December 7, 2010

 

Malaysian seafood processors seek alternative markets

 

 

Leading Malaysian seafood processing companies are looking for alternative markets to penetrate with new products, after losing their market share in Europe during an almost one-year ban on Malaysian seafood by the EU.

 

Golden Fresh, for example, is now targeting new markets in the Middle-East, North Africa, Brazil, and Russia, while Texchem Resources Bhd (TRB) subsidiary Texchem Food is eyeing China and Japan.

 

Golden Fresh senior commercial manager Rosy Ng said that the company was currently developing business alliances with seafood companies in the Middle-East to tap the markets in the United Arab Emirates (UAE), Lebanon, and Kuwait.

 

"We are also following potential leads in North African countries such as Algeria, Tunisia, and Morocco, as well as exploring opportunities with Brazil and Russia," she said.

 

Last year, Brazil imported seafood products with an estimated value of US$285 million, while an estimated US$1.63 billion of seafood entered Russia.

 

The Malaysian authorities are now arranging for their Russian counterparts to visit Golden Fresh and a few other seafood companies in Malaysia soon, Ng said. The company has also recently established marketing offices in the UK and France to increase its market share in Europe.

 

Before Europe banned seafood exports from Malaysia in 2008, Europe contributed about 30% to the company's revenue.

 

"When the ban was lifted in 2009, the European market's contribution shrank to about 8%, as the majority of our customers sourced frozen seafood products from our competitors in Thailand, Vietnam, and Indonesia," Ng said.

 

From July 2009-July 2010, Golden Fresh's exports to Europe were around 300 tonnes, compared to 2,000 tonnes during an identical period before the ban in 2008.

 

After losing its market share in Europe, Golden Fresh has since focused on increasing exports to Australia, which now generates about 50% of the company's revenue, compared to 40% before the ban.

 

Golden Fresh is investing about MYR10 million (US$3.18 million) to raise its production of frozen seafood products to 12,000 tonnes in 2011, up from 9,000 this year.

 

TRB chairman Fumihiko Konishi said that Texchem Food planned to further tap into the markets in China and Japan with high-quality fishmeal products to be produced in the east coast of Malaysia and in Indonesia.

 

"We are planning to establish in 2011 a high-quality fishmeal processing plant in the east coast of the peninsula and two similar plants in Indonesia in 2012," she said.

 

The markets for high-quality fishmeal products are in China and Japan, Konishi said.

 

He said Texchem Food had also recently signed a memorandum of understanding with China National Chemical Fibre Corp (Sinofibre), a wholly owned subsidiary of China Hi-Tech Group Corp (China Hi-Tech), appointing Sinofibre the sole importer of Texchem Food's seafood products in China.

 

Konishi said the company planned to export 3,900 tonnes of seafood products, with an estimated value of MYR30 million (US$9.55 million), to China next year. He said the figure was expected to increase to about MYR50 million (US$15.9 million) in 2012.

 

In 2012, contribution from China to Texchem Food's revenue would reach about 35%, up from 25% in 2011.

 

China ranks as one of the world's largest importers of seafood products, buying over US$3 billion worth of seafood products from overseas annually, Konishi said.

 

Konishi said the European market was huge, as Texchem Food used to export some 4,000 tonnes of squid and cuttle fish products just to Italy alone before the ban on Malaysian seafood.

 

Last year, TRB outsourced its seafood-processing activities to Thailand and Vietnam following the EU ban on Malaysian seafood in June 2008, so that it could continue its seafood business with Europe.

 

Malaysian Frozen Food Processors' Association (MFFPA) secretary Saw Hai Earn said that shortage of raw materials was still major problem for seafood companies exporting to Europe.

 

At present, there are only 16 aquaculture farms, out of over 1,000 in the country, certified to supply the 18 local seafood companies exporting to Europe.

 

The alternative is to source the raw material from Indonesia, Thailand, or Vietnam, which is also a costly solution, as there are logistics and packaging costs, he said.