Chapter 273 - 145: Chain Reaction

Chapter 273: Chapter 145: Chain Reaction

At this market price, An Nan fishmeal producers lose money on every ton they sell.

It’s impossible to do business like this.

This was also why Yonghuan Company chose to suspend production.

At current international fishmeal prices, even domestic feed producers within An Nan wouldn’t use local fishmeal. They would opt to import Peruvian fishmeal instead.

With neither exports nor domestic sales viable, continuing production would only lead to greater losses.

As for whether international fishmeal prices could recover...

A small fisherman like Ruan Zhiqiang might hold out a sliver of hope, but the top executives of fishmeal producers like Yonghuan Company had already lost all hope for this market.

If the price drop was caused by a climate-driven surge in production at major global fisheries like the Peruvian Fishery, they could have weathered the storm. Market prices always recover eventually.

But now, Cyrus had achieved a technological breakthrough. They could produce millions of tons of Egyptian Catfish Meal every year.

How could anyone possibly compete with that?

Peruvian fishmeal had advantages in production capacity, cost, and quality. As long as the price of fishmeal didn’t fall below 700 US Dollars per ton, they could still make a profit.

But fishmeal from Southeast Asia cost between $800 to $1,000 per ton to produce, and its quality was inconsistent, positioning it as a low-to-mid-tier product in the market.

The current situation was a fight between Peruvian fishmeal and Cyrus’s fishmeal, but the first casualties were the producers in Southeast Asia.

In an instant, it wasn’t just the fishermen of Shouguang Fishing Port who were plunged into despair.

Fishing ports all along the coast of An Nan with fishmeal factories were thrown into a state of panic and despair.

A dozen or so fishmeal-related companies had no choice but to announce the suspension of production.

The impact on An Nan was enormous.

An Nan could produce about 300,000 tons of fishmeal annually, with one-third of its wild-caught fish used for fishmeal production. The annual direct economic benefit could reach 300 to 400 million US Dollars.

Last year, thanks to the soaring global fishmeal prices, An Nan’s fishmeal industry had achieved unprecedented profits, with annual revenue reaching 580 million US Dollars.

Many An Nan fishmeal producers had been gearing up, ready to make big moves this year, expand their production capacity, and reach new heights.

But instead of glory, they were met with the end of their industry.

「In the Mekong River Delta in southern An Nan.」

In Ba Ria-Vung Tau Province lies Gugang Fishing Port, one of An Nan’s major Category 1 fishing ports. This area is also the heart of An Nan’s Basa Fish aquaculture industry.

Last year, An Nan’s Basa Fish production reached 1.84 million tons, leading the Asia-Pacific region.

Take Yonghuan Company, for example. It’s one of the leading enterprises in An Nan for Basa Fish processing and export. Its business is centered on Basa Fish, with products exported to over 60 countries. Of the Basa Fish imported by Cyrus, their company accounts for more than 16%.

However, the largest Basa Fish farming and processing enterprise in An Nan is Nanyue Company. This company owns 3,750 mu of traditional open-air fish ponds, which can supply 120,000 tons of Basa Fish annually.

In the last six or seven years, Nanyue Company has developed another 9,000 mu of "high-tech" aquaculture sites, providing 250,000 tons of Basa Fish annually.

In addition, the company also has 20,000 pairs of broodstock, can produce 14 billion fry annually, and owns a feed mill with an annual production capacity of 800,000 tons.

The other major An Nan Basa Fish farming and processing companies are:

Jinou Seafood Company, which specializes in processing and exporting various seafood products, including shrimp, crab, and Basa Fish.

IDI International Development Investment Company and Daqing Seafood Company.

The headquarters of these companies are all located in various cities within the Mekong River Delta.

「Meanwhile, inside Nanyue Company’s headquarters.」

Its Chairman and CEO, Duan Wei, Vice Chairman and General Manager, Du Liye, and five or six other senior executives all wore grave, unpleasant expressions.

Duan Wei looked at the reports gathered from Lingnan, and he said slowly in a heavy voice, "Our fishmeal and fish oil business might not be salvageable."

"Chairman, it’s actually not that serious." A cunning glint flashed in Du Liye’s eyes.

Duan Wei put down the documents and looked at the company veteran. "Liye, what are your thoughts?"

Du Liye clasped his hands together. "Hailufeng Company’s Egyptian Catfish feed samples—we can totally replicate them. As long as we don’t sell the feed, they can’t do anything to us."

A sharp glint flashed in Duan Wei’s eyes. "Indeed. As long as we can get our hands on the feed samples, they’ll have no way to stop us. Let’s do it."

"Chairman, don’t celebrate too soon," Du Liye warned with a solemn expression.

"Liye, are you worried about Hailufeng Company and Cyrus’s feed companies?" Duan Wei didn’t have a favorable impression of his neighbor to the north.

Du Liye reminded him helplessly, "Chairman, don’t forget who the world’s number one importer of fishmeal is right now. If we mass-produce Egyptian Catfish Meal, who are we going to sell it to?"

"..." Duan Wei instantly understood.

The other executives looked at each other in dismay.

Everyone present understood the reasoning as soon as they heard it.

The global fishmeal situation was now clear. Cyrus and Peru had divided the world between them, while fishmeal from other regions could only eke out a meager existence in their own territories.

And Cyrus is both a fishmeal producer and the world’s largest fishmeal importer.

Peru is merely a fishmeal producer, and its production capacity fluctuates with the seasons and years.

Therefore, in international competition, Peruvian fishmeal is less competitive than Cyrus’s fishmeal.

This was the terrible reality Nanyue Company had to face. Stealing Hailufeng Company’s ordinary Egyptian Catfish feed would be easy. After all, farms all over Lingnan were currently using this feed. Anyone determined enough could easily buy a sample.