China a major opportunity for Irish seafood sector

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The Irish Sea Fisheries Board is encouraging companies here to achieve greater scale in order to capitalise on the opportunities presented by emerging markets such as China.



25 March 2013

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Sales in the export market for Irish seafood have grown by 18% to reach a value of €493 million in 2012 compared to 2011.
Bord Iascaigh Mhara (BIM), the Irish Sea Fisheries Board, stated at its industry summit last week that, with declining demand and prices in traditional markets such as the UK, Germany, Spain, and France due to the economic downturn, opportunity is knocking in emerging markets such as China where a growing middle class is driving increased seafood consumption.

The summit entitled ‘Irish Seafood – Becoming a Global Seafood Player’ was aimed at key seafood industry players and the investment community. Key speakers at the event held at the Irish Management Institute (IMI) in Dublin, included Gorjan Nikolik, Food and Agribusiness researcher with Rabobank; Gary Hooper, CEO, Aquaculture New Zealand and Christophe Pelletier, Food Futurist.

Gorjan Nikolik, Food and Agribusiness Researcher with Rabobank International explained how Ireland’s seafood sector offers opportunities for investors; "Ireland has significant unused potential. With major production resources available, there is an opportunity to become a global player in the aquaculture industry. Economies of scale can be achieved very quickly in this business, even without a large domestic market in place."

He said funding for the industry is also available from outside of Ireland, with venture capital attracted to innovative sectors outside of the high tech industry since the dotcom collapse of a number of years ago. Other potential investors include the aquaculture sector and the meat industry. "I think that as aquaculture grows and matures it will become more and more similar to the farming of poultry and pork and this will motivate investments from the large meat companies. We can foresee that the investment potential arising from Chinese companies looking to secure supply for their domestic markets is another major opportunity. Seafood will be in demand long after meat demand is satisfied in China."

Gary Hooper, CEO, Aquaculture New Zealand provided an interesting perspective into how New Zealand has developed its aquaculture industry to become a significant, sustainable sector, employing more than 3,000 people and generating over $400 million in revenue per annum.

Outlining key trends and changes that will occur at a global level, Food futurist Christophe Pelletier pointed out that even a very small share of the Chinese market would offer a significant boost to the Irish industry. "If every Chinese person was to eat 100 grams of Irish seafood just once a year that would equal 150,000 tons a year", he noted. "And in the coming years, seafood consumption per capita per year in China is expected to rise from 26 kg today to 36 kg in 2020. Just a 1% share of that market would be greater than 500,000 tons a year."

Jason Whooley, BIM CEO highlighted the need to scale the sector in order to take advantage of the opportunity that exists in emerging markets; "Appropriate scale will enable a company or a group of companies working collaboratively to invest in marketing, research and skills, all of which provide access to new markets and improve company performance. In turn, this will result in the sector delivering much needed jobs and exports. BIM’s goal is to assist with the development of one or two entities with a turnover in excess of €50 million in each of the key seafood categories – shellfish, pelagic, salmon and whitefish. These entities will in turn be supported by a range of innovative, smaller seafood companies."

Greater collaboration within the sector and the establishment of appropriate joint venture operations and partnerships will play a key role in the achievement of this goal. BIM’s Collective Route to Market Scheme, which was launched in January 2013, is aimed at promoting such collaboration by offering seafood companies grant-aid assistance and expert advice to work collectively to reduce duplication costs, boost profitability and increase competitiveness on export markets.

The scheme will deliver €400,000 in funding the industry and it is anticipated that between four and six Seafood Collectives will apply for financial and business development support under it.



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