Aquaculture Investors Wait for Their Ship to Come In

The 2288-kilometer long Ayeyarwady (or Irrawaddy) River is Myanmar’s most important economic artery. The total watershed area of this single waterway accounts for more than 60% of Myanmar’s national territory. The highly fertile floodplains and the Ayeyarwady River Delta, which alone has an area of 32,400 square kilometers, are the grain basket of the country and also its most densely populated area.

The Ayeyarwady Region, located about 100 kilometers away from the largest city of Yangon and occupying about two thirds of the delta, is the crème de la crème. Not only is it a major producer of paddy rice and other grains, its lakes and rivers are home to rich fisheries resources. No wonder many aquaculture entrepreneurs have been attracted here. Among them, perhaps the most representative is Bioandaman Organic Seafood chairman Lin Mong-chung, who hails from Yilan County in Taiwan.

You can see grass huts and sampans throughout Myanmar, as many poor people meet almost all their daily needs directly from nature.

The company has already been around for 40 years, and is well known in the Yilan-Keelung belt. The company’s subsidiaries include several dried shrimp and fish powder processing plants, as well as freezer facilities, and it is a major shareholder in the renowned Sea Chicken brand.

Back in 2003, sensing that Taiwan’s fisheries resources were being squeezed dry, Lin, through an introduction from a friend, decided to turn his attention to Myanmar, attracted by its low crime, abundant water supplies, and year-round warm weather. Here he hoped to reproduce his earlier entrepreneurial successes. Equipped with a war chest of NT$150 million at a time when prices were still quite low, he bought 1225 hectares of land in the Ayeyarwady Region.

However, it proved to be no easy feat to construct an enormous aquaculture facility in a country like Myanmar, which lacked any heavy machinery. Fortunately for Lin, the country has never had a shortage of human muscle power, and he hired hundreds of temporary workers, organized in relay teams of two, and basketful by basketful they dug out a fish-raising facility larger than all of Luodong Township in Yilan County (the area of the township being about 1134 hectares).

Having overcome many difficulties to construct his fishponds, next came the main event: releasing the fish fry. Lin points out that although Myanmar has a long coastline, it is one of the few countries where ocean seafood is not widely consumed. Devout Buddhists, the Burmese go so far as to prefer frozen fish, which after all are already dead, rather than catching live fish and eating them fresh, which is thought to create bad karma.

The company quickly adapted to local customs, and opted for freshwater fish varieties known to be popular in overseas markets. Their main products included mud carp, silver carp, grass carp, mackerel, Mozambique tilapia, and black pacu, as well as the giant freshwater prawn, one of Myanmar’s special local products (albeit known in Taiwan as “Thai prawn”).

Purse-seine fishing is still the norm in Myanmar. This worker is using one hand to protect himself against being struck in the face by panicking fish.

It is rather disappointing, however, to discover that in Myanmar, where basic infrastructure is very primitive, there is little opportunity for firms to bring into play the high-tech and advanced aquaculture techniques for which Taiwan is famous.

For example, because Myanmar has an insufficient supply of electricity, it is simply impossible to employ the concentrated aquaculture techniques that are so widely seen in Taiwan, because these approaches, which allow greater production volume per area, rely on electrically powered machinery to oxygenate the water. For this reason, whereas in Taiwan about 500,000 fish fry are released for each hectare of ponds, only about 50,000 fry can be released in a comparable area in Myanmar, where the sole oxygen available is whatever happens to be in the water naturally. “So now you know why I need such an enormous facility!” says Lin with a sigh.

In addition, there is no specialist food-freezing industry in Myanmar. Freshly caught fish have to be transported using the most basic method: a truck packed with crushed ice. However, because the roads are in such poor condition, making transport slow, the risk of the fish simply rotting is greatly increased. And if your driver is unlucky enough to meet with a road accident or gets lost along the way, the whole truckload of seafood goes to waste!

Despite these rough edges, there are still unique advantages for the aquaculture industry here. Most importantly, freshwater fish growing to maturity in an environment that is very close to their natural one have better-quality and better-looking meat, with a texture by no means inferior to the “freshly caught seafood” so beloved by Taiwanese. Moreover, they don’t have that “muddy taste” that diners so often complain about with farmed freshwater fish.

Aiming to increase the value of this low-tech aquaculture, in 2006 Lin, proving to be a pioneer yet again, won “organic” certification in both Germany and Thailand, making it possible to export his products for 50% more than the price his competitors were getting. “The criteria for organic aquaculture certification are very strict. You have to exercise stringent control over the quality of the feed, and you are not permitted to use chemicals of any kind, and moreover the fish have to be killed in a humane manner. It just so happens, oddly enough, that these criteria are no problem at all in a place like Myanmar, where no-tech methods are the only ones available!” he says with a laugh, appreciating the irony of the situation.

Be that as it may, even the wiliest operators in the aquaculture business have been powerless to do anything about the currency fluctuations that have proven so devastating to export firms in Myanmar.

Originally Lin intended to export his product to markets in Europe and the Middle East, where freshwater fish is in relatively short supply. But the Myanmar currency, the kyat, began to appreciate in 2010, rising from 1300 to the US dollar to 800 against the dollar (at the time of writing, the rate is about 850:1). This 40% rise in the value of the kyat proved to be a serious blow to exporters. Many small and medium-sized enterprises, unable to cope with the currency fluctuations, went bankrupt. Even Bioandaman was forced to close about 1000 hectares of fishponds, keeping only one-sixth of its total aquaculture area in operation.

With the prospects for exports more or less extinguished, Bioandaman had little choice but to explore the domestic market, which offers only limited profits. Today, producing about 1000 metric tons of fish a year from just 225 hectares of fishponds, the company’s annual revenues are only about NT$50 million. Lin explains that in Myanmar, where there is no shortage of fisheries resources, there is a widespread belief that “the rich eat meat; fish is for the poor.” Naturally, it is difficult to get a very high price for any product when your main consumers are the people with the lowest incomes.

The bottom line is that Bioandaman has still not recouped its initial investment after nearly 10 years of operations in Myanmar. But when asked whether or not he regrets having invested here, Lin—now 65 years old and a man who has seen a great deal of life—laughs the question off: “If you’re a businessman, you can only take your best shot. Why waste time talking about regrets?”

Instead, he looks to the future. He is optimistic that Myanmar will continue to reform and open up to the outside world, and that economic conditions will take a turn for the better. “I believe that the country will eventually devalue its currency in order to promote exports. Moreover, as more and more foreign firms come here, inevitably someone will invest in the businesses of freezing, delivery, and processing of fish products, and at that point we expect our operating costs will fall sharply.” A grizzled veteran, Lin has lost none of his passion for aquaculture, and he is just waiting for the day when the situation improves to bring his thousand hectares of idle fishponds back into operation.

Lin Mong-chung, with his optimism, flexibility, and indomitable spirit, is a shining example of the many Taiwanese businesspeople who have traveled so far and struggled so hard to make their way in Myanmar.