Identified early on as a potentially lucrative source of revenue, aquaculture has taken centre stage in the reengineering of Brunei Darussalam’s fisheries industry. With a shift away from capture fisheries amidst growing restrictions on trawlers, fish and shrimp revenues are expected to reach BN$200m ($156m) by 2023, over half the fisheries industry’s total projected value.
While Brunei Darussalam has 102.4 ha of fish cage and freshwater culture sites, it is the shrimp industry that will be the Sultanate’s true engine of growth. With 230 ha already on-stream, an additional 200 ha in the Telisai Phase II site is billed for November 2012. In addition, the adjacent 40-ha Eco-Aquaculture Park (TEAP) in Brunei Darussalam’s designated district hub, Tutong, and funded as part of the National Development Plan 2007-12, is now spearheading national goals to become a centre for aquaculture technology in Asia, accommodating high-tech covered facilities. Realising these national ambitions and potential, however, will require an overhaul of the aquaculture industry.
DISEASE BURDENS: The shrimp industry has remained a predominantly cottage industry affair since commercial production first emerged in 1993. Sufficient for local demand and standards, typified by production facilities without standardisation, little had been done to address inherent industry shortfalls until government and private sector intervention in the past decade sought to capitalise on higher yields.
While production numbers had been in decline over the past five years as the Sultanate’s earth-lined ponds were taken offline, overhauled and replaced with modern ponds, direct intervention came to a head with the outbreak of White Spot Syndrome Virus (WSSV) in 2010, which decimated the industry. From a high of 83 metric tonnes (mt) in 2007, no production of black tiger prawn was recorded in 2011 and Mexican blue rostris prawn suffered a 43% year-on-year (y-o-y) drop to 157 mt, equivalent to BN$1.18m ($919,000).
Having established the Aquatic Animal Health and Services Centre (AAHSC) back in 2007, including a fish inspection and quality control laboratory to detect a series of aquatic diseases, the government responded by expanding controls. During the outbreak of the white spot syndrome virus, the government was required to destroy all cultured shrimp and disinfect all ponds, which led to production stoppage for a number of months. Providing a modicum of protection to its emergent industry, more significantly, these measures drove market demand to local producers.
Focused on the culture of high-value fish and shrimp stock, the TEAP is host to an Ecological Recirculating Aquaculture System, designed to raise large quantities of stock in relatively small volumes of water and reduce disease risks. With a 40-ha site for a covered recirculating aquaculture system, this has provided Brunei Darussalam with a quarantined environment for hatchlings and fry, as well as with research and development (R&D) facilities. This has also benefitted the Sultanate’s pursuit of more sustainable and organic production practices and niche markets, helping it to capitalise on its already strong environmental record globally.
UPSTREAM UPGRADES: As host to the aquaculture research and development centre, the TEAP has given rise to several recent commercial successes, notably disease-free black tiger prawn, developed over five years with US firm Integrated Aquaculture International (IAI). The project delivered specific-pathogen-free (SPF) shrimp to the Department of Fisheries (DoF) in 2012, in addition to genetically improved, high-performing feeds, and sustainable farming systems and methods that produce shrimp for premium markets.
Having attained commercialisation, the DoF was preparing to welcome 140 international investors in November 2012, including from the UK, China, Taiwan, India and Madagascar, to tour the 9-ha plant that will breed the prawn for export.
In an extension project, IAI is also involved in the further development of Mexican blue rostris shrimp ( locally known as “rostris shrimp”), which has proven to be adaptable to the Sultanate’s local aquatic environment.
COLLABORATIONS: Looking to the future, the government is in a position to welcome further collaborations as an integral part of the industry’s strategic development, Abdul Halidi Salleh, the acting director of fisheries, told OBG. “The department is also looking into opening new areas for fish hatcheries to be built and operated by interested private companies,” Abdul Halidi said. “This is because the department and the government-linked company can only produce a very limited variety of species to be cultured. These new hatcheries would be able to culture the species that are not produced by the existing hatcheries.”
