Aquaculture Industry in Santa Catarina, Brazil

Transcription

2014
Aquaculture Industry in Santa
Catarina, Brazil
Prepared by:
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To Be Canada Inc.
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
publication to their specific circumstances. No responsibility will be accepted for any
liability or loss occurred to any person or entity acting or refraining from action as a
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.
2.
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
Mussel Production in Santa Catarina ...................................................................... 4
2.1
3
4
Government’s Role and Support in Santa Catarina ................................................. 8
3.1
EPAGRI and Institutional Research .................................................................. 8
3.2
Government Programs in Brazil ...................................................................... 9
Mussel Cultivation and Mussel Industry - Santa Catarina ..................................... 13
4.1
6
Industry Structure ......................................................................................... 13
4.1.1
Small Scale Producers – Cultivadores ..................................................... 13
4.1.2
Cooperatives .......................................................................................... 14
4.1.3
Companies ............................................................................................. 15
4.2
5
Domestic Consumption ................................................................................... 5
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
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
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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1. Introduction – Mussel Industry in Santa Catarina
1.1
An Economic Overview of Santa Catarina
Santa Catarina is a Brazilian State, which along with Parana and Rio Grande do Sul form the
Southern Region of Brazil. Santa Catarina has a population of over six and a half million
people, it is divided into 295 municipalities, with a total surface of 95,736 square kilometers
and an internal gross product estimated at CAD$ 77 billion1. The State has the second
highest Human Development Index amongst the Brazilian States (HDI 0.774) 2, and one of
the best social and development indexes in Latin America.
As is the case with other states in the southern region, Santa Catarina was one of the last
states in Brazil to be occupied, mostly by European settlers in the beginning of 19 th Century
in an effort to define the Brazilian borders against the interest of other South American,
Spanish speaking countries 3. The majority of settlers came from Germany, Italy and the
Azores.
Santa Catarina has a coastline of 561 kilometers. Some of its most important cities, as well
as its capital, Florianópolis, are located on the shores of the Atlantic Ocean. This region, also
known as “Litoral Catarinense” is a leading producer of fish and seafood and is responsible
for most of the Brazilian production of bivalve mollusks. Among the mollusks cultivated at
Santa Catarina, in order of volume, the top three species are mussels (21,027 tons), oysters
(2,468 tons), and Coquilles Saint-Jacques (similar to scallops - 5.6 tons)4.
In Santa Catarina, the aquaculture for mollusk production started in the year 1986, initially
with oysters, by importing seed from Japan which was then followed by mussels. Currently,
there are more than 4,000 jobs generated by the mussel production industry 5. The state’s
waters offer optimal conditions for the production of mussels, due to their salt content,
favorable temperature, presence of nutrients and the existence of numerous bays and
estuaries of its coast6. The production of mussels, also known as “mexilhões” or “mariscos”
in Brazilian Portuguese, although present in a number of cities on the coast of Santa
Catarina, is more significant in the municipalities of São Francisco do Sul, Palhoça, Penha
and in numerous districts of the capital city-island of Florianópolis7.
1.2
History of Mollusk Production in Santa Catarina
The production of mussels initially started in Santa Catarina in the districts of Santo Antonio
de Lisboa and Enseada do Brito in Palhoça 8. A group of fishermen struggling to maintain
their source of income during the time of year when fishing is either not allowed or when
the sea conditions are not favorable were looking for an alternative source of income 9. The
availability of natural stock of fish was also diminishing probably due to climatic changes,
overexploitation, urbanization of the coast and disturbance of the Trophic chain 10. This
pioneering group received support from Universidade de Santa Catarina (Santa Catarina
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University). The university at that point already had a group researching oyster production
and could use some of their knowledge to support mussel research. The Brazilian
Government also supported this initiative as it realized that the activity could represent a
sustainable and yet profitable activity for small scale fishermen 11. By 1990, the first
operations commenced. Over the past 24 years this activity has grown and currently there
are approximately 657 aquaculturists in the state, organized in 20 municipal associations,
one state association and one cooperative, distributed in 12 cities along the coast 12.
Present day, Santa Catarina accounts for more than 90 percent of all bivalve mollusks
produced in Brazil, with more than 23,000 tonnes of in-shell mollusks produced in 2012. The
increase in volume production is in accordance with the ever growing demand for seafood
in Brazil. In 2012, the total sales recorded 13 were more than R$ 45 million (approximately
CAD$ 22 million) in the domestic market14.
