: It's been growing year-on-year, both in terms of exhibitors (see first blog post) and visitors.
"It's just super," Redmayne said. "We experience growth every year -- but this year is just exceptional."
While the final numbers are still out, overseas pre-registration was up 40 percent, he said. "I think total visitor numbers are up at least 20 percent."
He described the feedback from exhibitors as "phenomenal. A tradeshow like this facilitates market development. This show is not only about maintaining relationships with existing customers but it's about developing new markets and customers."
Next year, the exhibition will move to a new venue in northern Qingdao, Redmayne said, which is poised to become the definite base for the show.
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Thursday, Nov. 5, 5.02 pm, C.S.T.
The Picard of China
Chinese trading firm Ocean Treasure -- which was set up by two former East China Seas employees seven years ago -- is diversifying its business from exports to imports.
This year, the company opened its first premium frozen seafood shop in Nantong Jiangsu, where the company is headquartered, Oliver Nikolovski, general manager at Ocean Treasure, told IntraFish.
It is already in the planning stages for the second shop, he said.
"The demand for imported seafood is growing fast," he said. "We want to offer a different perspective and are selling only products without glazing or treatment."
Ocean Treasure is targeting "small cities" with their shops -- Nantong Jiangsu has a population of "only" seven million people -- and is planning more franchises in similarly sized cities.
Nikolovski, originally from France, described the new concept as the becoming the "Picard of China." All shops will have a "French touch" in terms of the quality of the products, the design and marketing materials.
"It has nothing to do with the Chinese shops you know," he said. "We want to do it right and invest well."
Since its beginnings, the company has developed to become one of China's biggest traders, and is expecting to sell around 800 containers overseas by the end of this year. The products, which include pangasius, mahi-mahi and swordfish, are mainly sourced from China, Vietnam, Taiwan, and India, and sold to the European Union and the United States.
Its imports business is still comparatively small: So far this year, it brought around 50 containers into the country, and Nikolovski is hoping this number will rise to 70 by the end of the year.
"It's still small but it's a start," he said.
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Thursday, Nov. 5, 1.10 pm C.S.T.
Chinese tilapia farmers on ASC drive
The Aquaculture Stewardship Council (ASC) is expecting that the first Chinese tilapia farms will be certified under the sustainable standard within the coming six months, something John White, development director at ASC, is calling a huge achievement.
Interest in the certification is growing, he told IntraFish, both on an institutional and industry level.
"They know that a label of sustainability is necessary in many export markets," he said.
ASC started its work in China two years ago, under a EU-funded project, and in cooperation with the CAPPMA and WWF China, White said.
"This was our main entry point to this massive market; to inform farmers about the potential of ASC and sustainability labels," he said.
The two-year project -- and the EU funding -- has since concluded but the ASC is eager to continue working in the country.
"We've been talking about a strategy and we will need to find resources," White said. In addition, the ASC is hoping to have its own representative in China soon.
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Thursday, Nov. 5, 1.05 pm C.S.T.
Veteran seafood exec Goycoolea to leave Blumar
Blumar's long-time sales and marketing director Eduardo Goycoolea is planning to step down from his role in March 2015, opening a new and quieter chapter in his seafood career.
"I think I've finished a cycle and want to move on," he said, talking to IntraFish at the China show in Qingdao.
He is planning to remain in seafood, however, in somewhat quieter roles, for instance to sit on boards of companies or work as a consultant for the ongoing Chilean salmon industry consolidation.
Click here to read the full story.
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Thursday, Nov. 5, 12.49 pm C.S.T.
Siam Canadian to report bumper 2014
Despite the ongoing Asian shrimp crisis, Bangkok-headquartered Siam Canadian is expecting to report its "biggest year in dollar terms," Jim Gulkin, the firm's managing director, said.
The group is expecting to report a turnover of more than $300 million for the full year, he said.
Geographical diversification and the ability to shift sourcing quickly is key to the growth, Gulkin told IntraFish.
Shrimp now accounts for about 70 percent of the company's sales, compared to 90 percent from some years ago.
"But shrimp is still our main business," he said.
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Thursday, Nov. 5, 12.31 pm C.S.T.
Thai shrimp production to reach 220,000 tons by year end as prices stay high
Thai shrimp farmers are set to produce around 220,000 metric tons of vannamei by the end of the year, Jim Gulkin, managing director of Siam Canadian Group, told IntraFish during a pit stop at the firm's booth.
