China launches USD 1b seafood logistics zone

Importing seafood into China is set to get easier with the construction of several large logistics p…

Importing seafood into China is set to get easier with the construction of several large logistics projects focused on the sector, offering improved port handling and cold chain logistics facilities for seafood distributors.

Construction recently commenced on the latest such venture, the Qingdao Aquatic Trade and Logistic Center Project. Set to cost CNY 10.17 billion (USD 1.66 billion, EUR 1.25 billion), the 400 hectare site aims to be the most important international aquatic trade center in northeast Asia. The center aims to handle three million tons of seafood annually, worth CNY 54 billion (USD 8.8 billion, EUR 6.64 billion). The largest city in southeasterly Shandong province, Qingdao is China’s leading seafood import and processing hub.

The project is set to be complete in early 2014. In addition to an international seafood trade center, the project will incorporate a dock, a seafood processing base and an equipment center for fishing trawlers. There’s also a leisure zone planned.

China’s current five-year plan for its fishing industry stresses the need for improved cold chain logistics capacity to facilitate sales. Qingdao officials stress they’re following China’s national plan to develop the “ocean economy.” A string of (admittedly vague) policy blueprints from Beijing over the past year have stressed the expansion of ocean-related enterprises such as fisheries and energy exploration, seen by some as a means of strengthening control of regional seas.

Logistics capacity is needed as seafood prices and consumption both continue to rise in China. Prices for seafood will rise 10 percent in 2013, according to a recent research note by Qilu Securities in Shanghai, which credited pork, poultry scandals for increased consumer demand for fish. The broader outlook for increased consumption among the middle classes looks set to drive seafood consumption and imports in the coming decade. A recent report by the China office of consultancy McKinsey predicts that 75 percent of China’s urban population will have reached middle class status, in purchasing power terms, by 2022.

Meanwhile, finance for the Qingdao project is coming from the China Development Bank (CDB) and China Minsheng Bank. One of China’s policy banks, the CDB is known for financing infrastructure projects in China and overseas with low-interest loans.

In Dalian meanwhile, shellfish specialist Zhangzidao plans to have finished the main structure of its highly-anticipated seafood logistics park by mid-August. The company has said it will put the 60,000 square meters park — which includes cold storage capacity of 50,000 tons and annual handling capacity of 20,000 tons, into operation by November. “It’s being built to very high international engineering standards,” said a company source.