Af­ter years of chal­lenges, Nor­we­gian salmon is fi­nally con­quer­ing the Chi­nese mar­ket.

Norway-Asia Business Review - - Contents - ANRIKE VISSER

MM r Sig­mund Bjørgo gladly ac­cepted to stay on an­other year un­til the sum­mer of 2018 in light of re­cent de­vel­op­ments. Last De­cem­ber the re­la­tion­ship be­tween Nor­way and China was in­ten­si­fied af­ter a pre­vi­ous cool­ing pe­riod. This meant new op­por­tu­ni­ties for Nor­we­gian seafood ex­port. The change hasn’t led to an im­me­di­ate growth, but now there glooms hope.

“On 23 May 2017, Nor­way’s fish­eries min­is­ter Mr Per Sand­berg signed a pro­to­col with the Chi­nese vet­eri­nary author­ity min­is­ter Mr Shup­ing Zi, that will for­malise the vet­eri­nar­ian agree­ment on Nor­we­gian salmon ex­port to China. Af­ter months of dis­cus­sions and ne­go­ti­a­tions ever since Nor­way and China de­cided in De­cem­ber 2016 to re­sume trad­ing on pre­vi­ous lev­els, this pro­vides the solid frame­work we were wait­ing on”, Mr Bjørgo ex­plains.

In that sense, the ca­reer of Mr Bjørgo at NSC al­most has come full cir­cle. “I came on in June 2011 a few months af­ter the re­la­tion­ship be­tween Nor­way and China cooled. Back then we thought it wouldn’t last long. We were still ex­port­ing to China only in lim­ited num­bers. Then in 2013 and later again in 2015 it be­came in­creas­ingly dif­fi­cult be­cause of mar­ket ac­cess chal­lenges. New test­ing method­ol­ogy and health cer­tifi­cate specif­i­cally for Nor­we­gian salmon re­duced ex­port al­most to zero. As a con­se­quence our bud­get and ac­tiv­ity level were cut. I even be­came re­spon­si­ble for an­other coun­try, Swe­den; this would not have been pos­si­ble if ex­ports to China were still go­ing strong.” New Dawn

The sign­ing of the min­is­ters was timed to co­in­cide with a 140 mem­ber Nor­we­gian seafood del­e­ga­tion meet­ing with 300 Chi­nese del­e­gates in Bei­jing hosted by NSC. “One word can de­scribe it: Awe­some! It was one of the best events we have ever or­gan­ised and it was set up in only four weeks. This meant 12 or 13hour work days of all our em­ploy­ees and one ex­tra help dur­ing that time. Many com­pa­nies found new cus­tomers dur­ing

the event and in the up­com­ing months we will see the out­comes from the meet­ings. In Chi­nese cul­ture you first get to know the peo­ple and the com­pany be­fore you de­cide to get into busi­ness to­gether.

In the past years the fo­cus of Nor­we­gian com­pa­nies has shifted to other mar­kets. Most salmon ex­ports have given up on China. A con­tribut­ing fac­tor is also that global salmon prices are on an all-time high, so the prob­lems in China were pushed away. With the del­e­ga­tion

go­ing to China in De­cem­ber and now with the new pro­to­col they have wo­ken up. This was the magic doc­u­ment we needed for go­ing for­ward. Specif­i­cally, the min­is­ters agreed on which salmon species are al­lowed to be ex­ported to China and which test­ing method will be used.”

The sign­ing co­in­cided with the re­lease of the tar­get ex­port num­bers for 2025; a stag­ger­ing CNY 10 bil­lion. This is al­most five times the value of 2016, Mr Bjørgo ex­plains. “We ex­pect Nor­way to take 65% of the mar­ket share of salmon con­sump­tion in China. In 2013 we still ex­ported a few hun­dred tons, but by 2015 this was al­most zero. Now we have to re­claim some of that mar­ket, but we also ex­pect large growth of salmon con­sump­tion in the next 5 to 10 years. Ur­ban­i­sa­tion

Growth of the Chi­nese mid­dle class will con­trib­ute for the most part to this ex­pected growth in salmon con­sump­tion Mr Bjørgo pre­dicts. “More peo­ple move to ur­ban ar­eas and there they usu­ally make more money. This leads to a grow­ing mid­dle class liv­ing in ur­ban ar­eas in the next 5 to 10 years.”

