China hopes to climb the tuna business ladder and aims to become one of the world’s leading processors, with plans for a coastal city south of Shanghai to be home to 11 tuna processing companies with the help of the government.
With government subsidies and government-assisted tuna supply deals with Papua New Guinea and Indonesia, Zhoushan hopes that the 11 companies will boost the city’s annual capacity of 110,000 tons of whole round tuna to 150,000 tons.
This will mean one city in China will produce a quantity 15 percent of Thailand’s annual capacity of around 800,000 tons of tuna, a key player within the market. With increased focus on the future of tuna stocks and sustainability, the importance of the sourcing of the tuna becomes paramount. Where will the raw materials for this growth come from?
It is thought that the bottleneck in sourcing tuna is limiting the potential for business development. Chen Bin, an official with the foreign trade section of the city’s Ocean and Fisheries Bureau told Mark Godfrey of SeafoodSource: “Right now there are only 29 fishing boats for tuna-processing in Zhoushan and they belong to five different companies. We need more scale…besides our annual import figure of tuna is less than 300,000 tons. We have really been impacted by restrictions on fishing in other seas.â€
While formerly concentrating on squid processing, Zhoushan hopes to focus its production towards canned tuna, with plans to mimic the success of nearby Ningbo, also a tuna processing area.
Skipjack and yellowfin tuna are the most common species used for the canned tuna market, meaning a consistent source of this species of tuna would be vital for the growth of the city’s market in this way. But with neighboring city Ningbo, which in 2012 reached canned tuna exports figures of 22,300 tons already taking a substantial proportion of China’s total catch of the skipjack and yellowfin, Zhoushan will have to develop its own new sources of tuna raw material and therefore has requested government aid in importing whole round from Papa New Guinea and Indonesia.
Chen explained that a scarcity of resources has meant tuna prices have increased beyond reach of small tuna companies in Zhoushan. He implied that the city’s government will help small businesses who depend highly on imports to acquire extra boats, or alternatively source tuna from other countries at a better price.
He pointed to the success of local firms when sourcing overseas tuna. The Zhoushan-based Hailishheng Group has a deal with the government of Papua New Guinea and the firm’s projected USD 25 million tuna processing plant in that country is expected to produce 300 tons of whole round daily, a figure on par with key processing players such as Philippine Century Canning Corp.
The Chinese government in return has provided as grant aid to the Papua New Guinea government, a frozen tuna processing facility in Lae, run by local firm, Frescomar, which is part of Frabelle PNG, however the plant is not currently in operation. China has also assisted in financing infrastructure in Papua New Guinea, putting up funds for the Pacific Marine Industrial Zone (PMIZ), but currently no construction has begun yet due to a conflict with land owners.