The leadership of Santa Catarina in mussel production is a result of natural and geographical
factors (the temperature of the water in the State is neither excessively cold nor warm
making it ideal for production). In addition, there are numerous bays and the depth of the
water is appropriate. The biggest producers are far from industrial pollution and there is
strong support from research institutions and the local government 15.
Mussel producers, unlike oyster producers (who depend on the production of seed in
laboratories), use seed that is directly gathered from the sea. Mussel seed is collected
directly from the sea using collectors placed just below the water surface and near the rocky
outcrops where the mollusks naturally occur. The opportunity to obtain seed directly from
the sea allows for production at low cost and creates an opportunity for small scale
producers. Families historically dependant on small scale fishing can produce mussels
without large investments or high production costs, thus farming mussels makes an
enormous positive economic and social impact on the local community. This is also
recognised by the Brazilian government at all levels 16.
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2. Mussel Production in Santa Catarina
The mussels produced in Santa Catarina, locally known as the mexilhão, is of the species
Perna perna. Some of the other species used around the world for mussel aquaculture
include the “Blue Mussel” Mytilus edulis, the “Patagonian Mussel” Mytilus chilensis and the
“Green Mussel, Kiwi Mussels or Green Lipped Mussel” Perna Canalicula. Perna perna
naturally occur in Brazilian waters. Perna perna is a native of the South Atlantic and its
natural habitat range from the Brazilian State of Espirito Santo to Uruguay. Since mussels
are native to the Brazilian coast, its seed is not regulated by the government under the
provisions that limits the production and import of potentially invasive aquatic species, like
the Pacific Oysters (Cassostrea gigas)17. IBAMA (“Brazilian Institution of the Environment”)
RESOLUTION 145/1988 controls the introduction of non-native, potentially invasive
species.18
Florianopolis, the capital island of Santa Catarina, is a high-end tourist destination in Brazil,
with some of the most expensive real estate in the country. Since Florianopolis receives a lot
of up-market tourists, there is a demand for gourmet restaurants and gourmet products
(like shrimp and wine) which are produced in nearby regions. The government seeing the
potential for much sought after seafood, including mussels and oysters realized they could
increase the supply of these products to satisfy tourists and improve the local economy 19.
A large part of the shellfish harvested is sold locally to tourists and visitors. Santa Catarina´s
coast is one of the most sought after Brazilian tourist destinations. The mussels are sold in
its natural form, both in-a-shell or de-shelled and without any branding, certification or
labeling. The remaining produce is either sold to a processor or to intermediaries who then
sell it to supermarkets, fish shops or directly to consumers living far from the coast20.
The production of oysters and mussels from the very beginning had a very different focus.
For the production of oysters, businesses received support with the objective of
commercializing it on a large scale. Mussel production on the other hand, was strictly
reserved as an alternative for low-income farmers and for those primarily involved in
cottage fishing21.
The research for the production of mollusks in Santa Catarina started in the 1980´s, with the
native mangrove oyster (Crassostrea rhizophorae). Thereafter, studies were conducted on
the production of the Pacific or Japanese Oysters (Crassostrea gigas)22. Although Pacific
oyster larvae (seed) have to be produced in laboratory conditions, it requires substantially
less time to mature as compared to native oysters. A new laboratory was built at
Universidade de Santa Catarina to capitalize on this advantage and specially cultivate oyster
seed. Until the creation of this laboratory all the seed was imported from either Chile or
Japan23.
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In the mid 90´s, the Canadian government and the University of Victoria, British Columbia
supported and assisted the Brazilian Federal Government through the “BRAZILIAN
MARICULTURE LINKAGE PROGRAM”. This program gave a new thrust to the research
program, as Canada provided state-of-the-art equipment and production techniques.
Currently, the Laboratorio de Moluscos Marinhos (Sea Mollusks Laboratory) at Universidade
de Santa Catarina aggressively researches technologies applied to the production of mussels
(both adult mussels and seed) as well as the production of other mollusks24.
In 1997, upon request of the former Ministry of Environment, Water Resources and Amazon
Regions and as a part of a strategy called Decentralized Action (aimed to establish the
sustained development of fishing communities in Rio de Janeiro State and Santa Catarina)
the program for the “Sustainable Development of Mussel Production” (Desenvolvimento
Sustentado da Produção de Moluscos) was set up with resources from the World Bank 25.