For 2015, he said, production is expected to reach 300,000 metric tons, "if we're lucky," he said.
Prices for raw material stayed relatively high, albeit dropping from previous year levels.
He quoted raw material prices of THB 198 60 pieces per pound, delivered United States, THB 192 for 70 pc./lbs, THB 182 for 80 pc./lbs, THB 165 for 90 pc./lbs, and THB 155 for 100 pc./lbs.
This price trend goes against the rest of Asia, he said. "We've been seeing weak prices and a quietened down market over the past month, which is a sign of adequate inventory in the United States."
Buyers have been holding off purchases for next year, waiting for prices to move down, but some bids of retailers are floating around.
Prices in India and Vietnam are down, and also Indonesia's prices are starting to drop, he said.
Despite the still major supply shortages it is "generally a weak and unsettled market," he said.
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Thursday, Nov. 5, 11.48 am C.S.T.
Chang International looking for wild sea cucumber partnerships
Seattle-based processor Chang International is looking to boost its supply of wild sea cucumber into the Chinese market, Jerry Chang, president at the firm, told IntraFish.
"China's sea cucumber market is worth about CNY 10 billion, or around $1.6 to $1.8 billion, but most of it is farm-raised. We offer wild Alaskan sea cucumbers and we're looking to expand this," he said.
He describes wild as a unique selling point. "We are looking for the resource, for a partnership for joint marketing into China," he said. "We have the brand, the processing facilities and the packaging."
In addition, the company is still focusing on its online strategy, as well as on building its branded business in China with its Ocean Gala and Ocean Elegance brands, Chang said.
"Seafood brands in China are beginning to grow," he said. "We believe this could be a great opportunity for us."
Chang, who was born in Zhoushan, China, started his seafood business in 1994, in Seattle Wash., while studying at the University of Washington's school of fisheries, and has grown it into a large importer and exporter of seafood.
Ron Stecker is leading the operations in the United States, while Wang Stone is the general manager for the company's plants. Ye Hong is the general manager at the firm's Chinese sales company, which now employs 100 people.
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Thursday, Nov. 5, 9.17 am C.S.T.
Irish seafood exports to China jump 34% year-on-year
Ireland has again a strong presence at this year's China show: 12 companies are in Qingdao to promote their products to key buyers.
The trade mission is led by Simon Coveney, minister for agriculture, food and the marine, Bord Iascaigh Mhara (BIM), the Irish Sea Fisheries Board, said in a statement.
Irish Seafood exports to China (including Hong Kong) increased 34 percent year-on-year to August 2014, making the country and increasingly important market for Irish seafood.
In 2013, China’s total seafood imports reached €6.8 billion, an increase of nearly 10 percent on the previous year. "With consumption of seafood currently recorded at 33 kilos per capita, there is huge potential for the Irish seafood sector in this market," BIM said.
This year's focus is on boarfish, a high quota species with a total allowable catch for 2014 of 127,509 metric tons, which is for the first time marketed for human consumption.
To enable effective processing of boarfish, BIM has invested more than €600,000 in the development of bespoke processing technology to allow the production of headed and gutted and minced product formats.
This new technology will produce product formats that will demand a higher value on the Chinese market, it said.
BIM’s Seafood Development Centre has also developed a range of recipes specifically targeting Chinese consumer tastes including Homemade Boarfish Dumplings and Boarfish and lettuce soup, which it will be presenting to key Chinese partners at the China Seafood Expo.
In addition to researching new opportunities, BIM has also worked closely with industry to build scale and develop joint ventures that will best capitalize on this growing but large market in order to compete effectively, it said.
In comparison to traditional markets for Irish seafood such as Germany and France, China can be a difficult market to penetrate due its size leading to difficulty in accessing suppliers which leads to a lack of feedback on products and little direction on pricing. Forming collectives allows Irish seafood companies to share resources to build a greater presence on the market and make an impact.
There are three Irish collective groups currently operating in China with further assistance in terms of on the ground market support from Bord Bia. The companies are developing strong brands and export a range of crab, shrimp, razor clams as well as smoked salmon and pelagic fish.
Since forming in 2012, the collectives have experienced an increase in export sales worth over €6 million, BIM said.
The three collectives are Ocean Jade (Sofrimar, Shellfish de la Mer, Carrs and McBride Fishing Ltd.); Atlantic Gold (Rockabill Shellfish and Atlanfish) and Errigal/CKI (a merger between Errigal Seafood and Kilmore Fish Company).
