The Sars scare and the economic impact of the Iraq war hit overseas sales of UAE processor Gulf Seafood LLC for some time, but recovery in the year’s second half has brought a wave of optimism to the company.

Sales generated in 2002 were Dh30 million ($8.16 million), against Dh28 million over the previous year.  If the upward trend continues in the final weeks of 2003, which managing director K Sethuraman believes it will, the company could still see growth of about five per cent. “It would have been better had it not been for Sars and the war,” said the official.

Sixty-five per cent of the production is exported, with North America accounting for 70 per cent of the overseas sales. The next big markets are Australia, New Zealand and South Korea.  The company’s fresh chilled products have made inroads in the European market. Gulf Seafood’s production in 2002 was about 2,000 tonnes, up 10 per cent over the previous year.

The company’s strategy is to spread out its wings both within the Gulf and in other regions, no matter how remote. With China and Vietnam emerging as powerhouses in fish processing and extending their reach to the more profitable markets of the West, fisheries companies in the developing markets sometimes have no alternative but to exploit opportunities nearer home where a better knowledge of the markets and stronger cultural ties may see them through.

China and Vietnam have invested in major aquaculture projects and benefited from cheap and plentiful labour from amongst their own nationals. Their presence in international markets has put considerable pressure on prices, says Sethuraman, who is also a partner in Gulf Seafood. The main partner in the company is UAE national Saeed Matar bin Belaila.

“To offset the Eastern processors’ advance, many players are working on the regional markets,” Sethuraman commented. His company made progress towards that end when it penetrated the Saudi and Kuwaiti markets recently.   If its agents prove reliable and hardworking in the two states, Gulf Seafood can expect to dig in and entrench itself. There is the added advantage of a common duty for imports.

Regional companies are also looking into their own national markets, certain there will be a growth in demand year on year, because of the health benefits that seafood bestows and a growing taste among consumers for fish dishes.

“In Dubai, seafood consumption is growing 15 to 20 per cent annually. Taking Dubai as the model, we expect similar growth in other GCC states,” says Sethuraman. In the context of tough competition from the established eastern players, that level of growth in domestic demand is surely good news for regional producers.

The expectation that the surge in consumption experienced in Dubai will be more or less replicated in other Gulf regions has encouraged Gulf Seafood to expand its Jebel Ali Free Zone processing facilities by 25 per cent. By the beginning of 2004, the company will be in a stronger position to meet demand from no matter which region it comes. It has targeted a 20 per cent growth in the turnover in 2004. The company has no plans to invest in aquaculture, an initiative that has been taken up with considerable success by fellow UAE company Asmak 
Gulf Seafood’s range includes cooked and ready-to-eat salad shrimp, freeze-dried shrimp and frozen and chilled fish.

The cooked, ready-to-eat shrimp is packed in customers’ brand names and transported mainly to the US, Canada, Australia, New Zealand, South Africa. The US brands under which Gulf Seafood products are packed include Sysco, ConAgra Seafood, Gordon Seafood Service, Red Chamber Corporation, Central Seaways, Expack Food Inc, Suram Trading and Nissin Foods.

Consignments of cooked frozen seafood are shipped to the UAE and other GCC states, a portion of which is destined for hotels and catering institutions.  Fresh, chilled items are airshipped to European destinations.
Freeze dried shrimps are shipped to eastern Asia for the instant food industry, particularly noodle plants.  
Shrimps constitute nearly 80 per cent of Gulf Seafood’s output, with grouper and Spanish mackerel coming next in importance. The company procures its requirements mainly from the Dubai auction, but some supplies also come from private parties in Ras Al Khaimah.

An important factor in Gulf Seafood’s success is its adherence to international standards for quality control systems. Many Gulf and South Asian processors have fallen by the wayside because of rejections on grounds of poor quality production or packaging.  Gulf Seafood is registered with the US Food and Drug Administration (FDA) and approved by European authorities for shipments. “We follow US guidelines and we have an in-house laboratory for carrying out microbiological tests using FDA-approved analytical methods,” says Sethurman.

The manufacturing facility is audited by AIB International Kansas, USA, which granted it the “superior” rating in the 2002 and 2003 audits.
Gulf Seafood received the 2002 Dubai Quality Award for manufacturing. The citation said it was honoured  “for applying and meeting criteria prescribed in the Dubai Quality Award model of excellence and also for adopting a culture of continuous improvement.”