Golden haul for seafood exporter

Golden Fresh business development manager Kylie Saw showing some of the company’s products. — Photos: CHIN CHENG YEANG/The Star

VALUE-added seafood exporter Golden Fresh Sdn Bhd is raising its output by 15% this year to meet the demand from existing markets in Australia, the United Kingdom, France, South Africa and the Middle East.

“The global market for aquaculture and fisheries is projected to reach 188mil tonnes by 2020 from 107mil tonnes in 2005,” said general manager Saw Lip Teik in an interview, adding that the global economic downturn had not dampened the demand for seafood.

“An expanding population and rising health consciousness among consumers are expected to continue driving demand for seafood products,” he added.

“For the current financial year, the company will produce 12,000 tonnes of value-added seafood, about a 15% increase over last year,” Lip Teik revealed.

“We estimate that the cost of importing the raw materials for the 12,000 tonnes will be approximately US$35mil or RM157.5mil, based on today’s exchange rate.

“Last year, the cost of importing raw materials was about US$30mil or RM107mil, based on the exchange rate one year ago.

“We have recently invested RM8mil on a full line of state-of-the-art processing equipment which allows us to produce a different range of products targeting specific markets,” Lip Teik said.

In September, the company launched a few new products, such as Dusted Baby Squid and Cheezy Fish Fillets under the Pacific West Brand and Dusted Squid Bites under the Subi Brand for the local market.

The products are available at major retailers such as Tesco, Aeon Big, Giant, Cold Storage as well as other regional and independent retail stores.

“We will continue to show robust growth with our strong global sales network,” he said.

According to Lip Teik, they would like to boost sales in Europe where import tax posed a challenge.

The EU supports its own processing factories through the implementation of Autonomous Tariff Quotas which allows raw materials to be imported into the EU without duty for the processing industry. However, imported value-added seafood from Malaysia are subject to 7.5% to 20% import tax.

To help push up sales in the EU and get on a level playing field, Lip Teik said the company intended to invest RM15mil on a manufacturing facility in Eastern Europe.

“This would be a joint venture. The facility will have an initial production capacity of 3,500 tonnes per annum,” he said.

Golden Fresh exports more than 90% of its products, while the domestic market absorbs the remainder.

According to the Malaysian Frozen Foods Processors Association (MFFPA), the quantity of Malaysian seafood export is expected to drop to 150,053 tonnes in 2015 from 166,725 tonnes a year ago, while its value is projected to decline to RM2.23bil from RM2.35bil.

MFFPA chairman Saw Hai Earn said this year the European seafood import figure was expected to be at 5.735mil tonnes, valued at €19.9bil.

“The value of the European seafood imports in 2014 was about €19.5bil,” he said.

According to Hai Earn, the European gross domestic product (GDP) in 2014 stood at about €14.3tril while the combined GDP of the UK, France and Germany alone was €7.25tril.

“The GDP per capita is €34,000 per annum. We should be exporting more to Europe to tap into the massive market,” he pointed out.

“But because there are only a handful of European Union (EU)-approved prawn farms and fishing vessels in the country, we have not been able to tap into the European market effectively,” he explained.

Hai Earn said the local prawn farms and fishing vessels were reluctant to obtain EU certification that would enable them to export to Europe because of the investments that this would entail.

“To obtain the necessary certification, the farms and fishing vessels need to invest substantially to upgrade their facilities to meet EU health requirements,” he said.

Hai Earn said the Federal Government should give rebates to the owners of prawn farms and fishing vessels that wanted upgrade their facilities to comply with EU’s health standards.

“This will encourage more local farms and vessels to obtain EU certification,” he added.

The Malaysian seafood processors face high import duties imposed by EU countries with the withdrawal of the Generalised System of Preferences (GSP) effective Jan 1, 2014.

Competitor countries such as Bangladesh, India, Vietnam and Indonesia are still eligible for preferential tariff treatment of 0-7% under the EU’s GSP scheme.

“The EU is the world’s single largest market. Last year, Malaysia’s trade with EU grew 6% to RM143.98bil from RM135.79bil in 2013,” Hai Earn said.

On the Malaysian-Turkey Free Trade Agreement (MTFTA), which recently came into effect, Hai Earn said the import duty on seafood products from Malaysia was still very high, ranging from 32% to 54%.

“We hope the Malaysian government can expedite the Malaysian-EU FTA negotiation process and that the tariff treatment on fishery products will be favourable to the seafood industry,” he said.

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