Sino Agro Food Inc (fka SIAF)

[The Swede]

Leading Chinese RAS jade perch farmer not in profit, casts doubt on Sino Agro’s megafarm


One of China’s leading jade perch firms using recirculated aquaculture systems (RAS) is not making a profit and has cast doubt on jade perch operations at Sino Agro Food's much larger "megafarm".

Xu Xinhong, technical manager at jade perch firm Santai Eco-Fishery, told Undercurrent News it appears the megafarm is having difficulties with jade perch.

“The [jade perch] market is immature, costs are high, and technological problems aren't being solved easily. There are obstacles," Xu said.

"We’re not in profit,” he said.

On Friday (Nov 17) Undercurrent reported Sino Agro's megafarm has had problems farming freshwater shrimp. While these problems are fixed the megafarm is primarily being used to farm fish, such as jade perch, not shrimp.

Sino Agro’s chief scientific officer, Anthony Ostrowski, confirmed during Undercurrent's tour of the megafarm in September jade perch has been farmed since 2015.

Xu said he has visited the megafarm and helped work on technical matters. "I'm very familiar with the megafarm," he said.



Santai Eco-Fishery

After a mini boom there are currently about 100 companies farming jade perch in indoor RAS farms in south and east China, according to Xu. He reckons in Guangdong province 20 companies, both large and small, use RAS to farm the species.

This boom is largely because of the suitability of jade perch, a fish native to Australia, to indoor RAS systems.

Santai -- which farms jade perch at its indoor RAS facility in Dongcheng, Guangzhou, the provincial capital of Guangdong -- was one of the first in China to farm jade perch with RAS, he said. Its facility was built for $10 million in 2012.

Its All Weather Eco-Fishery RAS was built with equipment imported from Malaysia.

With its year-round production from two nurseries, 24 grow-out tanks each 90 meters squared, and two holding tanks, Santai can harvest up to 300t of jade perch every 4½ -6 months, according to Xu.

Product is mostly sold to around 100 hotels and restaurants in the Pearl River Delta region and Hong Kong.

Developing a high-end product

According to Xu, a challenge for firms farming jade perch in RAS is the need to develop a superior, more valuable product, to overcome high production costs.

For instance, jade perch farmed in outdoor ponds in China can fetch as little as CNY 18-20 per kilogram, farmgate, during peaks in supply, according to Shuichan, an industry publication.


Jade perch sashimi.

“[Shuichan's price] is if you don't do anything to add value,” said Xu. “If you have a brand, farm with RAS, you can do sashimi and get 3A recognition. You might be able to get a higher price.”

Santai has pioneered this; it was China’s first company awarded a license to market RAS farmed jade perch sashimi, according to Fish First. It was also one of the first few RAS jade perch firms awarded a license to export to Hong Kong.

According to Xu, the firm can subsequently attain some of the highest prices in the market; it sells live jade perch for up to CNY 140/kg, 6.7 times above Shuichan’s reported farmgate price. It can also secure contracts for its product six months in advance, which helps with production management.

To achieve these things the firm has done a number of things.


For instance, to eliminate an unpalatable, oily taste negatively associated with jade perch in Asian markets, Santai transfers jade perch into tanks with faster water flow-through rates in the last week or so before harvesting. Here, jade perch does “strenuous exercise” and is fed a low-feed diet, reducing fat content, and improving taste.

It also stocks live mussels in tanks to keep PH levels in balance, instead of using chemicals. The firm buys 30t at a time and keeps them in quarantine for six months, before transferring them into the tanks.

It monitors operations carefully; the company receives biannual, unscheduled inspections from licensing authorities, and customers receive certificates of health and antibiotics used.

Meanwhile, workers grade fish every 20 days so that it can farm and harvest at one time fish in specific sizes (Hong Kong customers prefer 450g fish; Chinese customers, 600g fish).

Also, the firm ships its jade perch direct to customers with its own small fleet of trucks, said Xu, which helps to cut out middlemen.

According to Santai’s website, the firm also used to have a sales office in Hong Kong, although this has since been closed.

Xu told Fish First the firm is also constantly looking at how to reduce costs. "After close to five years of operation Santai is still always look at ways to lower costs. More RAS equipment is being manufactured in China because of the increase RAS aquaculture farming. So when we need to upgrade or replace equipment we can look to buy equipment made locally," he said.

By comparison, jade perch produced at the megafarm -- whose first phase of construction is expected to cost $149.6m and second phase $240m -- is being marketed for CNY 40/kg.


This is according to the website of Zhongshan A Power Agriculture Development Co., one of the firm’s behind the megafarm project. Jade perch prices were last updated in July.


A Wechat blog post by Chengshi Lingjuli shows Zhongshan A Power may also be selling some quantities of jade perch sashimi. The post also shows jade perch produced at the megafarm sold at what appears to be a local seafood market.

Zhongshan A Power did not respond to Undercurrent’s requests for clarification about prices for the megafarm’s jade perch.

Sino Agro was not available to answer questions at the time of publishing.

Market challenges

Xu conceded his firm can’t sell large volumes of jade perch at CNY 140/kg.

And spot markets for live jade perch cannot always absorb the volumes it wants to sell.

“Today I might produce 10,000 fish. But perhaps the market only needs 500 live fish,” he said. “This means the rest of the fish needs to stay in the tanks for longer." This adds to costs.


An increase in market competition has driven down prices, too, he said. “Competition is pretty fierce," he said.

Meanwhile, more technical challenges have arisen, due to disease. According to Xu, Santai used to import jade perch broodstock from Australia, and disease outbreaks were rare.

“But in the past few years incidence of disease has increased and mortality rates are somewhat high,” he said.

During the growout phase at Santai, fish which show signs of disease are separated into different tanks where they undergo treatment. Those which don’t recover are destroyed.

Xu said disease has become a “big obstacle for industrial producers”.

Summing up his firm’s experience to Undercurrent, Xu opined: “It is a long road to go down to really make money from jade perch.”

Speaking more broadly about RAS development in China, Xu told Fish First: "Problems encountered in developing RAS systems in China are down to a lack of joined-up thinking between RAS engineers and aquaculturists. In this sector there needs to be much greater synthesis of skills and teams of skilled experts with expertise in a broad range of fields which industrialized aquaculture touches upon, such as biology, farming, automization control systems and machinery. At the moment, in many respects, expertise is concentrated only on resolving single issues."

Megafarm’s other fish

Besides jade perch, Zhongshan A Power is marketing other fish produced at the megafarm on its website, including carp, silver perch, mandarin perch, marble goby and murray cod.

Prices for these fish are as follows: CNY 26/kg for carp; CNY 70/kg for silver perch and mandarin perch; CNY 110/kg for marble goby; and CNY 150/kg for murray cod.

Zhongshan A Power is also marketing vannamei shrimp for CNY 76/kg, as well as macrobrachium rosenbergii for CNY 76/kg, or $11.46/kg. However, neither vannamei nor macrobrachium are listed as available, as is the case with jade perch, silver perch and murray cod.

Only marble goby, mandarin perch, and carp are listed as available, with their respective pages updated between July and August.

According to the site, Zhongshan A Power can supply a maximum of 25t of marble goby, 2.5t of mandarin perch, and 2t of carp to prospective buyers.


https://www.undercurrentnews.com/2017/11/21/leading-chinese-ras-jade-perch-farmer-not-in-profit-casts-doubt-on-sino-agros-megafarm/