Aquaculture Industry in Santa Catarina, Brazil

108 Pages·2014·2.17 MB·English

2014
Aquaculture Industry in Santa
Catarina, Brazil
Prepared by:
To Be Canada IncP.a ge |

9/7/2014
Disclaimer
This report provides an overview and guideline information and must not be relied on
to cover specific situations. Application of the guideline will depend upon the
individual circumstances for which professional advice must be obtained before
making decisions, acting or refraining from acting on any of the information in this
publication. We could offer readers help on how to apply the guidelines set out in this
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result of any information in this document.
Photo Credit
Empresa de Pesquisa Agropecuária e Extensão Rural - Institute for Agriculture
Research and Rural Development (EPAGRI) Video
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Executive Summary
This market research was commissioned by Innovation PEI on behalf of Trade Team PEI
to study and assess the state of the Santa Catarina aquaculture industry in Brazil with a
focus on the mussel industry. The research also evaluates the competitive
environment and investigates the product-market match. Innovation PEI identified an
opportunity through secondary research for Prince Edward Island (PEI) businesses that
sell aquaculture equipment, supplies and services to expand export and business
development opportunities in a growing aquaculture industry in Santa Catarina, Brazil.
Further, an initial meeting with a group of industry stakeholders has confirmed interest
in better understanding the market and its opportunities and identified the need for
further market research.
To successfully complete this research a project team led and managed by To Be
Canada sourced market intelligence by undertaking a comprehensive literature review
followed by primary research of the Aquaculture industries (with a focus on Mussels)
in Santa Catarina and PEI.
The research finding indicates that the Santa Catarina mussel industry is more than
two decades old and was established to provide a livelihood to the small local farmers
of Santa Catarina. Despite its age, the industry is in its infancy in terms of technology,
food safety and commercialization. However, gradually things are beginning to change
with the advent of more progressive farmers, commercial scale farms and processing
companies.
The industry in Santa Catarina includes two distinct parts. A large part of the industry
includes small farmers with small cottage industry operations and limited resources.
These farmers tend to use adapted and rudimentary equipment and are averse to
change. The other part of the industry includes younger more progressive farmers and
a few companies that are looking at further developing commercial operations with
modern equipment and machinery. This modern approach is positive and is likely to be
a turning point for the mussel industry in Brazil.
Although the Brazilian and Santa Catarina governments have created progressive
policies and regulations over the years they are unable to implement these policies
successfully and struggle with enforcing regulations due to socio-economic factors.
This has hindered the process of modernization of the mussel industry.
Research indicates that that there are very few suppliers of mussel equipment and
machinery in Santa Catarina other than some vendors who sell basic equipment like
ropes and buoys (used plastic containers). Some farmers use smaller equipment
adapted from the agriculture industry; however, equipment and machinery is
imported in from only a few vendors.
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PEI based project research produced a diverse picture of product and service
capabilities of aquaculture industry suppliers. PEI suppliers have evolved their
knowledge, experience and internal supply capabilities over the course of three
decades in tandem with the growth and development of the PEI mussel industry.
Seven dominant PEI supply categories emerged from the research findings. Of these,
five were deemed to have some degree of opportunity in supplying to the Brazilian
mussel industry. They include;
 Engineering and Design Expertise
 Aquaculture Equipment, Manufacturing and Custom Fabrication
 Product Packaging Capabilities, Knowledge and Expertise
 Services – Business Management and Development
 Services – Environmental Stewardship Management, Food Safety and Research
Although a core PEI supply competency, there appears to be limited application
currently available in Brazil for;
 Boat Building Expertise
 Commercial Diving Expertise
There are also possible organizational and institutional opportunities in academic
exchanges, training, research and science partnerships, joint venture investments and
partnerships with medium to larger companies. Also consulting opportunities may
exist with select government agencies, funded cooperatives and organizations with
financial resources.
It is clear from the research results that some PEI companies desire to grow their
business opportunities internationally. It is also clear that there are varying degrees of
interest in exploring Brazil as a market of opportunity ranging from confirmed interest
to low. With a cluster of PEI companies expressing cautious optimism about Brazil
there is some interest in formalizing a company specific evaluation of the prospective
opportunities there. Company focused market research and prospecting activities
including potential visitation to the market were referenced by suppliers as possible
approaches to further defining and confirming export sales opportunities in Brazil.
Irrespective of confirmed market opportunity, a key finding from the research was the
definite willingness and openness of some PEI companies to work with a cluster of
other complimentary non competing PEI suppliers in a coordinated fashion to access
new export opportunities.
Although some companies had clear experience and working knowledge of Latin
America as a place for doing business, the majority of PEI companies expressed the
need to better understand the macro market picture of Brazil, the business and
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political environment, cultural nuances and any specific challenges that could exist in
developing business there.
Supporting PEI supplier companies in their efforts to realize prospective business
opportunities in Brazil was seen as a necessary and important role for Trade Team PEI.
Research results suggest specific support could include short and long term investment
and facilitation and organization of strategic approaches and activities.
Clearly, Trade Team PEI will need to assess this input within the context and greater
vision for International Export Development for the Province. Unquestionably, primary
research results with some PEI suppliers suggest some interest in further exploring
tangible opportunities for new business development in Santa Catarina, Brazil.

