April 14, 2010

Malaysia's conglomerate to expand Asean seafood operations

Texchem Resources Bhd plans to set up a second seafood processing facility in the Asean region, in particularly Indonesia.

Indonesia was a potential location for the facility which required an initial investment of MYR15-20 million (US$4.68-6.24 million), chairman Tan Sri Fumihiko Konishi said.

Texchem operates a seafood processing facility in Myanmar under A.S.K. Andaman Ltd that sources about 60% of its seafood supply from Malaysia and the balance from Myanmar.

Tan said seafood supply from the west coast of Malaysia has dwindled due to overfishing and climatic change. At the same time, orders for processed food from China and South Korea were increasing on the back of improving economy, he added.

The company plans to set up the seafood processing facility in Indonesia within these two years. A second seafood manufacturing facility in the region would further reduce the dependency of the group's seafood supplies from Malaysia.

Besides Andaman, the group manufactures and trades through subsidiaries such as Texchem Food Sdn Bhd and Sea Master Trading Sdn Bhd, and Ocean Food Pioneer Sdn Bhd.

The group produced over 23,000 tonnes of processed seafood products last year.

The products, which include processed fish, squid, prawns and surimi, are still unable to enter the Europe, as it has yet to obtain clearance from the local authorities as well as from the EU.

So far, only six companies from Malaysia were able to export seafood products to Europe, which offers 5-10% higher selling price than China and South Korea.