Seafood seminar discusses ways to boost Irish industry’s profitability

By Joe Dermody

Thursday, January 26, 2012

Adding value and scale is the big challenge facing the seafood sector, 50 seafood companies heard at a networking seminar yesterday in the Radisson Hotel, Dublin Airport.

The food companies looked at how to achieve scale via processing and identifying routes to overseas markets at yesterday’s seminar with experts from fisheries organisation Bord Iascaigh Mhara (BIM) and others.

BIM also suggested that the pooling of individual companies’ resources would boost profitability, reduce time to market, and improve customer service.

The seminar offered advice on approaching European buyers, and BIM’s concept of an Irish-owned European seafood hub to address route to market issues.

The seminar also looked at Ireland’s peripheral location. For companies relying on group logistics, the Irish delivery time is four to six days, versus 24-48 hours for mainland EU competitors. As a result, net profitability of Irish seafood processing companies stands at 0.94% versus the 4%-6% of EU competitors.

Minister for Agriculture, Food and the Marine Simon Coveney said: "Seafood exports continue to perform well with an estimated growth of 13% to €420m. The main challenges are scale, route to market and meeting market requirements. Currently, out of approximately 138 seafood companies in operation, only 40 of these have a turnover of more than €5m, while 70 have sales of less than €1m.

"In contrast, our typical European competitor has a turnover in the order of €20m. This lack of scale limits our ability to invest in the market place and maximise the profitability of the sector. Adding value to our seafood is also required if we are to differentiate ourselves from our competitors."

Mr Coveney urged seafood companies to look at new projects.

There were also talks from Joe O’Flynn, managing director of the Consumer Foods Division of the Irish Dairy Board, and Bruno Corréard, a retail consultant with experience as a seafood buyer for Carrefour.

BIM are working on a number of projects to overcome these issues, including the development of deep sea farms which, if put in place, are capable of producing up to 15,000 tonnes of Irish organic farmed salmon per farm annually.

At today’s prices, 15,000 tonnes translates to €102m to the market every year. BIM has already set a target of €50m in additional value-added sales by 2013 by working with companies on new product development in its purpose-built Seafood Development Centre.

BIM’s chief executive Jason Whooley said: "There is a major market opportunity available to the Irish Seafood processing sector in the medium term; the increased global demand driven by population growth in developing countries — particularly in Asia and Africa — are good examples of this.

"Our international competitors are gearing up for that opportunity and we need to think long term and get ahead of the game. If we can use this seminar to discuss solutions to ensure we can meet this opportunity then the industry will benefit from increased profitability across the board."

This appeared in the printed version of the Irish Examiner Thursday, January 26, 2012