Last week, Thai Union Frozen Products (TUF) made headlines with the announcement that it was setting up a joint venture with Savola Foods Company, marking a groundbreaking foray by TUF, and perhaps the global seafood industry in general, into the Middle East.
If TUF is looking to penetrate Middle Eastern retail markets, it chose the right partner. Based in Jeddah, Saudi Arabia, Savola, in addition to producing a number of non-seafood-related food products, owns Azizia Panda, the largest retail grocery chain in the Middle East.
“The Middle East region is one of the fastest growing seafood markets globally,” TUF CEO Thirapong Chansiri said in a statement announcing the joint venture. “It is a well-established seafood culture with increasing per capita consumption. We are very excited about this opportunity.”
Chansiri’s comments indicate a strong belief in the potential of that region, and while the seafood industries in both the Middle East and Africa are often overshadowed by those of the larger international community, ongoing activity both from producers and consumers of seafood in these regions may yet prove Chansiri’s faith is well-placed.
Many advocates have maintained that seafood farming there is growing. At the Global Aquaculture Alliance’s GOAL 2013 conference in Paris, a number of presenters, including consultant Izzat Feidi, painted a picture of the two regions as ripe for aquaculture investment. In a 2015 report, “Review of developments in Arab aquaculture: Prospects for aquaculture expansion in the Arab countries,” published in the Arab-language INFOSAMAK International magazine, Feidi discussed the ongoing aquaculture projects – and new projects – in 22 Arab countries in the Near East and Northern Africa regions.
“Almost all are expanding existing projects and also initiating new ones and some are already producing farmed fish and shrimp and some bivalves production,” Feidi wrote.
Egypt is by far the biggest producer, with 1.1 million metric tons (MT) in 2013 alone. The Egyptian government, like those of the other countries Feidi surveyed, is actively seeking out foreign investment in its programs, recently signing two agreements with the Italian government to develop best practices in Egypt’s aquaculture sector.
There is room for caution, though: While Saudi Arabia, the No. 2 producer in the region, also has a tradition of being an aquaculture innovator, it lags far behind its African neighbor, only producing 25,390 MT in 2013. No other country Feidi studied in either the Middle East or Africa is producing at even Saudi Arabia’s level yet, and critics have pointed out a number of factors – including political unrest and violence and a lack of modern infrastructure in key areas – serve as persistent roadblocks to expansion.
Despite these obstacles, Feidi’s report makes it clear that the seafood farming industry there is on the move; Egypt and Saudi Arabia both have ambitious plans to develop their aquaculture offerings, and countries such as Iraq, Tunisia, Syria, Algeria, Morocco and Oman, while low-volume producers now, all have development plans in place to improve those figures.
And Chansiri is not alone in his optimism about retail seafood outlets. Gorjan Nikolik, associate director of animal protein at Rabobank International, agreed “there is indeed great potential” for TUF and similar companies looking to break into the African and Middle Eastern markets.
“The Middle East is a region with one of the youngest and fastest growing populations in the world,” Nikolik said. “Also it has the level of income per capita where a large part of the population could be a consumer of canned tuna products. Increasing urbanization and growing modern retail are dynamics that improve the likelihood of (a) large canned seafood maker developing.”
TUF’s move also signals a shift in focus to new markets for the company. Traditionally, the United States and EU are the Thai seafood industry’s biggest destinations, and Nikolik said TUF’s diversification is a wise move. Given the popularity of the Middle East for many years now as a prime target for exports such as poultry, dairy and sugar, Nikolik said TUF’s shooting for the same success with seafood makes sense.
“It is only logical that the seafood industry would also target these markets,” he said. “Tuna and other canned seafood is probably the most likely product to achieve strong penetration in this region but we have also seen increasing consumption of salmon, shrimp, tilapia and seabass / seabream.”
Seafood restaurant chains have potential too, as evidenced by Ocean Basket, the South Africa-based chain that has over 20 years expanded and plans to expand into 15 countries in Africa and the Middle East. The chain also owns locations in Cyprus, and even has plans to open in Sweden.
Both Africa and the Middle East, as producers and consumers, hold enormous potential for the seafood industry, and sooner or later something will happen to make those sectors much bigger players in the world markets than they are now. No one expects such a thing to happen overnight, and arguably TUF’s foray into the region will do little to boost aquaculture operations or seafood restaurant chains.
Nevertheless, the investment of a major global company like TUF can only accelerate the rate at which these markets begin drawing the eyes – and cash – of established seafood industry leaders elsewhere in the world.
