New Zealand King Salmon has stopped selling into the Chinese market, chief executive Grant Rosewarne says.
The company has pulled out of the Chinese market at a time when many other companies were moving into China because it could not supply enough salmon to meet future demand, Mr Rosewarne said.
Rather than "just limp along" in the market, King Salmon had decided to "pull the plug". Its last order went in last week, TheMarlboroughExpress reports.
China was the sort of market where you get good prices, he said, but there were very high costs going in as well. "You need to have critical mass, volume going in, to make it worthwhile," Mr Rosewarne continued.
King Salmon went into China anticipating it would have nine new farms in the Marlborough Sounds and be able to sell 5000 tonnes, earning between $80 million and $90m of revenue a year. But it got approval for only three new farms.
"We have no prospect of sending meaningful volumes. With three [new] farms we can only serve growth in the existing markets," Mr Rosewarne explained.
"It's a lost opportunity. We're disappointed for our customers, we were in high premium outlets, mainly food service," he continued.
The company had been selling about 50 tonnes a year in China. It had been getting the business to the point where contracts were being put in place and growth to take up the potential 5000 tonnes from the proposed nine farms looked likely.
Mr Rosewarne said supplementing New Zealand-grown product with that from farms elsewhere was a possibility, but King Salmon was reluctant to do that.
"We are very much a New Zealand-based business here. Ninety per cent of our people are in the top of the South Island. We are very reluctant to set up elsewhere, but we may have to do that because of the [lack of] growth prospects in New Zealand."
