Investments in Mauritania to secure fishmeal and fish oil supplies

Dr Hayri Deniz, projects and foreign investments manager in Kilic Holding

Kiliç Seafood is Turkey’s biggest producer of farmed fish, cultivating seabream, seabass, meagre, and trout with a total annual production capacity of approximately 40,000 tonnes. The company is fully integrated with hatcheries, feed production, processing, sales, marketing and distribution. Its products are exported to 44 countries around the world making it Turkey’s leading exporter in this sector.

The environmental law in Turkey that went into effect some years ago requires fish farming cages to be at least 1,000 m from the shore. While at the time it shook up the industry due to the higher costs it would impose, producers have since discovered that there are also advantages. Hayri Deniz, who moved to Kiliç Seafood as projects and foreign investment manager after many years in the Turkish government, says that the result of the legislation has been overwhelmingly positive. The fish are grown out at sea in water not exposed to nutrients from land, currents keep the fish in good health, and conflicts with other users are avoided.

Dedicated aquaculture zones offer stability to industry

In addition the experience and expertise that comes with operating and managing offshore cages is useful knowhow that can be sold to other countries. In the Middle East, for example, there is a lot of interest in marine aquaculture, governments are making funds available and countries are asking us to establish cage farms for them, says Dr Deniz. Turkey has now established zones that are exclusively intended for the aquaculture industry giving a degree of stability to investors. The areas were identified and agreements were signed by all the stakeholders dedicating these zones to fish farming purposes. This kind of certainty is good for the industry encouraging investment and promoting growth

Seabass, seabream, trout and meagre are the main species produced by Kiliç Seafood and they are sold to markets in the EU and the US among other countries. While the company plans its production based on forecast demand often there may be a discrepancy between the forecast and the actual situation. However, because the markets have different specifications for the fish it is possible to adapt. Thus, if demand on European markets falls short, the fish are left to grow in the cages and are then sold in the US, where there is a preference for larger fish. Most important is the ability to supply at all times, which the company can do without trouble. As Dr Deniz says not only can the company supply fish at all times, but it can also supply it in the desired specifications, whether whole round, gutted, fresh, frozen, on ice, in MAP, canned, smoked, or as ready meals. Everything is possible, he says.

Ready meals are here to stay

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Producing ready meals is one of the newest developments in Kiliç Seafood. Ready meals in general are highly popularity in the west, and their consumption is increasing in Turkey too. The reasons are not hard to find; higher living standards, greater urbanisation, increasing single person households, greater numbers of women in the workforce, and the lack of time to prepare meals. The recent economic crisis has also played a role as consumers switch from spending in restaurants to spending on ready meals instead. Most of these trends are here to stay and ready meals offer a quick and convenient alternative to shopping and cooking. However, many ready meals have been found to be nutritionally lagging international recommendations and are also implicated in the obesity that is plaguing many societies. Companies, including Kiliç, sense an opportunity here for healthy ready meals that are based on fish. Kiliç has therefore invested in a processing factory for this type of product that has a capacity of 40,000 frozen portions a day. These portions are housed in a package which can then be put in the oven for 20 minutes to give a complete meal. The products have been on sale for a year in Turkey, where they are being sold in supermarket chains like Migros and Carrefour, but the plan is to start exporting them as well and negotiations are ongoing with customers in Italy as well as in Ukraine and Kazakhstan.

Microwaves, conventional ovens or plain boiling water

Within Turkey, the response to the ready meals has been positive. Although initially sold only through Migros, distribution was extended to Carrefour after the retailer showed an interest and made some suggestions regarding the composition of the meal. Volumes produced are still modest however, the factory is operating more or less on demand; when customers place an order the meals are made and supplied. Building up the volumes will take time. In Turkey in particular it will call for a concerted effort in promotion and customer awareness programmes to familiarise people with the product and to persuade them of its advantages. Another issue preventing the rapid uptake of the product may be the price. At TRY45 (EUR13) per kilo these meals are mostly for the up-market consumer segment, who may prefer to invest in a steak instead. The products are made using fillets of seabass or seabream that is combined with a sauce and some vegetables. The vegetables and the sauce are precooked and then frozen, but the fish is completely raw and only gets cooked when the meal is put in the oven. All the ingredients, the fish, vegetables, and the sauce, are added to a tray suitable both for microwave and conventional ovens, which goes through a metal detector before being vacuum sealed and sent to the freezer. After being frozen the trays are stored in a chamber maintained at minus forty degrees, where they await shipment. The recipes are generally developed in-house, but the company also implements suggestions from outside. Being frozen products they do not need any artificial ingredients to increase shelf life, but can be marketed as completely natural.

The fish raw material can be either fresh or frozen. Frozen fish that is used in the preparation is already in the form of fillets and is added to the tray without first being defrosted at any point during the production. This maintains the quality and safety of the product, which is only thawed just before consumption, when it is in the customer’s oven. Some of the products are not put in the oven, but are prepared for consumption by immersing the tray in boiling water. These are typically products in which the sauce includes small pieces of vegetables or other ingredients that need a little longer to cook. The factory has a well equipped kitchen where ingredients such as the sauces and the vegetables are prepared and where new recipes can be tested. An on-site laboratory is used to monitor the raw material and test for pathogens such as salmonella in the finished products. External monitoring is carried out by another laboratory that comes and takes samples every three months to make sure that the products conf
orm to the requisite national and international standards. Further checks are carried out by the ministry twice a year.

US, Albania attractive destinations for investments

Kiliç Seafood is branching into new products in response to changing social trends giving it a stronger presence on the domestic market, but for the last few years it has also been pursuing a more aggressive overseas strategy. It is looking with interest at Albania, Morocco, and exploring possibilities in the United States. Most recently, in Mauritania the company has just bought a fishmeal and fish oil producing company. This will secure the supplies of fishmeal and fish oil the company needs for its own 120,000 tonne production of fish feed from its two fish feed plants. Being fully vertically integrated has several advantages, says Dr Deniz. Now we produce our own fingerlings, fish feed, raw materials for the fish feed, fish, and the final products that we sell ourselves. We even make our own EPS boxes, marine cages, and feed barges. The advantage is in the prices. Buying from within the group is cheaper than buying from outside particularly because we are so big that the unit costs of what we produce are the same or even lower than what they are for a dedicated manufacturer of these products. There are very few Turkish aquaculture companies that are integrated to this degree.

Multiple certifications – a necessary evil

The farming and processing facilities are all certified to the necessary standards, including, Global G.A.P. and ISO, and different quality schemes. Negotiations are currently ongoing to have the farms certified to the Global Aquaculture Alliance standard, which will be useful on the US market. Most recently, Kilic Seafood has started producing organic seabass and seabream as well and will have the first harvest of these fish later this year. Like many producers however Kilic too is tired of the plethora of standards and labels that it needs to have to keep its customers happy. One label is a good idea, says Dr Deniz, but having to certify production to several standards is expensive and time consuming. There is no resolution to this problem in sight, in fact, if anything it is getting worse, as more standards are introduced. For example, a recent scheme initiated by some countries will certify fish to halal standards. The industry needs to work together with the retail sector, NGOs, and the bodies developing standards to find a solution that is palatable to all.