New markets, outside investment to drive €1 billion opportunity for Irish seafood sector

Group Picture at the BIM Seafood Summit Pictured at the BIM Seafood Summit ‘Irish Seafood – Becoming a Global Seafood Player’ in the Irish Management Institute, Dublin are (L to R): Christophe Pelletier, Food Futurist; Minister for Agriculture, Food and the Marine, Mr. Simon Coveney, T.D.; Kieran Calnan, Chairman, BIM and Donal Buckley, Business Development & Innovation Manager, BIM 

  • China a major opportunity
  • Export sales up 18% on last year to nearly €0.5bn
  • Irish industry needs to upscale further

21 March 2013

  • China a major opportunity
  • Export sales up 18% on last year to nearly €0.5bn
  • Irish industry needs to upscale further

Ireland’s seafood industry has the potential to achieve €1 billion in sales by 2020 creating 3,000 new jobs in the process according to a BIM organised industry conference today titled “Irish Seafood – Becoming a Global Player”.

Kicking off the conference, Minister for Agriculture, Food and the Marine, Mr. Simon Coveney, T.D. said that “The ambition is that by 2020, Ireland will have become a global player in the seafood industry following expansion into new markets and engagement in a range of new value adding activities”. Outlining the scale of the opportunity for the industry the Minister said that “the Irish seafood sector is currently worth €822 million to the economy, employs approximately 11,000 people and is showing phenomenal growth on the export market with sales up 18% on 2011 to €493 million in 2012.” 

Although there is declining demand and prices in traditional markets such as the UK, Germany, Spain, and France due to the economic downturn, opportunity is knocking in emerging markets such as China where a growing middle class is driving increased seafood consumption. Global population is also growing and expected to reach 8 billion by 2025. This is expected to result in demand for an additional 42 million tonnes of seafood globally by 2030.

Food futurist Christophe Pelletier pointed out that even a very small share of the Chinese market would offer a significant boost to the Irish industry. “If every Chinese person was to eat 100 grams of Irish seafood just once a year that would equal 150,000 tons a year”, he noted. “And in the coming years, seafood consumption per capita per year in China is expected to rise from 26 kg today to 36 kg in 2020. Just a 1% share of that market would be greater than 500,000 tons a year.”

Irish firms should not write off traditional markets in the search for opportunities in Asia and elsewhere, he cautioned. “You must keep and protect traditional markets, optimise your customer base, and work with customers on innovating new products.”

Gorjan Nikolik, Food and Agribusiness Researcher with Rabobank International says; “Ireland has significant unused potential. With major production resources available, there is an opportunity to become a global player in the aquaculture industry. Economies of scale can be achieved very quickly in this business, even without a large domestic market in place.”

He says funding for the industry is also available from outside of Ireland, with venture capital attracted to innovative sectors outside of the high tech industry since the dotcom collapse of a number of years ago. Other potential investors include the aquaculture sector and the meat industry. “I think that as aquaculture grows and matures it will become more and more similar to the farming of poultry and pork and this will motivate investments from the large meat companies. We can foresee that the investment potential arising from Chinese companies looking to secure supply for their domestic markets is another major opportunity. Seafood will be in demand long after meat demand is satisfied in China.”

The Irish industry’s ability to exploit these opportunities is dependent on increasing in scale says BIM CEO Jason Whooley; “Appropriate scale will enable a company or a group of companies working collaboratively to invest in marketing, research and skills, all of which provide access to new markets and improve company performance. In turn, this will result in the sector delivering much needed jobs and exports. BIM’s goal is to assist with the development of one or two entities with a turnover in excess of €50 million in each of the key seafood categories – shellfish, pelagic, salmon and whitefish. These entities will in turn be supported by a range of innovative, smaller seafood companies.”

Greater collaboration within the sector and the establishment of appropriate joint venture operations and partnerships will play a key role in the achievement of this goal. BIM’s Collective Route to Market Scheme, which was launched in January 2013, is aimed at promoting such collaboration by offering seafood companies grant-aid assistance and expert advice to work collectively to reduce duplication costs, boost profitability and increase competitiveness on export markets.

The scheme will deliver €400,000 in funding the industry and it is anticipated that between four and six Seafood Collectives will apply for financial and business development support under it.

“We believe there is a global industry for Irish seafood”, BIM chairman Mr Kieran Calnan told the conference. “We will continue to work with industry on an ambitious business development strategy which will enhance current investment and advice programmes with new initiatives to deliver projects that go beyond the scope of any single company. This will improve the environment for investment and assist the industry to emerge onto the global stage by capitalising on opportunities in new markets.”

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