May 5, 2006

 

Small-scale fishmeal factory finds its niche through diversification
            

An eFeedLink Exclusive

 

 

In aquaculture, as in agriculture, size matters. Besides cost efficiencies and bargaining power, large-scale processors also enjoy a more stable supply of raw materials from its numerous suppliers.

 

So, what can small-scale processing factories do?

 

One way is to diversify its products. Being first and foremost a fishmeal facility, Pt Pulau Mas Moro Mula, a small-scale facility in the Indonesian island of Moro, also processes shrimps, makes surime and sells unprocessed fish for human consumption.

 

Despite these efforts, the facility still faces the twin predicaments plaguing fisheries from North America to Europe--dwindling fish stocks and rising fuel costs.

 

The fishmeal factory produces 200-300 tonnes of fishmeal a month. Ninety percent of its production is sent to Jakarta and Medan while 10 percent is exported.

 

Raw materials for the fishmeal come from chunks of tuna by-products from processing factories in Singapore and other local seafood by-products. Raw materials undergo a drying process which takes them through 3 cycles in drying machines. If the fishmeal is deemed not dry enough by quality control, it undergoes the process again before they go through a hammermill and are finally packed into 50 kg bags.  

 

Fishmeal from the factory contains less than 10 percent moisture, 56-57 percent protein and is sold at about S$980 (US$669.6) depending on international prices.

 

To offset costs, owner Halim Chia, branches out into other products to sustain profits.

 

Next to fishmeal, shrimp processing is the next most profitable aspect of his business.

 

Chia, a former fishermen, set up the facility with Singaporean partners 8 years ago.

 

Inside a facility half the size of a football field, dozens of workers shell the shrimps before it was washed by ozone water (water treated by sunlight) to get rid of bacteria. Shrimps are packed into a tray, weighed and wrapped in polyethylene bags before being refrigerated. The shrimps are sold in the form of two-kg blocks enclosed by ice.

 

The blocks of frozen shrimps are sent to Singapore where it is re-exported to destinations such as South Korea.

 

The shrimp shells and heads are also ground to form carotene meal so that nothing is wasted.  

 

With production of just two to three tonnes a day, middlemen are required to bring the produce to market.

 

Still, using shrimps from the wild instead of farming eliminates the costs of providing feed and lowers the risks of diseases.

 

At the same time, however, it also means that production is left at the mercy of an unpredictable harvest throughout the year. When volumes decline, the factory can be operating at a fraction of its capacity, Chia said.

 

The small scale of operation also means that nothing is wasted, fishbones and fishhead from its surime operation are used as raw materials for its fishmeal operations next door. 

 

Although higher oil prices did not impact the factory directly, fishermen are demanding higher prices for their catch to offset costs. As a result, the facility has had to pay more for its raw materials.

 

While demand for various products, especially fishmeal, is enough to keep the business afloat, there is little room for expansion due to the increasingly limited ocean catch. Furthermore, the small scale of the facility also prevents it from negotiating with the major retail centres directly due to the smaller volume it produces.

 

 

 

 

 

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