This program, in Santa Catarina was coordinated by EPAGRI (Empresa de Pesquisa
Agropecuária e Extensão Rural - Institute for Agriculture Research and Rural Development),
a State controlled, not for profit institution and FATMA (Fundação de Amparo ao Meio
Ambiente - Environmental Protection Foundation), a foundation controlled by the State,
responsible for defining and implementing sound environmental practices 26.
The technical side of the program was supported by researchers from two of the most
prestigious universities in Brazil, Universidade Federal de Santa Catarina (UFSC), a federal
university from Florianópolis, and Universidade do Vale do Itajaí, a state university based in
Itajaí. Initially, the guidelines of the program were i) identify production areas off the coast
of Santa Catarina; ii) train and professionalize cultivadores (cultivators); iii) develop
sustainable systems for the collection of mussel seed; iv) create a system to control the
quality of water and product as per health standards; v) create awareness of environmental
issues and waste treatment and vi) support creation of mussel producer associations and
empower the cultivators 27.
Later, the efforts of Universidade de Santa Catarina were focused towards creating a mussel
production department; a laboratory specifically designed to focus on the production of
mussels and strengthen dealings among cultivators, government institutions and the
general public 28.
2.1
Domestic Consumption
In a market research conducted in 1998 in 277 commercial establishments, including fish
shops, supermarkets, pubs and restaurants, in Florianópolis (the biggest market for the
product in Santa Catarina) it was found that 64.91 percent of the buyers preferred to get the
product deshelled and only 42.98 percent would buy shelled live mussels29.
It was also found that fish shops preferred not to buy mussels that were smoked or in jars,
but supermarkets were open to the idea of new products. Of the consumers interviewed,
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43.17 percent were interested in trying new products and 24.23 percent intended to
consume more mussels in the future. Interestingly, the consumption of mussels fell during
the winter months by more than 64 percent 30.
With an eye on the export of mollusks, CONAMA (the National Council of Environment)
enacted rule 357/2005 that regulates the production of aquatic species depending on the
quality of farm waters31. Also, technical research was conducted to study how mollusks,
mostly oyster could be produced as per European Union’s (EU) requirements. In the EU the
quality of mollusks is certified after examining the meat of the animal and not the water in
which it is raised.
Institutes in Santa Catarina are also working on producing two other bivalves species,
Scallop Coquille Saint- Jacques (Nodipecten nodosus), and Vongole or clam (Anomalacardia
brasiliana) on an experimental scale. The intent of clam production is to protect the natural
stock; scallops on the other hand, may have a promising future in terms of commercial
value.
Mussel production occurs in aquaculture farms, or “cultivos”. The “espinhaços” (floating
ropes) system is used in Santa Catarina and this differs from the “industrial continuing long
line production” used in Chile, Canada and New Zealand. This system has little or no
mechanization and is labor intensive32. The implementation of the continuous method used
in New Zealand is being considered to achieve increased production in Santa Catarina 33.
The federal government promotes mussel production by granting rights to farm mussels in
marked spots on the coast. The rights are given free of cost to families and small producers
along with all the necessary environmental licenses and environmental impact assessment
reports. The allocation of spots is regulated through a Presidential Decree 34 and aims to
promote development of traditional fishing communities, aquaculture and sustainability.
The last offer (licitação) was made in 2013, when the federal government offered 64 new
production spots in nine cities across the Littoral35.
There is no commercial production of mussel seed in Brazil as the production of mussels
depends on collecting seed directly from the sea. The collection of juveniles directly from
rock formations is strictly regulated36. After the seed is fixed to floating ropes (espinhaços),
they take about six to 11 months to attain their ideal size. Mussels are harvested shortly
after the production of their reproductive gametes, since at this stage the animal is
considered “fat” (or “gordo”) due to increase in its body mass and volume37. The suitable
conditions for growth of mussels in Santa Catarina is reflected by the fact that mussels
mature faster in Brazil as compared to mussels in Spain (18 months), France (24 months)
and Holland (36 months)38.
Although mussel farming is a low investment and labor intensive activity that is expected to
be a source of supplementary income for the local community, it brings with it challenges in
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the form of processing the meat and selling it commercially. Further, in Brazil any food
product sold outside the state must receive an SIF stamp (“Serviço de Inspeção Federal” or
Federal Inspection Service). Since most of the small producers lack both access to
information needed to obtain a SIF and lack resources to comply with the technical
standardized conditions, they have to sell their product locally and miss out on the
opportunity to sell them in big markets like São Paulo, Rio de Janeiro or Curitiba 39.
