Investors betting on China’s ability to supply its growing salmon needs with local production suffered a setback after a leading local producer of cold-water trout – controversially marketed as “salmon” – reported poor results.
Gansu Wen Xiang Fishing Industry Co (also known as Gansu Wen Xiang Eco Fishery Co. Ltd.) has announced a loss of CNY 4.2 million (USD 588,000, EUR 546,000) in 2019, a drop of 324 percent year-on-year in company net earnings.
Listed on China’s enterprise board (for small-to-medium-sized firms) Gansu Wen Xiang’s results offer a glimpse into the scale and profitability of the local salmon/trout farming scene.
The company’s profits fell even as its revenues soared, in a mirror of its 2018 performance. Last year, Gansu Wen Xiang, which raises salmon and sturgeon and sells seedlings for both species, saw revenues rise 18 percent to CNY 33.9 million (USD 4.7 million, EUR 4.4 million). Its net profit of CNY 1.3 million (USD 181,000, EUR 168,000) in 2018 represented a sharp drop from CNY 2.65 million (USD 371,000, EUR 344,500) for the same period in 2017. In 2017, its revenues stood at CNY 19.5 million (USD 2.7 million, EUR 2.5 million), up from CNY 13.8 million (USD 1.9 million, EUR 1.8 million).
Wen Xiang’s modest profit figures suggest the limited scale of such companies in contrast to the lure and scale of Norwegian salmon imports as opposed to domestically produced rainbow trout sold as salmon. The fresh-focused local production will also struggle in the close-down of much of China’s banqueting trade caused by the corona virus outbreak.
China was the largest growth market for Norwegian seafood in 2019. Founded in 2011 in China’s landlocked northwestern province of Gansu, Wen Xiang listed in 2016 and distributes nationally and online. It’s part of a government-backed effort to substitute salmon imports with local product. The “Sheng Shi Salmon” (“Eat Fresh Salmon”) is an industry standard launched in 2018 by the China Aquatic Product Processing and Marketing Association (CAPPMA) in coordination with several trout/salmon farming companies.
