July 20, 2011


Indonesia's shrimp processors may relocate on short local supplies



A number of Indonesian shrimp processing companies may consider relocating their factories to Thailand or China if the current shrimp supply shortage continues, an industry group said.


Indonesian Fisheries Product Processing and Marketing Association chairman Thomas Darmawan said on Friday (Jul 15) in Jakarta that local shrimp processing firms needed adequate shrimp supply in order to meet the growing demand from their overseas buyers.


"If the orders surge but the local suppliers cannot provide them with more shrimps, they may relocate their business to other countries to keep their businesses afloat," he told The Jakarta Post.


Darmawan said that several of the association's members were considering moving to China, which had adequate shrimp supply. Recently, China launched an integrated shrimp centre, South China International Trade Centre, in Zhan Jiang, Guangdong.


"It has already invited Indonesian firms to invest there and it provides rented land and plants," he said.


According to the association's data, the local shrimp processing companies are able to produce only about 150,000 tonnes of processed shrimp products a year, far lower than their production capacity of 565,000 tonnes, due to the lack of fresh shrimp supply.


According to Darmawan, between 2008 and 2010, around 16 firms saw their production decline, and three of those closed down last year. This year, another two large firms in Malang, East Java and Makasar, South Sulawesi, quit their operations due to the supply shortage.


The government has banned imports of several kinds of shrimp, including vannamei shrimp, to prevent introducing an overseas virus from infecting local shrimp cultures, and to protect local producers.


Under the recently issued Ministerial Regulation No. 15/2011, the government further tightened its effort to curb shrimp imports.


The Maritime Affairs and Fisheries Ministry's fisheries product management marketing director Victor PH Nikijuluw said that there had been a shrimp supply shortage since last year due to weather problems.


However, the government still had no plans to increase imports to compensate for the shortage, including vannamei, which was the key material for the domestic processing industry.


Nikijuluw said the government encouraged local processing firms to switch to other types of locally produced shrimp.

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