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Wednesday, Nov. 5, 5.00 pm C.S.T.
Ocean One ploughs $7 million into new processing factory
Chinese processor Ocean One Enterprise is investing $7 million into a new processing factory in Hunchun, close to the North Korean and Russian borders, Frank Zhou, president at the company, told IntraFish.
The new factory will be processing wild salmon, cod and squid for the US and European markets, he said.
It will add to the company's two plants in Qingdao, where it processes chum and pink salmon, and in Yantai, where it processes yellowfin sole, rock sole and flounder.
The location was chosen due to its closeness to Vladivostok (280 kilometers distance), which will allow the firm to cut cost on raw material sourcing, as well as lower labor cost, he said.
In total, the company will employ 300 people and ramp up its processing capacity to 6,000 metric tons once the facility is up and running in May next year.
The move is supported by both the Hunchun local government and banks in the area, Zhou said.
Due to the recent issues in Qingdao, with several processors having issues to sustain the high cost in the pollock business, local banks there are increasingly seeing seafood as "too risky."
Ocean One itself was hit by the higher prices for chum and pink salmon this year -- which shot up $1,000 per metric ton year-on-year. Retail clients had decreased their purchases by 30 percent compared to 2013, Zhou said.
"But we're okay. We've tried to avoid commodity items such as pollock and have a bit more margins," he told IntraFish.
The company's biggest customers are Walmart and Aldi in the United States, as well as Aldi and Rewe in Europe.
He predicts that "next year is going to be a big year for salmon."
Zhou expects prices to go down in the new season, but is seeing stable to high prices until then.
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Wednesday, Nov. 5, 2.54 pm C.S.T.
Marine Harvest: Asia is for salmon innovation
Asia will continue to grow in importance for Norwegian salmon farmer Marine Harvest -- but the strategy is far from the commoditized business model seen in Europe or the United States, Charlie Wu, managing director Asia Pacific, told IntraFish.
"In Europe and the United States, as relatively mature markets, they focus on salmon as a commodity. This means it's a very price-sensitive market and loses the opportunity to innovate and brand," he said.
"But we still see that opportunity in Asia -- to brand salmon and to not only treat the product as a raw material," he said.
The company, which recently opened its second Supreme Salmon store in Taipei, is currently selling around 40,000 metric tons of salmon throughout Asia -- but expects to grow this 20 percent year-on-year.
So far, it operates six processing plants across Asia: Three in Japan, one in Korea, one in Vietnam and one in Taiwan.
While it currently has no plans to add further plants to the portfolio, Marine Harvest aims to increase its focus on adding more value to the salmon, especially to do more cutting, Wu said, as labor costs also increase for retailers and foodservice clients.
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Wednesday, Nov. 5, 2.32 pm C.S.T.
China equals growth, Part 2
Dutch producer Queens was the main driver behind the Netherland's decision to have a national pavilion at this year's China show.
"China has a 10 times bigger seafood consumption than Holland, but a 100 times bigger population than Holland," Harry Hoogendoorn, managing director at the firm, calculated for IntraFish.
"This means consumption is 1,000 times bigger than in Holland. Imagine that!," he said.
While the company opened an office in Qingdao 10 years ago, it is now trying to grow its presence at the country's retailers once again, focusing on pangasius.
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Wednesday, Nov. 5, 2.29 pm C.S.T.
Coldwater shrimp market adjusts to Russia ban
Species and markets diversification was key in handling the Russian seafood imports, implemented in August this year, Martin Sullivan, chief executive director at OCI, said.
Russia was one of the biggest markets for the group's coldwater shrimp but despite the sudden stop the turmoil, predicted in the first few days after the announcement, didn't happen.
"It was more of a re-balancing of the market," Sullivan said. "Greenland is now a big supplier to Russia. They've gotten bigger in Russia, we've gotten bigger elsewhere," he said.
In the wake of the ban, the company increased its coldwater shrimp sales in eastern Europe, Japan as well as China. "The market adjusted," Sullivan told IntraFish.
In terms of the global outlook of the coldwater shrimp market, he predicts the product will become a more valuable item.
Canada's main total allowable catch (TAC) advice is set in March next year but "most people are expecting a cut," he said.
Together with Greenland's looming 25 percent cut of its coldwater shrimp quota this means the overall supply situation is down -- and prices will inevitably rise.
