Africa’s largest tilapia producer Lake Harvest says Zambia now accounts for nearly 70 percent of its volumes after exports to Europe plummeted due to high production costs after the introduction of the multiple currency regime.
Sales and distribution general manager Kenneth Jonga said while volumes have been growing steadily over the years, labour costs and high feedstock have eaten into the company’s earnings.
The company, once a dominant player also faces competition from Chinese breams and local fish farmers but remains upbeat on the future.
Lake Harvest was formed in 1997 targeting the European market.
“Initially Lake Harvest was modelled for the European market. From 1997 to about 2011 we exported over 60 000 tonnes of fillets to the European market,” Jonga said at the launch of the Zimtrade Zambia market study on Thursday.
“Once dollarisation came across, our costs of production became a big challenge so we could not compete on price on the international market for the fillets so we had to restructure and find alternative ways to survive.
“Before that, 10-15 percent of our production was going to the Zimbabwean and Zambian market. We grew our farm from about 3 000 tonnes a year to about 7 000 tonnes in 2011.”
In 2011, the African Development Bank extended an $8 million loan to fund the company’s Aquaculture (LHA) project on Lake Kariba. The project was designed to help expand tilapia fish farming and supply affordable protein to the sub-region.
The company then targeted African markets, with Zimbabwe expected to take up 37 percent of production. Another 50 percent will go to markets in the Southern African region, while Europe is expected to absorb 13 percent.
Before EU exports fell, Lake Harvest, penetrated Zambia through a third party arrangement, Jonga said adding that the company had since opened 16 selling points in that country.
“There was an influx of Chinese breams into the Zambian market, so most people are not loyal, they go for the price, so we had a big challenge. To date our farm now produces 10 000 tonnes of Kariba bream and 7 000 tonnes roughly go into the Zambian market,” he said.
“We have had challenges like the influx of Chinese products which killed the market and also the exchange rate issues. We suffered losses due to exchange losses over the years but we keep going.
“The locals are also realising that there is an opportunity in fish farming, so they have also started bringing up farms. It will take a couple of years but they will catch up, so we have to be on our toes and try and compete.”-The Source