China canners net local market

Published on
October 2, 2014

The recent derailing of a Hong Kong initial public offering (IPO) for Dalian-based China Tuna Industry Group has highlighted the lack of transparency of China’s giant tuna-focused catch and canning firms. Set to fund the expansion of its fleet, the Dalian firm’s bid for an international listing — at a time of tighter liquidity in mainland China’s troubled banking sector — will have given food for thought to several other similar Chinese firms seeking to expand their international catch operations and cash in on rising demand for sushi as well as convenience-oriented seafood like canned sardines and tuna.

Several companies contacted for this article said their development plans are driven by the prospect of increased domestic sales. Among the local catch-and-can companies with a presence in the domestic market: Xiamen Gulong Food Co. sells its 120g canned spicy sardines for RMB 10.50 (USD 1.71, EUR 1.35) at Beijing outlets of 24-hour retailers 7-11 and Quik, both with a large presence in Beijing and northern Chinese cities. Staff contacted at Gulong’s main sales office in Xiamen said the firm has more recently targeted the domestic market due to increased demand for seafood and convenience foods here.

Gulong also retails a wider selection of canned seafood at outlets of WalMart. Canned seafood (most tins are in the sub-RMB 20 [USD 3.25, EUR 2.58]range) appears particularly popular with young consumers; it was apparent from visits to stores and supermarkets and talks with consumers and retailers across the Chinese capital that low to middle income earners and students buy sardines for consumption at home and at work.

The firm was formed in 1994 (a period of much privatization in China) out of the state-owned Xiamen Cannery factory built decades before. The firm remains controlled by local government today.

The firm, which claims to have offices and facilities in Latin America and the Pacific Islands (Fiji and Vanuatu) also produces canned tuna and sardines in tomato sauce under the “Avena” and “Tahani” brands for the European and Middle Eastern markets respectively. It also counts the UN as a major client — Gulong cans meat, seafood and vegetables for UN aid bodies like the World Food Program.

Several large Chinese canning firms were born out of state-owned canneries set up in China’s initial industrialization period in the 1950s. Another firm with such a ubiquitous presence in Beijing retail outlets, Guangzhou Eaglecoin Enterprises Co., was, like Julong, born out of a state cannery (the Guangdong Cannery) and operates the “Eagle coin” brand which has targeted overseas and (more recently) domestic sales: the firm’s oblong shaped tins appear in supermarkets and retailers across China and at RMB 10.50 (USD 1.71, EUR 1.35)/184g: a special offer in prominent near the till outlets of WalMart offers two tins for RMB 18 (USD 2.93, EUR 2.32). Eagle coin sales staff phoned for this article explained how the firm has targeted the value end of the overseas market for tuna with USD 45 (EUR 35.62) per 24-tin box of 180g tins (minimum purchase 200 cartons).

Most of the Chinese canners targeting the domestic market appear to be operating out of the southerly provinces of Fujian and Guangdong, both homes to growing fleets of pelagic vessels operating in international waters. Brands include “Huanlejia” brand of canned dace and anchovies produced by Zhanjiang Huanlejia Food Co, also based in Guangdong province.

Chinese firms like Huanlejia say they are seeking to diversify to benefit from growing demand in domestic as well as developing-country markets. Another firm, Haibao Foods, cans braised eel and tuna in vegetable oil (RMB 9.60 [USD 1.56, EUR 1.24]/185g) under the “Yu Jia Xiang” brand but also supplies cans to customers in Africa and the Middle East.

Likewise, Shanghai Maling Food Co (which runs canneries in Rongcheng, a major seafood processing hub in Shandong province) sells tuna and sardines under its “MaLing” brand but has also started producing frozen breaded seafood in a western style to fit Asian tastes: it packages frozen breaded croaker and breaded “sardine steaks” for the local market.

Multinationals seeking exposure to China’s growing demand for canned seafood include Century Tuna, a Thai-based firm which sells under its own brand name in China with serving suggestions on the cans to fit local dietary norms (tuna with rice). Sold under the slogan ‘think healthy think Century’, the firm’s tuna cans are at the higher end of the price range: RMB 17.80 (USD 2.90, EUR 2.30) and RMB 18.40 (USD 3, EUR 2.37) for 180g. Likewise, Malaysia-based Rex Canning Pvt Corp. processes and cans tuna in its China factories for sales locally and for export.

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