In the past, small scale production was considered the predominant model to produce
mussels in the state; however, lately, a number of companies have been investing in this
activity. Also, these companies are aggressively seeking funds from the federal government
to enhance their operations in Santa Catarina. These ventures tend to target markets
outside the state of Santa Catarina and some are even looking at overseas markets. The
biggest operator is Cavalo Marinho, which has received more than R$6 million
(approximately CAD$ 2.8 million) to invest in a processing facility. These companies, besides
owning their farms are also buying mussels from the small producers and selling them in the
national market by using its existing distribution channels 40. These companies are now
processing 80 percent of the seafood produced in the state.
In 2012, the production of Perna perna was 21,027 tons, an increase of 47 percent over the
previous year41. The cities of Palhoça, Penha,42 São Francisco do Sul, and a number of
districts in Florianópolis 43 were the leading producers in the State. The co-existence of
fishermen, small mussel farmers and larger scale companies has created some conflict in the
region. The farmers point out that their product cannot compete with the beautifully
presented and labeled mussels produced by large scale companies and this creates unfair
domination, thus pushing the smaller farmers out of the market 44. Fishermen also complain
that the channels used to gain access to open sea are being dominated by mussel producers
and the structures used in mussel production blocks the way of their boats45. Local
producers also complain that these companies do not comply with their promise to buy the
local producer’s products. These companies defend themselves by saying that they still do
not have the capacity to acquire all that is produced locally. Companies also have their share
of complaints. They argue that the rules that apply to them, specifically the norms related to
and bureaucracy associated with environmental licensing are not imposed on the small
producers 46.
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3 Government’s Role and Support in Santa Catarina
The Federal Government and the State Government share responsibility for economic
development in Brazil. Both are responsible for implementing programs and providing
support to certain industries. Usually the federal government implements programs to
address nationwide issues, whereas the state government implements programs to address
more local and state relevant realities 47. At the federal level the development of
aquaculture and increase of seafood products is under the purview of the Ministry for
Fishing and Aquaculture (Ministério da Pesca e Aquicultura, MPA). This Ministry works
jointly with the Ministries of Agriculture, Industry and Environment to implement all
programs related to production of seafood and to increase its consumption. The Ministry
(MPA) is currently headed by Eduardo Lopes, who personally assists the President in all
related matters and is responsible to act in accordance with federal guidelines defined by
the presidency 48.
In 2009, the Secretary of Fishing and Aquaculture was transformed into the Ministry of
Fishing and Aquaculture (MPA) as per Federal Law 11.958/200949. The official government
program for MPA is the Multiyear Plan (PPA) 205250. The ministry is committed to assisting
the producers to increase production of aquatic organisms by implementing programs for
aquaculture like offering farming spots, implementing environmental licensing, research &
development and modernization of existing structures. Recently, MPA opened 64 new
marine spots in Santa Catarina. Those spots were offered by a public bid to the local
population with intent to increase production of mussels and oysters by 8,500 tons. The
producers were given the responsibility of acquiring bare minimum machinery and
infrastructure. The new spots are located in the cities of Biguaçu, Bombinhas, Florianópolis,
Penha, Porto Belo, Barra do Sul, Palhoça, São Francisco do Sul and are expected to start
producing immediately 51.
The state of Santa Catarina unlike other states has a state secretary for Fishing and
Agriculture with specific programs and budget devoted to the development of aquaculture.
Among the programs the most important is “Pesca Boa” (Good Fishing) which is aimed at
increasing production, consumption and sale of seafood produced in the State52. This
program also promotes and links the state action with that of the city. Also, through its
agency EPAGRI, it promotes research and development of new technologies.
3.1
EPAGRI and Institutional Research
Empresa de Pesquisa e Extenssão Agropecuária (EPAGRI - Institute for Research and
Agriculture Development) of Santa Catarina has played a key role in achieving some of the
most innovative developments in aquaculture in Brazil. The scientists at EPAGRI with the
support of Universidade de Santa Catarina (UFSC) and Universidade do Vale do Itajaí
(UNIVALI) are the biggest influencers in development of mussel production in the State53.
