How a Fish Fillet Processing Plant Transformed Itself for Export Certification to Achieve Long-Term Operation

Taiwan's aquaculture technology is renowned worldwide, but with a limited domestic market, many fish farmers are setting their sights overseas. However, marketing goods abroad tests more than just production volume and quality control capabilities. To win orders, international certification is also a challenge as an entry ticket. A well-known Taiwan tilapia fillet processor and fish farmers have long-term contract farming arrangements, improving the processing plant environment and equipment to secure export orders. The operator said, "If we don't do this now, it will be a serious blow to the cooperative's long-term operation."

Contract Farming Stabilizes Supply Volume Fish Fillet Processing Plant Transformation Is Not Easy

"When we first started negotiating contract farming with fishermen, some fish traders would tell fishermen that if they supplied to the processing plant, they would get paid very late, and it would take a long time to harvest a whole pond of fish." said Wang Yi-feng, General Manager of the Kouhu Fishery Production Cooperative. In the past, the fresh fish trading model was that farmers sold to fish traders, who then sold to processing plants. A few years ago, in order to stabilize his procurement sources and prices, he wanted to break this trading model, but unexpectedly ran into these rumors, and some farmers would even "jump ship" as prices fluctuated. Later, he adjusted the purchase price upward to slightly below market price, guaranteed procurement and long-term cooperation, and visited farmers one by one, only then achieving the current scale of 1,000 hectares of contract farming. "Even when the market price is bad, we still maintain the contract farming price, because the channel price is stable. Only through contract farming can the company operate sustainably."

Chen Chun-ju, Director-General of the Fisheries Research Institute, believes that because Taiwan is small in area and densely populated, with limited industry scale, if it wants to take orders and pursue an export route, it will encounter problems of scale and cost. Contract farming is a feasible approach, but the risk of contract farming lies in how the cooperative maintains cooperative relationships with contract farmers when prices are high. Currently, the administrative authorities do not have guidance measures for this part, but academia and the public sector can help cultivate fry of specifications suitable for processing with high fillet yield, allowing processors to reduce the time spent handling fish of different specifications and also stabilize product quality.

Biting the Bullet on International Certification Making Business Operations Last Longer

Overseas consumers are becoming increasingly meticulous about food requirements, from drug safety, ecological circular aquaculture to humane management. Expanding into markets will inevitably encounter management requirements. Wang Yi-feng said that 8 years ago, his father received a large order from an American company, and the manufacturer required inspection of foreign worker dormitories. "Foreign worker dormitories also need to be inspected? What is there to inspect?" His father disapproved, and at the time no processing plant in Taiwan had such experience. Wang Yi-feng fell out with his father over this, believing that if they did not do it now, it would be a serious blow to the cooperative's long-term operation. In order to meet the manufacturer's requirements, the cooperative had to handle everything from foreign migrant worker dormitories and salary adjustments to improving the processing plant environment. They even needed a "counter-terrorism protocol" to enter the processing plant, and only passed smoothly after applying 3 times. However, because they did it at the time, the orders could continue to this day.

Now the cooperative also needs to establish aquaculture ponds that meet Best Aquaculture Practice (BAP) certification in order to secure foreign orders. "The United States is the largest market for Taiwan tilapia fillets. Through this certification, we can raise the price of Taiwan tilapia fillets, not just selling at 3 US dollars, but selling at 6 or 7." Wang Yi-feng said. Recently, amid the US-China trade war, many Chinese fillet factories dare not produce rashly for fear of unsold inventory. The cooperative has received many calls inquiring about fillet supply, but because it lacks the BAP entry ticket, it cannot sell a single fillet. Therefore, to operate a business sustainably, certification is an effort that must be done.