China is ex­pected to have 212 mil­lion ur­ban dwellers by 2050 ac­cord­ing to the 2014 re­vi­sion of the re­port World Ur­ban­iza­tion Prospects by the Depart­ment of Eco­nomic and So­cial Af­fairs of the United Na­tions Sec­re­tariat. China had a ru­ral pop­u­la­tion of 635 mil­lion in 2014, the sec­ond largest ru­ral pop­u­la­tion in the world af­ter In­dia. This num­ber is ex­pected to de­cline with 300 mil­lion by 2050 to roughly half of their ru­ral pop­u­la­tion in 2014. This makes China a very in­ter­est­ing place for ex­port in the next decades.

“Salmon is typ­i­cally con­sumed in ur­ban ar­eas. It is too costly to ex­port salmon to ru­ral ar­eas.

Salmon is mainly eaten raw; 7580% in China is con­sumed in restau­rants, mainly Ja­panese restau­rants. Sashimi and sushi are the main dishes, so com­pe­ti­tion for salmon in China is not the cheaper fish that’s used in home cook­ing, but tuna and sweet shrimp.”

With the new agree­ment salmon ex­porters can once again fo­cus on the mas­sive Chi­nese pop­u­la­tion. For other Nor­we­gian seafood like cod and mack­erel there is no such agree­ment just yet. “The cod mar­ket is very dif­fer­ent to the salmon mar­ket. Cod and also mack­erel are mainly just pro­cessed in China and af­ter­wards head for the Euro­pean and Ja­panese mar­kets.

Com­pared to Chi­nese home grown fish or river fish, Nor­we­gian cod is high in nu­tri­tion, pro­duced in safe wa­ters, con­ve­nient to cook and de­li­cious in their lo­cal cui­sine. We did an ex­ten­sive re­search in 2014, which showed that cod fits very well in Chi­nese cui­sine and in Asian cui­sine in gen­eral. This makes it a highly in­ter­est­ing mar­ket.

We have worked on cod since 2014 and now it’s pick­ing up. Cod didn’t ex­ist as a prod­uct in the Chi­nese mar­ket when we started; it didn’t even have a Chi­nese name. We had to build ev­ery­thing up from scratch, but that’s worth it be­cause of the tremen­dous po­ten­tial. When I look back on my term I am most proud of what we have done on cod. Re­main­ing chal­lenges The chal­lenges faced for cod are not vet­eri­nar­ian chal­lenges like with salmon. For cod the prob­lems are fo­cused on the pro­duc­ers them­selves. We have 56 pro­duc­ers that would like to get ap­proved to ex­port cod to China, but they haven’t got­ten the nec­es­sary ap­proval yet.”

Other prod­ucts also still face re­stric­tions. “There are 28 new species that are not yet al­lowed to be ex­ported to China which we would love to do. And fish meal for an­i­mal con­sump­tion is also not ap­proved, so chal­lenges re­main.”

This could af­fect the ex­pected growth for ex­port to China also. “70 per­cent of the ex­pected growth will come from salmon con­sump­tion, but the other 30% has to come from other fish. In light of all these de­vel­op­ments NSC wanted some­one with ex­pe­ri­ence as Di­rec­tor China for the next year and I agree with them. This is a break­through mo­ment.

It has been a very spe­cial time with a lot of ups and down since I started as Di­rec­tor China. The mar­ket ac­cess dif­fi­cul­ties af­fected most of our work in China as Nor­we­gian Seafood Coun­sel. I never ex­pected to spend so much of my time on po­lit­i­cal mar­ket ac­cess as I did, . but now the op­por­tu­ni­ties in China are enor­mous”, Mr Bjørgo says while look­ing back on an in­ter­est­ing pe­riod.

In­vest in Nor­way is an in­vest­ment pro­mo­tion func­tion within In­no­va­tion Nor­way of the Nor­we­gian the gov­ern­ment.


Nor­mally the terms of Di­rec­tor China to the Nor­we­gian Seafood Coun­cil (NSC) are lim­ited to five years, but this time around ex­tra­or­di­nary cir­cum­stances call for ex­tra­or­di­nary mea­sures.

Above left: Nor­we­gian Seafood Coun­cil's Di­rec­tor of China Sig­mund Bjørgo held open­ing re­marks dur­ing the Nor­way-China Seafood Sum­mit in Bei­jing ear­lier this year, where he spoke to the largest Nor­we­gian seafood del­e­ga­tion abroad ever and 300 Chi­nese...

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