March 1, 2006

Norway finding ways to raise seafood profitability

THE Norwegian Institute of Fisheries and Aquaculture Research has been tasked to investigate opportunities in the global market for Norwegian and ways to increase profitability, according to Oddrun Bjorklund, a scientist at the institute.

The institute is also embarking on branding efforts and projects to process fresh raw materials in order to claw back its eroded market share.

Despite technological advances and increased production of farmed fish, the Norwegian industry is slowly being priced out of major markets like the EU. The once flourishing Norwegian shrimp industry has fallen on hard times, for example.

Since Norway is a high-cost country compared to other developing countries like China and Vietnam who supply the EU, it can ill-afford a price war.

The industry has walked into a "commodity trap", a situation where there is overproduction of the same item, leaving manufacturers no choice but to cut prices, said Bjorklund.

Increasingly, Norwegian manufacturers are concentrating on high-quality fresh products. Bjorklund believes that is the way to stay ahead since it would be difficult to compete with low-cost countries. An equally critical component is branding with an eye on quality, she added.

Bjorlund pointed out that there is a need to make products that cannot be copied easily. Processing of fresh raw materials is one such way to set Norwegian products apart from those being produced in low-cost countries.

Fresh raw materials cannot be flown across the globe for processing, and this is a competitive advantage for Norway, says Bjorklund.