PRODUCING RESULTS: The long-term impact of this facility is expected to be dramatic. “The opening of the new aquaculture park will undoubtedly re-engineer and redefine the Sultanate’s aquaculture industry, which to date has been typified by small, localised production facilities,” Richard Chuang, managing director at Golden Corp, and general manager at Semaun Marine Resources Sdn Bhd, told OBG. However, the Sultanate has yet to overcome several upstream volume issues.
“The critical bottleneck in tapping Brunei Darussalam’s aquaculture potential is supply, which currently averages just 50 metric tonnes per month in the case of shrimp. This means that we are currently operating at just 40% capacity,” Chuang said. “However, we are now working with local prawn farms to standardise their processes using our protocols to ensure a consistent and stable supply. This should enable us to not only grow 300% over the next five years to produce 200 mt per month, but also improve the quality of local production — a key market requirement.”
A 60: 40 joint venture with the government’s investment and trading arm for economic diversification, Semaun Holdings (SH), Golden Corp. is spearheading the downstream processed seafood sector, operating a 4-ha BN$30m modern processing plant that opened in 2010. With the support of SH, Golden Corp. is working to incorporate about 70% of local producers as upstream providers, requiring them to work to ensure quality and timely delivery of stock.
Hopes are that the Sultanate will be able to produce at least 1500 mt once Telisai’s Phase II swings into full operation, doubling existing capacity. Yet potential production of 1200 mt is already possible in existing sites if the government can roll out its commercialised SPF black tiger shrimp, capable of 2.5 croppings per year, Faizal Md Ya’akub, deputy managing director of SH, told OBG. The DoF is supportive, and prepared to issue more private sector hatchery licences to complement the two existing facilities (including Seiwa Corporation’s facility, which provided 12.1m fries to farmers in 2010), Abdul Halidi told OBG.
However, the process of attracting investors to less established, primary-based industries has been relatively slow. As the financial backer of MIPR outreach since 1994, providing financial support to local and foreign firms, less than 10% of SH’s BN$500m ($389.4m) authorised capital is currently being used. However, foreign demand is evidently set to shape the industry’s future, and with excess capacity Golden Corp. is now looking to neighbouring Labuan’s fisheries in order to increase its production – and hopefully its profits.
DEMANDING EXPORTS: Falling outside of existing multilateral trade agreements, notably ASEAN+3, the Brunei Indonesia Malaysia Philippines–East Asian Growth Area and the Trans-Pacific Partnership, export demand is instead being led by Brunei Darussalam’s principal fisheries industry investors – China, Hong Kong, Taiwan, Korea and Japan. While this has been concentrated in the fish culture, indicators are that with increased production, shrimp culture will follow.
“Brunei Darussalam does not face many issues in gaining market access in Korea, Japan and China, but we are only constrained by our own production capacities,” Faizal told OBG. “We need to fully utilise the 230 ha of ponds in the country using various technologies to increase our national yields.” To this end, further foreign partnerships are being pursued through investment seminars and regional road shows. “As much as possible we want to produce sashimi-grade prawns, which the Korean and Japanese markets have asked us to produce for them,” Faizal said, reporting growing links with the food processing arms of Korean firms Samsung and LG. Having attained organic certification from both China and the EU, 80% of Golden Corp.’s product is currently under export and it is now moving into value-added production with a BN$7m ($5.5m) investment in cannery operations, which are set to begin in 2013.
Demonstrating a confidence in further downstream processing, the DoF has also allocated space for one 100-mt-capacity and two 20-mt-capacity plants in Muara for investors interested in developing processing facilities, although ahead of upstream capacity upgrades interest has been limited.
CHALLENGES AHEAD: While producing high-quality fry remains a challenge, industry developments since 2010 have demonstrated both industry and market potential. Capacity upgrades in Brunei Darussalam’s upstream hatchling and fry sector will yield profits with existing and healthy domestic demand. However, the industry’s true market potential will be realised by expanding export demand, which at this juncture remains limited only by restricted upstream capacity.
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