Competing on quality
Wu Pei-shan says frankly, “From 2008, with the effects of the US subprime mortgage crisis and the European debt crisis, for a while ornamental fish from Taiwan seemed to have no future, and fish breeders had hit a bottleneck in terms of what species to raise. But in 2009 cherry shrimps from Taiwan won an award at the International Shrimp Championship at the pet fair in Hanover, Germany, and Larmax made a name for itself with its successful sales of ‘five-elements shrimp.’ These events brought about a renaissance in Taiwan’s ornamental fish industry.”
Chen Wen-ding, chairman of the Northern Ocean Aquarium Center, has been involved in the ornamental aquatic animal industry for more than 30 years, and is himself a microcosm of the sector’s evolution. It all started back in 1965, when Chen’s father established a fish farm in Yongjing Township, Changhua County. Later the farm was relocated to Jiaoxi in Yilan County to take advantage of the area’s unique hot spring water. Then in 1988 they bought some land in Chaozhou Township in Pingtung, where they still operate today. Northern Ocean, which occupies 1.6 hectares, is considered a large fish farm in the ornamental sector, and currently follows an operating model of diverse high-volume production, with an annual output of some 200,000 fish. Chen’s unusual personal career has enabled him to build relationships with wholesalers in both central and northern Taiwan, with the result that Northern Ocean’s products have been mainly sold in Taiwan’s domestic market. Every Monday a 17-ton truck arrives to carry away about 300 crates of product from Northern Ocean and nearby fish farms, taking them north to supply the wholesalers.
By contrast, Long Life Fish Farm, located in Zhutian Township, is a small-scale farm of only 0.4 hectares. Owner Lee Chi-tai targets expert-level hobbyists at the top of the price pyramid. He states that Taiwan’s ornamental fish farms can no longer compete with the low-priced products of farms in Indonesia and Thailand. However, in mature markets like Europe and Japan, consumers value purity of lineage in the animals they buy, emphasizing their place of origin and associated distinctive characteristics. Lee believes this presents a feasible direction for Taiwanese fish farms’ future development. Therefore Long Life does not stress the development of new varieties, but instead specializes in raising Taiwanese species that are relatively rare on the market, using high-quality feed and natural algae, and not adding hormones, so that the fish develop their natural hue. The fish are then sold directly to buyers via social media.
Producing mainly koi (colored varieties of the Amur carp, Cryprinus rubrofuscus), the Luxe Fancy Carp (Koi) Farm has similarly followed the path of upmarket production. Owner Huang Yi-wen explains: “A koi should have a large head, broad shoulders, and a thick caudal area. The texture of the colors should be like an oil painting, full and dense. The patterns on the back should be symmetrical both front to back and left to right, with changes at intervals, so that seen from above it looks like a painting.” Koi at the farm undergo a preliminary selection 60 days after the eggs are hatched, then a second screening 50 days later, when they are divided into several classes by quality—competition grade, AA, A, and B. At the end of this process only 20% of the original fish fry are left. Huang Yi-wen observes, “In the domestic market few people keep competition-grade koi, but there are plenty of buyers for the AA and A grades.” Also, Luxe is located close to Kaohsiung, and many senior citizens from the city choose to buy property in Pingtung for their retirement. Besides gardening, they also install ponds to raise koi. Luxe’s reputation for high quality attracts many consumers to come in person to the farm to buy.
Although the immediate future looks good for the ornamental aquatic animal industry, invariably the profits brought by following the crowd and producing popular product lines are short-lived. If an enterprise wants to last long in an industry, besides starting from basics and assuring product quality, other critical elements include how to make the best use of their existing facilities and human resources, devise suitable marketing strategies, and find an appropriate business model. The ability of Taiwan’s ornamental aquatic animal industry to break out into global markets will in the end depend on the perseverance and wisdom of each producer.
Although many fish farms produce ornamental shrimps, only Larmax International selects them individually for color and size. After any sick shrimp are screened out, you have high quality shrimp that stand out from competitors. Wang Kuo-chung says proudly: “We set the prices for five-elements shrimp!”
Taiwan’s very own “five-elements shrimp” require a lot of mineral ions to achieve their beautiful colors. Many fish farms in Southeast Asia have tried to enter this trendy sector of the market, but so far without success.
There are many bacteria and viruses associated with koi carp. This is why disease prevention measures at the Luxe Fancy Carp (Koi) Farm are so strict. To prevent infection, fish that have been sold cannot reenter the farm.
Lee Chi-tai sees a wealth of potential market opportunities. Specialized hobbyists, who do not buy from large wholesalers, provide a niche in which small-scale ornamental fish farms can find a footing.
The characteristics of different fish species are suited to different ways of admiring them. Koi carp are famous for the patterns on their backs, and are best viewed from above.