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Table of Contents
Executive Summary ........................................................................................................ i
Section A: Literature Review of the Mussel industry in Santa Catarina, Brazil................ 1
1. Introduction – Mussel Industry in Santa Catarina ................................................... 2
1.1 An Economic Overview of Santa Catarina ........................................................ 2
1.2 History of Mollusk Production in Santa Catarina ............................................. 2
2. Mussel Production in Santa Catarina ...................................................................... 4
2.1 Domestic Consumption ................................................................................... 5
3 Government’s Role and Support in Santa Catarina ................................................. 8
3.1 EPAGRI and Institutional Research .................................................................. 8
3.2 Government Programs in Brazil ...................................................................... 9
4 Mussel Cultivation and Mussel Industry - Santa Catarina ..................................... 13
4.1 Industry Structure ......................................................................................... 13
4.1.1 Small Scale Producers – Cultivadores ..................................................... 13
4.1.2 Cooperatives .......................................................................................... 14
4.1.3 Companies ............................................................................................. 15
4.2 Vendors and Service Providers ...................................................................... 16
4.2.1 Marine Equipment ................................................................................. 16
4.2.2 Mar do Sul Aquicultura .......................................................................... 17
4.2.3 Siderúrgica Sismaq ................................................................................. 17
4.2.4 Acqua Imagem ....................................................................................... 17
4.2.5 Preamar Aquicultura e Sistemas Aquáticos ............................................ 17
4.2.6 Panaroma da Aquicultura Magazine ...................................................... 18
4.2.7 Engepesca .............................................................................................. 18
4.2.8 Trevisan Equipamentos Agroindustriais Ltda. ......................................... 18
4.3 Production Methods and Characteristics ...................................................... 19
4.4 Challenges in the Industry ............................................................................. 21
5 Entry Options for Foreign Companies................................................................... 21
5.1 Incorporation of a company .......................................................................... 21
5.2 Acquire Capital Stocks ................................................................................... 22
5.3 Joint Venture ................................................................................................ 22
5.4 Export ........................................................................................................... 23
5.5 Licensing ....................................................................................................... 23
6 Environmental Aspects ........................................................................................ 25
Section B: Primary Research Mussel industry in Santa Catarina, Brazil ........................ 26
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7 Methodology of Primary Research Santa Catarina, Brazil ..................................... 27
8 Mussel Industry in Santa Catarina ........................................................................ 28
9 Production and Processing of mussels: ................................................................ 30
10 The Mussel Market ........................................................................................... 31
11 Growth of Mussel Industry in Santa Catarina .................................................... 32
12 Political ............................................................................................................ 33
12.1 Government Programs .................................................................................. 33
13 Economical ....................................................................................................... 35
13.1 Investments .................................................................................................. 35
14 Social ................................................................................................................ 36
15 Technological ................................................................................................... 37
15.1 Seed Cultivation and Reducing Mortality ...................................................... 37
15.2 Equipment and Machines ............................................................................. 37
16 What Can Be Improved .................................................................................... 38
17 Imports in the Mussel Industry ......................................................................... 39
18 Perception on Use of Canadian Technology ...................................................... 40
19 Market Entry Recommendation for Canadian Companies ................................ 41
Section C: Literature Review of PEI Industry ................................................................ 42
20 Introduction – PEI Mussel Industry ................................................................... 43
21 Growing Mussels .............................................................................................. 44
22.1 Techniques and Growing Methods ................................................................ 44
22.2 Seed Collection ............................................................................................. 45
22.3 Mussel Harvesting......................................................................................... 45
22.4 Processing ..................................................................................................... 45