Also here, product diversification to mitigate risks will be key.
"This helps to sustain the business," Sullivan said.
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Wednesday, Nov. 5 , 2.17 pm C.S.T.
OCI: China equals growth
Canadian seafood supplier Ocean Choice International (OCI) is growing 15-20 percent every year in China and the country holds a big promise for further growth, Martin Sullivan, chief executive director at the group, told IntraFish.
China is the market where it sells the biggest number of species -- 10 or 11 in total, he said. At this year's show, the group is especially promoting its yellow-tail flounder, presented in a new gift box, which is set to launch at a Beijing retailer soon.
The biggest species for OCI are still frozen head-on shrimp and halibut in terms of value, however, other species such as sea cucumber are growing.
OCI is also preparing to look into the booming e-commerce business in the country and to build up new business opportunities there, Sullivan said.
"We'll be pushing this harder in the next one to two years, but we have to be structured right," he said.
That the growth will continue is "out of question," he said. "We see a big opportunity. Most of our species are desired."
In total, the country accounts for 10-15 percents of its total sales, which is up from "just a few percent five years ago."
Canada takes 10 percent of total shares, the United States accounts for 20 percent, the European Union for 20 percent, and the rest goes into other countries in Asia.
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Wednesday, Nov. 5, 11.45 am C.S.T.
Dutch seafood group continues acquisition trail
The Netherlands-based herring processor Haasnot-Vis just closed the deal to acquire a 70-percent stake in Dutch importer Polaris -- its fourth acquisition within only one year.
Polaris offers about 1,200 fresh, frozen and convenience Polaris-branded and other products to about 700-800 Dutch and Belgian retail and foodservice clients, Martin Haasnoot, general manager at Haasnoot-Vis, told IntraFish.
While it is a completely new route for the company, it believes the synergy effects of the deal -- which was closed two weeks ago -- will be massive.
"We currently sell our matjes to about 150 shops but now we can push it to Polaris' customers," Haasnoot said.
Diversification into different product areas will also mitigate risks of being solely a herring supplier, even though business is not bad, Haasnoot said.
"We've been growing in herring in Germany and France, but also in Poland, especially with fresh herring," he said.
The family-run company is planning to continue to acquire small-sized businesses in the Netherlands, he said, and to grow its group that way.
"The market is constantly moving. We eat because we don't want to be eaten," he said.
Haasnot-Vis is currently also in the works of setting up a strategy of how to present itself as a group.
The company recently acquired transportation company Fresgo.
Last year, it acquired processor Vergro Fish, based in Almelo, the Netherlands. With the acquisition, a second company comes with it, as Vergro acquired herring processor Neptunus at the same time.
For the full year of 2014, the combined group is now targeting a turnover of €50 million. The Polaris deal was closed two weeks ago.
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Wednesday, Nov. 5, 10.40 am C.S.T.
Heiploeg pushing North Sea shrimp into China
For Parlevliet & Van der Plas (P&P) it's all about Heiploeg at this year's China show.
The fishing group, which acquired the Dutch shrimp processor in January this year, is planning to push cooked, shell-on North Sea shrimp into China -- a first for the company, Oskar Sigmundsson, managing director at P&P sister German Seafrozen Fish, told IntraFish.
"We still at the very beginning. But we're talking to clients, present the products -- it's a very interesting project," he said.
Imports, he said, have a great reputation in China -- in addition the company is banking on the "clean and pristine" image of northern waters.
"China is going to be more and more interesting as a market," Sigmundsson said.
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Wednesday, Nov. 5, 7.40 am C.S.T.
China Seafood and Fisheries Expo returns to Qingdao
After two years in Dalian, Asia's largest seafood trade exhibition returns to Qingdao for its 19th edition.
Over the past six years, the China Fisheries & Seafood Expo has more than doubled in size to become one of the second largest seafood trade fairs in the world.
More than 1,200 companies will exhibit at this years show, which is taking place at the Qingdao International Convention Center.
This year's edition, running over the next three days, is boasting a record-breaking 20 national pavilions.
New in the mix is the Netherlands, in addition to Argentina, Ecuador, Ireland, Papua New Guinea, Canada, Iceland, Japan, New Zealand, Peru, Chile, India, Korea, Norway, the United Kingdom, Denmark, Indonesia, Morocco, Pakistan and the United States.
IntraFish will make sure to bring you all the news from the showfloor. See you at the show!
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