Competitive Advantage Uncovered in Norwegian Cod Farming Practices
July 9th, 2008 by AndrewFresh research from Nofima, the Norwegian aquaculture research organisation, shows that Norwegian cod farmers are prioritising different sources of competitive advantage to maximise their probability of success.
The most important advantages were favourable location for cod farming, high level of product quality, competent staff, the ability to supply as requested and good relationships with other companies.
“It is important to have control over and master the technological and biological challenges in cod farming,” says Sogn-Grundvåg. “Competent staff is therefore decisive in reducing the company’s production costs.”
The fact that companies are trying to utilise different competitive advantages implies that different strategies are being tested.
Aquaculture Management (whatever the species) can learn from the experiences and adopt the most successful strategies.
One of the practices highlighted by the research is farmers striving to become a reliable supplier by achieving a critical mass of production. Achieving a higher production threshold will allow them to supply on a reliable basis year round to demanding large supermarket chains.
As the Nofima press release points out, in the absence of sufficient production volumes to command a year round marketing relationship the farmers are timing their production to achieve maximum prices.
Changes in water temperature and the schedule that the fish follow in reaching sexual maturity are additional challenges to achieving the desired levels of production control.
I suppose the ability to finely control and monitor growth conditions will be critical to the ability to produce premium quality fish year round - to meet demand.
If we were to think in terms of adopting a ‘manufacturing mindset’ as opposed to a ‘farming mentality’ this would lead us lean towards adopting production environments where we can exert maximum control.
Does this mean that the aquaculture production facility of the future is more likely to be a land based recirculating system than an open ocean cage or pen where control over growing conditions is more problematic?
Tags: cod, manufacturing, nofima, norway
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July 10th, 2008 at 8:38 am
Good post, Andrew, and it raises issues that are the subject of ongoing debate (and argument). As for most issues, there is no simple answer. All aquaculture production can be considered to have three elements: site, species and production system. The optimum production system (for example, recirc or open ocean cages) will be determined by site and species and ultimately by the associated competitive advantages, management and cost of production. Similarly, if you start off with a production system, like a recirc system, you then need to select a species and site that are compatible with the system and satisfy the critical requirements of both (management and biological).
An intensive recirc system may well produce fish profitably if located, constructed, managed and operated in such a way that production costs are within economic limits, but that would obviously be governed by where it is, the cost of power, other inputs, water availability and so on. Clearly, features that are sustainable and provide a competitive advantage would help, such as the availability of large (reliable) volumes of heated water.
Another key factor, of course, is fresh or marine. Fresh water recirc is well established and used successfully for the commercial production of fresh water finfish species, or diadromous ones such as barramundi. I think we have good opportunities to develop this form of aquaculture in Western Australia. However, I am not aware of any large-scale marine finfish production based on recirc systems (I’d be delighted to hear if there are any that are operational on a commercial scale).