China vows squid dominance

Published on
December 31, 2015

China is vowing to expand its presence in world squid waters through an alliance of local firms and government agencies which will also seek to expand consumption of the species in domestic markets: that’s according to a report compiled by a group of 14 companies and research bodies set up in 2012 with a view to establishing an alliance of Chinese squid catchers and processors.

The document, seen by Seafoodsource, was prepared for a recent summit of squid firms in the Penglai city on the East China Sea, calls for an expanded Chinese squid fleet overseas and a marketing campaign in China to “reduce the prejudice” of consumers towards squid – a reference to public opinion which sees squid as a lower-end species. This can be achieved through the development of new products and medicinal goods from squid.

The alliance appears to be spearheaded by the Penglai Jinglu Fishery Co Ltd, one of China’s major state-run fishing companies, which has extensive operations in Latin America fishing squid and tuna. Jinglu in 2006 became part of the Shandong Huiyang Group which also oversees other branches like Penglai Huiyang Food Co and Penglai Jinglu Food Co. Other firms in the group focus on shipbuilding and logistics: a large delegation of Chinese squid firms were taken to visit the firm’s shipbuilding operations during the recent summit.

Squid is crucial to China’s seafood industry: the category which Chinese Customs terms ‘squid/cuttlefish/octopus’ accounted for 16.6 percent of overall exports – making it the top ranking export category in value and volume terms on 413,000 tons, worth USD 2.67 billion. Much of this product is originally landed in China by firms like Jinglu.

Other firms in the new alliance include Shandong Homey group, which has sought to diversify from aquaculture and processing into overseas fisheries. The alliance in its document pledges to “support government policy” of expanding China’s overseas fleet. Tests on nutrition and medicinal purposes of squid will meanwhile be carried out by academic members of the alliance, including the influential Shanghai Ocean University and the China Academy of Fishery Sciences.

Jinglu and the broader Huiyang Group enjoy a close financing relationship with one of China’s biggest financial groups, Minsheng Bank. Minsheng has been providing loans to fishing firms like Jinglu as they increasingly shift focus from processing to pelagic fishing – indeed Minsheng has a memorandum of understating with the Shandong Provincial Ocean and Fisheries Administration to support regional fishing firms. The bank has also signed memorandums to support the Chinese Fishing Gear and Fishing Machine Industry Association, a body which has an obvious interest in the upgrade in China’s long-distance fleet.

Few firms are as well-connected in the region than Huiyang/Jinglu which claims a string of government awards: it’s a National Demonstration Base of Agricultural Product Processing Industry as well as a ‘Model Test Area for National Export Aquatic Products’ and an Outstanding Leading Food Company of the National Food Industry.

Located in the key processing province of Shandong, Jinglu has been nominated a “model enterprise” by China’s agriculture ministry, which also oversees the fisheries sector. With 80,000 tons of processing capacity spread across 18 plants, the firm processes shrimp, squid, mackerel, salmon and cod but it open to other species: staff say the firm can produce 2,000 individual processed product types.

Clearly confident in increased Chinese consumption of seafood, the Jinglu Group is also behind the Qingdao Aquatic Trade and Logistic Center Project, a RMB10.17 billion, 400 hectare site vying to be the most important international aquatic trade center in northeast Asia. As well as an international seafood trade centre, the project will incorporate a dock, a seafood processing base as well as an ‘equipment centre’ for fishing trawlers.

The company exports to the EU and US but its top clients are Japanese retail chains, including Ito Yokado. Staff say the firm has also built a large nationwide Chinese clientele among fast food chains like Dico’s and retailers like Wumart, WalMart and convenience retailer Family Mart: it supplies frozen seafood like filets, tuna and mackerel (packaged) and other non-seafood products to these clients.

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