China’s leading tilapia processor has reported CNY 134.9 million (USD 21.5 million, EUR 15.5 million) in revenues, up 15.2 percent year-on-year. Investors will be worried that profit at the listed arm of Baiyang Aquatic however slipped 32.8 percent to CNY 56.8 million (USD 9.1 million, EUR 6.6 million). China’s leading tilapia processor in volume terms, Baiyang Aquatic in 2012 saw its revenues jump 15.5 percent to CNY 1.2 billion (USD 192 million, EUR 138 million) while profits jumped 59 percent to CNY 84 million (USD 13.4 million, EUR 9.7 million).
Baiyang blamed the slump in profits on a surge in expenses: whereas revenues rose 15.2 percent expenses were up 18.25 percent while what the firm terms “administrative and salaries” rose 36 percent, in part due to an expansion of the company’s white collar marketing and online sales team. Crucially the firm points to its cost of financing, up 30 percent year-on-year: this has been driven by the appreciation of the CNY in the past year (the Chinese currency dipped 2 percent on the dollar in the first three months of 2014 but rose 6 percent on the dollar in 2013) according to the Baiyang board. The company also points to the rising cost of fish feed, one of the reasons why Baiyang is itself expanding its feed production capacity.
The Baiyang strategy for the future appears centered on expanding into new global markets while also expanding its offering of tilapia-based products and at the same time building its presence across China as an aquafeed supplier. “One of the advantages of Baiyang is our presence in the three main tilapia production regions [Guangdong, Hainan and Guangxi] and this allows us to maintain our position as the number one market player,” explained the company board in a written briefing to investors and media. “There are more newcomers but our company has withstood the test,” the statement added.
Meanwhile, seafood exports from the key tilapia producing region of Hainan continued to pick up, according to authorities in Hainan where in the first quarter of this year, 28,400 metric tons (MT) worth USD 133 million (EUR 96 million) (up 6.15 percent in value). Tilapia exports at 23,200 MT in the first quarter were worth USD 91.98 million (EUR 66.3 million), up 20.7 percent on the same period last year. Hainan authorities pointed to strong exports to the United States, South Korea, France and Belgium but also pointed to demand from two Middle Eastern markets — Israel and Iran. “Overall, Hainan has 18 national markets which significantly increased,” reported the provincial government of Hainan, an island province in the South China Sea.
The long-term outlook is bright, according to Baiyang’s newly released annual report, which predicts a long-term substitution of cod and other overfished species by tilapia. It points to the strength of tilapia in the make-up of China's total aquatic exports: at 403,600 MT frozen tilapia counted as the biggest single species of fish shipped from China in 2013.
