After years of challenges, Norwegian salmon is finally conquering the Chinese market.
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 guests from the seafood industry. Above: Over the past years the Norwegian Seafood Council has painted the urban landscape in Hong Kong with Norwegian salmon. They are preparing a new round for September this year. PHOTO: NORWEGIAN SEAFOOD COUNCIL