Creating a frozen seafood products alliance is a 2015 priority for China’s leading seafood industry body. In its list of goals for this year, the China Aquatic Products Processing & Marketing Association (CAPPMA) also commits the organization to “curb vicious competition” in the seafood processing sector.
At the annual general meeting of the body recently, 120 heads of CAPPMA branches around the country voted on a series of proposals, one of which was to set up the frozen seafood alliance to encourage better branding and logistics for the sector. Another proposal agreed upon will see CAPPMA send a fact-finding mission to the United States to “investigate the potential of Asian carp fishing and processing” there.
The frozen fishery alliance is one way of building brands and thus widening the scope of China’s seafood sector away from low-value aquatic production and processing to more value-added opportunities in the domestic and export markets, according to the president of CAPPMA, Zhang Yuxiang.
Members need to expand domestic and international markets and CAPPMA will improve “information exchange” platforms to allow the sector better plan production volumes according to domestic and international pricing, Zhang told delegates. The conference also voted to establish a “traceability platform” under CAPPMA supervision as a means of improving quality and safety of Chinese seafood.
China’s processed seafood exports totaled 547,200 metric tons worth USD 2.54 billion (EUR 2.15 billion) in the first half of 2014, down 0.3 percent and 0.6 percent respectively. Processed exports accounted for a 25.9 percent share of total exports, down 0.4 percent over the same period last year.
CAPPMA is keen to improve its level of cooperation with international seafood bodies and research centers, according to secretary general Cui He, who runs CAPPMA on a day-to-day basis.
The alliance, if and when it materializes, could see numerous producers grouped under a single brand or group of brands, with similar pooling of logistics resources. This would address some of the weaknesses in a low-profit, low-innovation industry, suggested food and beverage industry analysts at a large brokerage firm in Shanghai.
Increased competition and weaker export markets are among the challenges for Chinese processors of seafood (which accounts for 30 percent of China’s agricultural exports — the largest single category) listed in a review of Chinese fisheries companies by analysts at Chinese brokerage Guotai Junan Securities.
The analysts also pointed to “increased technical barriers to trade” in export markets like the EU and United States, citing stricter requirements on residues. More significantly, perhaps, the Guotai Junan report warns against the “lack of branding” among Chinese seafood processors, and the “low technical capabilities” of many of the smaller players in the sector.
“Since 2002, when China became the world’s number one exporter of seafood … there are many enterprises but very few with international recognition or influence,” it read.
China’s seafood processing sector suffers from “massive overcapacity,” according to Feng Yuming, head of international sales at Zhangzidao, a key processor and exporter in northern China. He explains how his firm has purchased a processing factory this year to allow it expand its range of products which it’s tailor-processing for customers in Japan such as retailers.
“You’ve really got to be adding specific value to be successful in processing these days,” he said.
