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Korean company to buy Senegalese tuna cannery could benefit from free access to EU market

12 November 2011

Atuna reports that the Korean company Dongwon is interested in making acquisitions in Africa as part of a strategy to become a truly global player. At present Dongwon is strongly focused on the Pacific Ocean, where most of its tuna purse-seiners are fishing. But with increasing catch-reduction measures on tuna fishing in the Pacific, and its remoteness from the EU market, Dongwon is considering lessening its dependence on the Korean and US canned tuna markets and the Pacific Ocean, by starting an operation in Senegal.

The company has recently been expanding its activities in the Atlantic Ocean with the acquisition of two French tuna purse-seiners. There are indications that it is building a stronger presence in the Atlantic, so that it can enter the EU canned tuna market. The Société Nouvelle des Conserves du Senegal (SNCDS) cannery in Senegal could play a role in this strategy. SNCDS employs around 1,500 people and is one of the largest canneries in Senegal. Although it has a capacity of 25,000 tonnes of whole round tuna a year, it has only been achieving about 30% of this over the last few years. The main problem has almost always been the lack of supply of tuna raw material.

According to Intrafish sources, the potential SNCDS deal is ongoing. By having its vessels supply the SNCDS cannery and by giving a financial impulse to the company, enabling it to also buy frozen skipjack tuna from other large vessels, Dongwon could create a company which would export canned tuna to Europe duty free, as Senegal does not pay any duty when exporting to the EU, so long as vessels meet the rules of origin. When reflagged, the two Dongwon seiners could possibly reach these criteria. 

Editorial comment

Multinational companies, particularly from Asian countries, are increasingly investing in ACP on-shore operations, as they have in Papua New Guinea or, as in this case, in Senegal, which could give them duty-free access to the EU market. In the case of Senegal, this is to be welcomed, as local canning facilities are being underutilised jeopardising their economic viability as well as the jobs they provide. However, it will be important for Senegal to ensure that such investments, which are linked to licences being granted to the company’s purse-seiners, do not lead to unsustainable fishing in the Senegalese EEZ and in the region, as over-exploited tuna stocks would hamper any canning industry and related prospects.


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