23 Environmental Protection, Stewardship and Sustainability ............................... 47
24 Building an Industry.......................................................................................... 48
24.1 Growing an Appetite for Mussels .................................................................. 48
24.2 Leasing .......................................................................................................... 48
24.3 Food Safety ................................................................................................... 49
24.4 Monitoring .................................................................................................... 49
25 The Evolution of the Aquaculture Supplier ....................................................... 51
26 Exportability of Supplier Expertise .................................................................... 52
27 Acquired Strengths of Suppliers to the PEI mussel industry .............................. 53
27.1 Improvements in Process and Productivity ................................................... 53
27.2 Innovative Solutions to Challenges ................................................................ 53
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27.2.1 Crop Fouling .......................................................................................... 53
27.2.2 Vessels .................................................................................................. 53
27.2.3 Training ................................................................................................ 54
27.2.4 Commercial Diving Expertise and Acquired Knowledge .................... 54
Section D: Primary Research of PEI Industry ................................................................ 55
28 Primary Research PEI - Methodology ................................................................ 56
29 Confirmed Interest in Growing Exports Internationally ..................................... 57
30 Plans for Expansion .......................................................................................... 58
31 International Experience of PEI Suppliers ......................................................... 59
31.1 Knowledge of Doing Business in South America .................................... 59
31.1.1 Political .................................................................................................. 59
31.1.2 Economic ............................................................................................... 59
31.1.3 Competition ........................................................................................... 60
31.1.4 Social and Cultural ................................................................................. 60
31.1.5 Technological ......................................................................................... 60
31.2 Institutional Partnering and Collaborations ........................................... 61
31.2.1 Food innovation and Commercialization ................................................ 61
31.2.2 Food Safety Systems Expertise ............................................................... 62
32 Industry Needs Driving Supply to Aquaculture .................................................. 63
33 Variable Interest and Cautious Optimism ......................................................... 64
34 Pursuing Market Development and Methods of Entry ...................................... 65
34.1 Importance of Evaluation on a Company by Company Basis ......................... 65
35 Inventory of Product or Service Offerings ......................................................... 66
35.1 Engineering and Design Expertise ................................................................. 66
35.2 Custom Fabrication – Metal Works ............................................................... 66
35.3 Boat Building Expertise ................................................................................. 67
35.4 Commercial Diving Expertise ......................................................................... 67
35.5 Product Packaging Expertise ......................................................................... 68
35.6 Services – Business Management and Development ..................................... 68
36 Quantifying and Qualifying the Opportunity ..................................................... 69
37 SWOT of PEI Mussel Industry............................................................................ 71
Section E: Analysis....................................................................................................... 72
38 Snapshot Comparison of PEI and Santa Catarina .............................................. 73
39 Synopsis of Mussel Industry in Santa Catarina .................................................. 75
40 Opportunity in Santa Catarina and Product Market Match ............................... 77
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41 Key Observations and Outcomes to Consider Moving Forward......................... 85
42 Appendix .......................................................................................................... 86
Appendices 1: PEI Interviewee List .......................................................................... 87
Appendix 2: Santa Catarina Interviewee List ............................................................ 89
Bibliography ................................................................................................................ 91
End Notes ................................................................................................................... 97

Table of Figures
Figure 1: Table and Long Line System .......................................................................... 20
Figure 2: Mussel Harvesting in Santa Catarina ............................................................. 29
Figure 3: Packaged Mussel with Government Approval Seal ....................................... 32
Figure 4: Testing the Santa Catarina Waters for Impurities.......................................... 33
Figure 5: Processing Facility Approved by Serviço de Inspeção Federal (SIF) ................ 34
Figure 6: Rudimentary Buoys in Santa Catarina Waters ............................................... 38

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Section A: Literature Review of the Mussel industry in Santa Catarina,
Brazil

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