Any hopes that China’s local salmon producers would benefit from the recent troubles of imported product appear to be dashed, with a leading local producer reporting dire results for the first half of the year.
Founded in 2011 in China’s landlocked northwestern province of Gansu, Gansu Wen Xiang Fishing Industry Co. was listed on China’s enterprise board (for small- and medium-sized firms) in 2016. The company’s results offer a glimpse into the scale and profitability of the local salmon and trout farming scene, which has struggled to challenge the grip held by Norwegian imports on the premium market in China.
Based in Liujiaxia Reservoir in Yongjing County, Wen Xiang Xiang (also known as Gansu Wen Xiang Eco Fishery Co.) farms cold-water trout –controversially marketed as “salmon” – as well as sturgeon, selling to the domestic foodservice and supermarket sectors. According to the company’s recently released interim financial report, Wen Xiang suffered a loss of CNY 4.4 million (USD 560,000, EUR 480,000) in the first six months of 2020. It reported revenue of CNY 5.1 million (USD 700,000, EUR 661,700), a decrease of 57 percent from the same period last year. The firm also lost CNY 2.4 million (USD 336,000, EUR 288,000) in the first half of 2019.
“The company's products are unsalable due to the new crown epidemic,” according to the company's recently released interim financial report.
The company, which was already struggling – it lost CNY 4.2 million (USD 588,000, EUR 546,000) in 2019, a drop of 324 percent year-on-year in company net earnings – has seen feed costs "static or rising" even as its product goes unsold.
The report was grim reading for vendors of salmon, including local firms, which have invested considerably in producing salmon locally. Firms like Wen Xiang lack the online presence of Norwegian or Chilean product, but were expected to pick up the slack in the market that followed the disappearance of much of China’s salmon imports following a coronavirus outbreak in Beijing being falsely linked to imported salmon.
Furthermore, according to the report, a government-backed effort to substitute salmon imports with local product appears to have been a failure. 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, but Wen Xiang’s results show the program has not done much for its profitability.
