Bali Seafood International finally opens processing plant in Indonesia

After a long delay, PT Bali Seafood International (BSI) opened its new fish processing plant in Santong, Sumbawa, Indonesia on 22 February.

BSI is a wholly-owned Indonesian subsidiary of North Atlantic, Inc. (NIA), a Portland, Maine-based supplier focused on sustainably sourced and socially responsible seafood. NAI was started by Jerry Knecht, who also heads the Bali office. The subsidiary was established in 2009 to source Indonesian tuna and other fish for the U.S. market. 

Sumbawa, an island in the province of West Nusa Tenggara, lies roughly between Bali and Timor. The island surrounds Saleh Bay, which will be the source of fish for the plant. About 26,000 metric tons (MT) of fish are landed in the waters around Sumbawa Island annually, including snapper and grouper, which together reach 7,000 MT a year – about 1,400 MT of which is caught specifically in the Gulf of Saleh. There are about 3,800 fishermen working the bay.

Following a lengthy permitting procedure, the plant was scheduled to open at the end of March 2017, but the date was pushed back due to delays in getting utility connections. Knecht told SeafoodSource at the time, “The plant, when operational, will supply ice to artisanal fishing vessels, and by processing locally will eliminate the current quality losses during transport to distant processing locations via multiple middlemen.” 

An Indonesian online news source, Tempo.co, reported that without the plant, local fishermen sold their catch to 18 local brokers, who then sold on to other dealers who carried the fish to Lombok, Bali, and Java islands. The local fishermen often had to wait until fish were sold by the brokers to get paid, Knecht said, and transport losses were high due to poor cold-chain. In addition, fishermen did not get paid more for higher-graded fish, so that they did not have an incentive to improve handling techniques.

The plant, which required an investment of around IDR 30 billion (USD 2.16 million, EUR 1.77 million), has a production capacity of 10 MT per day. It is scheduled begin exporting fillets and fishsticks in March 2018. BSI employs 70 locals, and has a cold-storage capable capacity of 200 MT.

In line with its sustainable and socially responsible philosophy, BSI’s plans go beyond the mere business side of seafood processing, Knecht  said. He has also proposed establishment of a “TURF-Reserve” system. TURF stands for Territorial Use Rights for Fishing. Under the system, an area of water running alongshore for 60 kilometers and extending 12 kilometers out to sea will be designated for the use of vessels licensed and based in ports in the area. A further “reserve” area would extend seaward as a sanctuary for conservation

The TURF system differs from “catch shares” or “individual transferrable quotas” in that it regulates effort (number of vessels, tonnage, and gear), rather than total allowable catch. Following BSI’s successful partnership with Pelagic Data Systems, the company plans on continuing to use PDS’ low-cost, solar-powered, passive vessel-tracking system to ensure compliance with the TURF-Reserve system. 

“[We] have in place with the government an agreement outlining enabling conditions for fisheries management (e.g. input/output controls). The difference is the government expects/allows us to manage or create the institutions necessary to drive controls,” Knecht said. “Our agreement is we provide full transparency to government and allow input. All other NGO programs rely on the government to manage and build supporting institutions for fisheries management, when it is abundantly clear that there is no rule of law for enforcement and the government has neither the capacity nor will to build or manage institutions needed to support fisheries management.”

Knecht has proposed that some of the increased profits from better grading and cold-chain, as well as improved access to international markets, would come back to a nonprofit organization co-owned by BSI and local vessel-license holders. This organization, Sumbawa Fishing Management Company (SFMC), would provide micro-lending, education on such topics as best practices, finance and health, and encourage use of improved fishing gear.

Before the plant opening, BSI was already active in the country, buying about 40 MT per month of mixed species, which it forwarded to other companies for processing.