U.S. fisheries outsource processing to China   

By Choy Leng Yeong of the Bloomberg News
TUESDAY, JULY 19, 2005

SEATTLE Pacific salmon swim as far as 3,200 kilometers to lay their eggs in rivers up and down the U.S. Northwest.

Once caught, some make a longer journey: 12,800 kilometers, or 8,000 miles, to China and back.

Facing growing imports of low-cost seafood, fish processors in the Northwest, including Trident Seafoods, are sending part of their catch of Alaskan salmon or Dungeness crab to China to be filleted or deshelled before returning to U.S. tables.

''There are 36 pin bones in a salmon and the best way to remove them is by hand,'' says Charles Bundrant, founder of Trident, which ships about 30 million pounds, or 13.6 million kilograms, of its 1.2 billion-pound annual harvest to China for processing. ''Something that would cost us $1 per pound labor here, they get it done for 20 cents in China.''

Trident and other companies that use Chinese labor say it is a way to protect a U.S. industry that is under threat from farmed seafood produced by China, Thailand, Vietnam and Chile. Imports accounted for 78 percent of the 4.7 billion pounds of seafood Americans consumed last year, according to the National Marine Fisheries Service.

The states of Alaska and Washington have each lost about one-fifth of their processing jobs over the past decade. In Washington, average monthly employment in the industry fell to 6,434 in 2004 from 8,668 in 1994, says Rick Lockhart, a state economist. Alaska 's employment dropped to 8,500 last year from 10,400 in 1995, according to the Web site of the state Department of Labor and Workforce Development.

''It's a dying industry in the U.S.,'' says Tony Neves, senior vice president of Red Chamber, the second-biggest U.S. seafood company.

Pacific Seafood, the third-biggest U.S. seafood company, started a trial six months ago to process Dungeness crabs in Qingdao, China. Crab shakers there get $100 to $150 a month to extract meat from crab shells with pincers — one-tenth what it might cost in the United States, says John Lin, who oversees new-product development at the company. ''Because labor is so much more affordable, they can spend more time to take the crab meat out'' in China, Lin says. ''There's a higher recovery rate.''

Premier Pacific Seafoods of Seattle spent $10 million last year to build a new facility to prepare Alaskan pollock for sale to processors in China.

The fish are de-headed and gutted on a ship in the Bering Sea, then frozen and sent to China, says Douglas Forsyth, Premier Pacific's president. Once there, they are boned, skinned and cut into portions ranging from 2 ounces, or 57 grams, to 6 ounces, he says.

U.S. supermarket chains and retailers are helping to drive the practice, says Forsyth. ''You're dealing with national retail chains that have strict product specifications that are so exacting that they require hand processing,'' he says.

Even factoring in 20 cents a pound in transportation costs, processing in China is still cheaper for the most labor-intensive fish, says Bundrant at Trident.

Outsourcing needs to be monitored to ensure that plants comply with U.S. food-handling standards, says Lisa Goche, president of Surefish, a seafood-inspection company based in Seattle. The firm is getting more work from U.S. companies to audit plants in China as more fish is processed there, she says.

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