The collapse of China’s real estate sector has caused investors to look elsewhere for returns, and more are turning their attention to the country's aquaculture sector.
Chinese consumers are increasingly favoring premium seafood, and the country's industrial base has responded to the shift by pouring millions into the development of state-of-the-art aquaculture facilities.
In December 2023, Ocean Aquafarms announced the signing a strategic agreement with Yantai Jinghai Ocean Fishery to construct a land-based trout farm with a 3,000-metric-ton capacity. Ocean Aquafarms is also involved in the Norsal land-based salmon farm, also in Yantai. And Nordic Aqua Partners, which planning to build an RAS salmon farm in Ningbo, China, recently announced the project is on schedule and in line with budget.
Most recently, state-owned China International Marine Containers Group announced it was investing CNY 100 million (USD 14 million, EUR 13 million) in a recirculating aquaculture system (RAS) project to farm tilapia in the province of Guangdong. The investment follows on the company's move to dive into offshore aquaculture system development and expansion of its Container+ technology, which involves "dual-cycle" land-based systems equipped with a digital platform integrating big data, artificial intelligence, Internet of Things, and other information technology solutions "to achieve a full range of operational standardization, management digitization, decision-making intelligence and a whole process of traceability, with the digitalization safeguarding the high-quality aquaculture."
"In the future, CIMC Fishery will rely on the advantages of equipment manufacturing and scientific and technological innovation to improve the whole industry chain operation, and strengthen efforts in the fields such as aquaculture system and equipment R&D and manufacturing, aquaculture operation, feed research, fresh food distribution, and production and sales of pre-made dish from aquatic products, so as to contribute to the modernization and high quality development of fishery industry, and rural revitalization with the empowerment of high technology," it said in a press release.
The company's pilot farm is currently in operation, with eight pools each capable of producing 9 metric tons of fish per cycle. The high-density farming is made possible by a water-treatment system providing "guaranteed production, disease prevention, and necessary treatment of pollution," CIMC said.
Speaking with SeafoodSource, an executive at a company farming and processing tilapia in southern China said the investment “doesn’t make sense” commercially but may have been prompted by recently high prices for tilapia in the short term.
“The tilapia raw material price has skyrocketed recently in China, [but] customers will buy other alternatives if the prices continue to rise,” he said.
Nonetheless, RAS technology, which is capable of delivering higher productivity, is growing more appealing to investors in China. While incurring higher costs, some RAS systems in China and elsewhere allow for up to five harvests per year of species such as shrimp or tilapia. Guangdong Evergreen, Guangdong Haida, and the Tongwei Group have all committed to the technology, with Tongwei recently beginning construction on a 200,000-square-meter RAS shrimp farming complex in Dongying, China.
Iris Wang, the head of market development at the China offices of the Global Seafood Alliance, said RAS aquaculture represents the future of seafood production in China, especially as a greater global emphasis placed on traceability and sustainability concerns threaten the activities of China’s distant-water fleet.
Wang said the push toward RAS in China has been accelerated by the imposition of more stringent environmental rule enforcement on Chinese aquaculture producers have prompted larger firms to invest in RAS for greater control, which has become an ever-more pressing demand from investors who are growing wary of problems with the Chinese aquaculture market as a whole, according to Wang. Investors are also factoring in the labor savings involved with RAS farms, Wang said.
“China’s young generation is less keen to work on traditional farms, where the living conditions may not be as good as what they can get in the city," Wang said. "RAS farms demand fewer human resources and normally provide better living conditions that suit young people."
It is not just China turning toward RAS, either, as a report form Norwegian financial firm DNV predicts 12 percent of global finfish aquaculture will come from onshore RAS systems by 2050.
