Changing labor situation in China increasing demand for seafood processing equipment

Demand for labor-saving machines remains strong among Chinese seafood processors, according to Wang Yunfeng, the CEO and founder of Shanghai AUS Food Technology Co., which imports fish processing machines from Europe to China. 

During the COVID-19 pandemic, Wang’s firm has received more inquiries as factories began to see the potential of machines in avoiding disruption from pandemic contagion.

In an interview with SeafoodSource, Wang discussed how changing labor conditions are affecting the market for seafood processing equipment in China.

SeafoodSource: What kind of machines do your Chinese clients want, and for what purpose are they using them?

Wang: Machines [that] can save labor costs. We also have machines for quality improvement, but they are not as popular as the labor-saving machines. And the clients have priorities: the more labor it can save, the more popular the machine is. Of course, cost is also very important to them.

SeafoodSource: Can you describe a few machines that are currently in demand?

Wang: A nobbing machine for pelagic fish in the canning industry is the first machine we introduced to the Chinese market. It saves a lot of labor. Our Chinese clients used to complain about the yield, but they are starting to realize that the machine yield is getting more and more close to the yield of manual workers. They can no longer find capable workers as easily as before. Young people are not coming to this industry anymore. 

Also [popular is] a skinning machine for cod, white fish, flounder, and so on. It is a simple machine with an affordable price. It saves a few workers and performs much better than manual work. [And] there is a thawing machine for multiple types of fish. It is quite expensive but significantly improves the thawing quality, increasing the yield during all subsequent processing steps. This type of machine is quite difficult to promote. By my observations, most of the Chinese processors still survive on very little processing profit. Yield is super-important since it is their profit. And the machine cost is also important because the last few years, it [has been] very tough for the whole industry, and many factories dare not invest for the long run. 

SeafoodSource: Are your clients typically Chinese companies processing cod or tilapia for export or do they also process different kinds of seafood for the Chinese market?

Wang: It depends. Most of the big processing factories are for the export market, not only cod and tilapia, but also many different types of fish – for example, pelagic canned fish for Europe, white fish for the Russian market, and flounder for the Japanese market. Traditional Chinese prefer to buy fresh seafood from the market. Of course, this situation is changing. Young people like more processed products, or at least half-processed fish. We have some popular readymade fish products such as fried dace in a can, or canned or packaged fried yellow croaker snacks.  There are also products for both the domestic market and the export market, such as canned tuna fish. Young people love it. 

In my experience, the factories catering to the export market are more open to machines, because they see and visit Western factories aboard. It is easy for them to understand the importance of having a machine, for standardized production. The factories only for the domestic market are much slower to make decisions. And I have to admit, our machines imported from abroad have also more improvements to make in order to fit the special needs [of local clients]. We are trying to co-research or co-redesign some machines for dace processing but have failed to get enough support from the Chinese side. 

And processed fish products for the domestic market are getting popular, it is a trend. So I think in the future, we will put more machines in such factories. 

SeafoodSource: Is it possible to find the machines your clients need in China?

Wang: We do have many Chinese competitors who can make processing machines, but their technical level falls far behind from what we already have today in Western countries. For some simple machines, it is not a big problem. But for complicated machines, it is not easy. Sometimes our machine can replace a few Chinese machines that do the same thing. For example, our nobbing machine can do feeding, head-cutting, nobbing, and belly cleaning with one machine, but for Chinese machines, it is manual feeding, then the head-cutting machine, then manual belly cleaning. And the head-cutting is not as precise as our machine. It is also an issue of time. The nobbing machine is quite new in the market.

There are machines that are made in China and that function well, such as the autoclave. It became available in the Chinese market many years ago and the Chinese have enough experience to make good and cheap ones. But they are still not [as] excellent as the best ones in the world, of course. “New” machines still need to be imported so the Chinese will have something to copy. We have machines being copied all the time. 

In China, there are so many different factories, from small workshops to giant processors. The bigger the company is, the more export the company does, the greater the possibility they invest in a good machine and use it for many years. These are our target clients.

SeafoodSource: Are the machines made by Western equipment specialists like Marel too expensive for lots of Chinese processors if their profit margins are really tight, or does the machine give enough savings in labor and efficiency to justify the high price?

Wang: Imported machines like those built by Marel are definitely expensive. But there will always be clients who can afford them. The factories have to take many factors into consideration – price is just one of them. The other considerations are processing quality, efficiency, safety, and so on. 

SeafoodSource: Has the COVID pandemic affected the marketplace?

Wang: Processors [have] start[ed] to think how a machine does not spread virus and with less people in the processing unit [there is] less risk to spread the virus. So besides labor-saving, we have one stronger selling point.

SeafoodSource: Is it easy for the Chinese processing companies to get loans or finance to pay for the machines, given it is a very low-margin, competitive industry?

Wang: For the finance, as far as I know, it is very difficult. There are too many players in this industry and our government has the intention to eliminate some due to overproduction, overfishing, and pollution [issues]. The whole industry has suffered a lot during the last a few years and now the [China-U.S.] trade war and COVID-19 … All these happenings are accelerating the trend to use more machines, since we need to save energy and water, save salaries, and make more standardized products for safety concerns and standardized packaging. I hope we all survive now and develop in a green way in the future. 

Photo courtesy of Wang Yunfeng