I read yesterday on “Norway” (the official Norwegian Government Sth Korean Consular type website) that a Norwegian seafood company (Marine Harvest) opened a Seafood Processing Plant in Incheon, South Korea.

I have to admire the initiative. I admire South Korea for addressing the demand for Salmon, and acting upon that demand by facilitating its continued supply… by what can only be (I postulate) some type of joint venture that will help their foreign joint venture partner successfully navigate complicated domestic market and country of origin rules for imported seafood.  I admire the Norwegians for getting out there making the most of their FTA with South Korea, and securing a market for their Salmon with an adherence to quality, aggressive marketing, and a “can do” attitude.

The Norway article refered to the opening speach of Norwegian Ambassador to the Republic of Korea, H.E. Torbjørn Holthe:

“The investment in this packing plant shows Marine Harvest’s commitment to bringing fresh Norwegian salmon to South Korean consumers”

The Marine Harvest processing facility (which opened two days ago in Incheon) is essentially a salmon filleting and packaging facility. The article quotes Henrik Vikjaer Andersen, Norwegian Seafood Council Director for Japan and South Korea as saying:

“With this modern factory Marine Harvest can make an even stronger case to South Korean consumers that their fresh Norwegian salmon is as safe to eat as it is tasty.”

But I read the subtext like this:

With this facility in place, we (Norwegian Marine Harvest) can readily supply South Korea (and other North Asian markets China and Japan) with ‘cheaper’ high quality product, that is prepared locally, which not only enables more connectivity with the local North Asian Market, but strategically places Marine Harvest salmon products right in the middle of the domestic mass market (at least in South Korea for the time being). In addition, the move also provides Marine Harvest with considerable leverage over other regional producers whose products will continue to be perceived by locals (and thereby forcing those other products to market themselves in South Korea) as premium foreign products.

The Article continued:

“Since the FTA between Norway and the Republic of Korea came into effect in 2006, Norwegian fish exports to South Korea have seen a sharp increase. Norwegian seafood exports totalled NOK 462 million in 2012, about half of which was salmon. In 2012 South Korean imported more fresh Norwegian salmon than frozen for the first time, a trend that continues in 2013.

“Marine Harvest’s brand new facilities will further fuel this development. In just a few days a salmon swimming in pristine Norwegian waters is transformed into high quality seafood ready for consumption in South Korea” H.E. Ambassador Holthe continued.

Marine Harvest is a world-leading seafood company present in all major salmon farming regions in the world and it produces one fifth of the global salmon production. In addition to fresh and frozen salmon, Marine Harvest offers a wide range of value added products such as coated seafood, ready-to-eat meals, finger food and smoked seafood. The company employs 6 200 people and has operations in 22 countries worldwide.”

The move by Norway should be an inspiration to others. It should at least inspire producers from my native New Zealand. I am looking at the similarities between New Zealand and Norway, and the advantages New Zealand has (in a farmed salmon context that is). I think New Zealand should do something similar… if not better. It isn’t as though New Zealand is not able.

New Zealand has an FTA with Hong Kong – a market of 7.155 million people (2012 World Bank). This market although only around 14% of the size of the South Korean market also also enjoys a high demand for salmon products. The same goes for Singapore (with whom New Zealand has a CEP Agreement) which has a market of  around 10% of the size of the South Korean Market. Singapore also also enjoys a high demand for salmon products.  But I am thinking more about New Zealand’s  FTA with China, whose massive market (a staggering population of 1.3 billion people) also has a high demand for salmon products… To top it off, just like Norway, New Zealand produces fantastic Salmon. I would go so far to argue that New Zealand’s farmed Chinook salmon (which is characterised by its large size) is in a league of its own.

Yet the salmon farming in New Zealand is nowhere near as cohesive as it is in Norway.

Recently I saw a presentation by New Zealand King Salmon, CEO Grant Rosewarne… and to be honest I was both inspired and saddened. I was inspired by Rosewarne’s boldness and clear vision. He presented a picture of New Zealand King Salmon doing great things for our region, both economically and environmentally.  But I was saddened by the lack of boldness and lack of vision shared by so many other New Zealanders, who cannot see Rosewarne’s vision (or refuse to see it), who just cannot internalise Where New Zealand is now and then take a long term strategic view of the market, nor can the anticipate the relationship between between development at home and market engagement abroad.

Without that cohesion and shared entrepreneurial spirit that Norway obviously has, New Zealand cannot possibly begin to make good on it’s potential, and utilise the full potential of not only it’s resources and it’s spirit, but also the international relationships New Zealand possesses, and recognition brand New Zealand receives abroad.

To truncate a long story, and postulate a point – New Zealand has to provide it’s primary producers with the requisite social licence to operate. At present New Zealand cannot produce enough salmon to meet global demand not only for salmon, but for New Zealand salmon.

Table showing Global Farmed Salmon Production per year

New Zealand King Salmon has applied to bring this total annual production up to 30,000 tonnes, which although a significant increase in productivity; at 1.8% of total farmed salmon production, is still considerably less than the Faroe Islands and Tasmania, and miles from the production of Norway (whose farm salmon comprises almost two thirds of the market).

As of yet the approval (“the social licence to operate” ) to expand the King Salmon operation from 5 ha to 12 ha is still pending… with ferocious opposition coming mostly from New Zealand’s considerable ‘green’ lobby.

However I am an optimist. I am hoping the reason will win the day and that the New Zealand Government will realise that if they do not facilitate growth; notwithstanding the high quality of New Zealand salmon, the larger producers will continue to occupy a higher share of the market, and worse still,  our customers who demand New Zealand salmon, and who are unable to source New Zealand Salmon, will buy the next best (probably Norwegian) as shoppers usually do. And as we’ve seen above, this is going to be easier with Norwegian salmon now being processed and packaged locally, in Incheon.

Related articles

• Consumer NZ, King Salmon at odds over fishes’ food (radionz.co.nz)
• Norway’s Salmon Stocks Repel Market Plunge as Production Peaks – Bloomberg (bloomberg.com)
• Piscine Reovirus, a salmon virus fresh from Norway (vancouverobserver.com)
• Wave energy to power salmon farm near Isle of Muck (scotsman.com)
• Consumer NZ, King Salmon at odds over fish food (radionz.co.nz)
• Sea Temperatures and Disease Lead to Fluctuating Salmon Prices (spendmatters.com)