Seafood sector faces rocky times

By DAVID TAN

GEORGE TOWN: The seafood industry in the country is expected to be rocked by financial crisis and retrenchment exercises in the next two to three months should the local authorities fail to overturn a European Union (EU) ban on import from Malaysia.

The “temporary ban” will stay until the health and fishery authorities improve hygienic conditions in the aquaculture farms, seafood-processing facilities, fishing vessels and fish-landing areas.

Malaysian Frozen Food Processors’ Association (MFFPA) president Ch’ng Chin Hooi said its members presently had processed seafood in 15 containers, with an estimated total value of RM15mil to RM20mil, ready for export to the EU.

“We now have to find alternative markets. But it is usually very difficult to find alternative markets so soon for so much expensive seafood. Over 80% of our members’ seafood products go to the EU,” he told StarBiz.

Ch'ng said the total loss estimated for its members would be over RM1bil for three months. ”This is not taking into consideration the losses suffered by the chilled, cooked, live and dried seafood sectors,” he said.

Presently 43 companies in the country export frozen seafood to the EU.

Some MFFPA members were also facing pressure from financial institutions, Ch’ng said, adding: “Some of the banks have reduced the loans extended to our members. The reason given is that since they are now not exporting to the EU, they would also not need that much loan.”

He said MFFPA had already written to the relevant ministries seeking their intervention.

“The MFFPA would like the Government to advise the banks not to reduce loans and banking facilities to our members. We also appeal to the Government to look into releasing soft loans to the affected seafood exporters,” Ch’ng said some members had started to retrench their workers.

“Some 20% of the frozen seafood workforce, comprising 3,000 to 4,000 workers, located largely in the northern region will be retrenched soon,” he said, adding that most of them were locals.

If the “temporary ban” were prolonged, Ch'ng said a host of other supporting industries, such as packaging and transportation, would also be affected.

He said if the authorities were to enforce the implementation of EU’s health standards at all the seafood processing plants and aquaculture farms, they could get the job done in three months.

The conditions on the vessels and landing areas might take longer to improve, he said.

“But if the processing centres and aquaculture farms were 'clean', we could export to the EU the seafood sourced from the farms,” he said, adding that about 40% of its frozen seafood exported to Europe came from farms.

Courtesy: The Star Publications