Seabass production set to increase

Tolga Uruk, Marketing and Sales Coordinator CMO, Agromey

The Akel Group in Turkey is a major trader of agricultural products. Among the group companies is Agromey, a producer of seabass and seabream with its own feed manufacturing plant, on-growing sites for the fish, processing and packaging facilities, as well as sales and marketing divisions that trade the fish on markets within Turkey as well as around the world.

Today Agromey is one of the biggest exporters of seabass and seabream with markets in Europe, Asia, and North America. The company has major expansion plans says Tolga Uruk, the marketing and sales director, which will be realised with the help of a USD40m injection of new capital from the parent Akel Group that was agreed on at the end of 2016. Some of this funding will go into an expansion of production capacity to 18,000 tonnes of fish by 2017, and to 20,000 tonnes by 2018. While the company’s production capacity is already significant, actual production has been lower as markets have been subdued. Recently, however, says Mr Uruk, the export market has been increasing, more fish is being sold to western Europe, Russia, USA, and even the Middle East.

Emphasis on seabass

Agromey is predominantly a producer of seabass. However, a couple of years ago a massive storm in the Aegean caused the company to lose almost 2,000 tonnes of market-sized seabass, a disruption in output from which the company is slowly recovering. The planned increase in capacity will result in an increase in seabass production that will ultimately reach about 70% of the total in two years. Seabass is sold typically in the size range 400 to 600 g, a size the fish generally takes two years or more to achieve. In general, Agromey exports 80% of its production and these overseas markets determine the ratio of seabass and seabream that is produced. In the Netherlands, the company’s main market in Europe, there is a significant preference for seabass, which the company will be in a good position to accommodate with its increase in production. In Italy and Spain where the company also has markets, as well as in the US, it is seabass that is the most popular, while in the Middle East it is seabream. The Dutch market is an important one for Agromey, so much so that a subsidiary, Agromey Holland BV, was established a few years ago that is responsible for sales and invoicing. The fish, all of it fresh, is sent from Agromey’s packaging facilities in Aydin and in Izmir in Turkey directly to the customers in the Netherlands. In contrast to markets in other parts of Europe, where whole round fish is the norm, Agromey’s customers in the Netherlands are mainly interested in processed fish – fillets in different formats and gutted fish. Europe is the main destination for Agromey’s fish followed by the Middle East and the US, and then Russia.

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Production almost exclusively fresh fish

Agromey’s production is by and large fresh fish. Frozen constitutes perhaps 2 or 3 percent of the total production and is intended mainly for the domestic market. A fraction of this frozen production is exported through a Turkish customer, the only part of the frozen production that is exported. Agromey specialises in fresh whole round fish; the exception is fresh gutted fish and fillets bound for the Dutch market. For the moment, this will continue – the company does not plan to switch to greater value addition such as ready to cook or ready to eat products. As Mr Uruk explains, many of Agromey’s markets, in Italy, France, Russia, and the Middle East, prefer whole fish. In the US too the company’s distributors sell the fish to the Horeca sector, where whole fish is preferred. That said the company is keeping an eye on developments in the value-added products sector and will, if necessary, be able to switch rapidly to producing these should the demand arise.

Greater diversification of markets

Five years ago, 90% of exports went to Europe. Today that has fallen to 70% as Agromey together with the Aegean Exporters’ Associations has made a push into other markets. The target is to reach a split of 50:50. This is to reduce the exposure to any one market, but it has been made more urgent with the currency fluctuations that have made the US dollar more expensive against the euro. Agromey purchases raw materials in dollars yet sells the final product in euros and is suffering from the shift in the relative value of these currencies. One of the main costs is the raw material that the company needs to produce feed. Agromey is self-sufficient in feed production, but needs to import the raw material, mainly fishmeal and fish oil, that is used to produce the feed. Over the years developments in feed production have enabled fishmeal to be substituted with other products. Ten years ago, says Mr Uruk, Agromey’s fish feed had a component of fishmeal that was 40-50%, today that has shrunk to 30% yet at the same time the feed conversion ratio has improved.

With the infusion of fresh capital Agromey is well positioned to boost production and penetrate deeper into existing markets, yet at the same time exploit new and as yet relatively unexplored markets such as in the Far East.