One of China’s leading shrimp exporters, Zhanjiang Guolian Aquatic Products, has advised investors that it will report a net loss of CNY 219 million (USD 35 million, EUR 27 million) for 2012. The firm, a Walmart supplier, blamed higher raw material costs as well as weaker export prices and higher inventory levels. Guolian however is predicting a return to profitability in 2013, citing the maturity of cultivation and processing projects that it has invested in.
Guolian’s case has not been helped by an anti-dumping case taken by the U.S.-based Coalition of Gulf Shrimp Industries, which targeted what the CGSI claimed was unfairly subsidized shrimp product from China. In a statement Guolian said the anti-dumping duties were unfair but also included product from Ecuador, India, Indonesia and Vietnam. The firm said it would cooperate with enquiries by the U.S. trade authorities.
Another firm with weaker earnings is leading scallop producer Zhangzi Dao. The firm’s revenues dropped 10.9 percent year over year to CNY 1.62 billion (USD 261 million, EUR 203 million). Net profits were down 76 percent to CNY 117 million (USD 19 million, EUR 15 million). The firm in the fourth quarter of 2012 lost CNY 100 million (USD 16 million, EUR 13 million), a tumble Zhangzidao blames on lower yields of ezo scallops, weaker demand for abalone and tighter margins on live products. The firm also had to compensate a neighboring firm CNY 35 million (USD 6 million, EUR 4 million) for damage to abalone boxes caused during a typhoon in 2011 that effected Zhangzidao’s abalone cultivation operations in Rongcheng.
While it faces the tight land and sea supply — and a government frugality campaign squeezing high-end consumption — Zhangzidao is promising improved earnings in 2013 due to higher yields. The firm will raise output from 60 kilograms to 90 kilograms per mu by 2014. Zhangzidao drew attention by becoming the first Chinese firm to seek Marine Stewardship Council certification, entering the assessment process in October 2011. (Numerous attempts by SeafoodSource to talk to the certifiers completing the audit were unsuccessful.)