Page | 8
UFSC and UNIVALI are federal and a state university respectively and have been involved in
extensive research for development in aquaculture. UFSC operates the Laboratory for
Marine Mollusks (LMM) that was responsible for breeding the first pacific oyster seed in
laboratories in Brazil. Present day, the scientists at LMM are studying the possibility of
producing mussel seed in the laboratory and also researching the impact of mussel
production on the environment 54. UNIVALI, CEMar (Experimental Center of Marineculture
or Centro Experimental de Maricultura) has its own mussel producing laboratory and it is
also researching factors that can improve the production of mussels. Also, CEMar has
imported machinery from Spain and a boat from Chile to use as a sample while developing
local technologies for Santa Catarina55.
At the city level, where there is a substantial production of mussels, there is a Municipal
Secretary for Fishing and Agriculture. Florianopolis, Palhoça, Penha and São Francisco do Sul
are some of the cities where the Municipal Secretary performs an important role as they are
close to the community and local industry and therefore aware of their problems. Penha´s
Municipal Secretary in particular is actively promoting consumption of mussels for the last
19 years through the National Fair of the Mussel (Festa Nacional do Marisco). The last fair
which was held in February 2014 included shows, exposition and presentations and was a
huge success as it received more than fifty thousand (50,000) people56.
3.2
Government Programs in Brazil
In 2011, the federal government initiated the program “Plano Safra da Pesca e Aquicultura”
(Plan for Fishing Harvest and Aquiculture). This program has several objectives including
assisting 100,000 families living below the poverty line, increasing fishing production,
increasing consumption of seafood, ascertaining the Brazilian sovereignty over its Coastal
Line and diversifying the aquaculture production.
To implement this program the government created the Federal Ministry of Fishing and
Aquaculture with a budget of R$ 4.1 billion (approximately CAD$ 1.7 billion). The program
offers financial support to small scale producers, commercial producers, official research
programs and scientific institutions. This financing can be accessed using Programa Nacional
de Fortalecimento da Agricultura (PRONAF), BNDES or other credit lines offered by Banco do
Brasil and Caixa Econômica Federal.
Financial Assistance for Small Scale Producers57
PRONAF provides programs to financially assist mussel and other aquatic organism
producers. Financing is offered through either Banco do Brasil or Caixa Econômica Federal
both state owned financial institutions. Every town in Brazil has a branch of Banco do Brasil
or Caixa Econômica Federal. There is a very simple procedure to obtain a PRONAF credit
line, especially for small amounts.
Page | 9
The beneficiaries of PRONAF are divided into categories A, B, A/C, C, D and E depending on
their annual net income. The money received from PRONAF may be used to acquire
equipment, get technical assistance, get a share in a cooperative, finance other operations
or can be used as capital stock during the harvesting year. A sister program called PRONAF
MULHER (PRONAF Woman) was created to support female producers.
PRONAF, however, requires certain conditions for the acquisition of machinery, equipment
and technical services. It is stipulated that machinery or equipment purchased from PRONAF
finance should have 60 percent of national content. Therefore importing machinery,
equipment, and tools or hiring international technical support is not possible with financing
received through PRONAF.
It is important to note that a company is considered Brazilian once it is incorporated in
Brazil. A company controlled by foreign shareholders if incorporated in Brazil and with
headquarters in Brazil will be considered a domestic company and the products produced
by such a venture will be considered domestic products as long as 60 percent of the value of
the product is manufactured in Brazil. The following credit lines are offered through
PRONAF:
Program
PRONAF
A
Pesca
Beneficiary
Use/Destination
R$13,500
R$15,000
(project with
technical
assistance)
Implementation and
modernization of
aquaculture projects
Producers with
annual income of R$
2,000
R$1,000
Implementation and
modernization of
PRONAF Pesca Producers with
Custeio A/C
annual income of up
to R$ 14,000
Custeio C
annual income of up
to R$ 14,000, Mussel
production principal
source of income
Investimento C
annual income of up
source of income
R$3,000
PRONAF Pesca B
Beneficiaries of the
National Agrarian
Reform Program
Amount
R$3,000
To be used as capital
stock
stock
Interest &
Repayment
1.15% per
annum
10 years to pay
(first payment
may be made
after 5th year)
1% per annum
2 years (first
payment may
be made after
1st year)
2% per annum
1 Year
4% per annum
1 Year
R$ 6,000
R$9,000 (boat
acquisition)
Implementation and
modernization of
aquaculture
projects.
4% per annum
8 Years (first
payment after
5th year)
Page | 10
Program
Beneficiary
Amount
Custeio D
annual income of up
source of income
Investimento D annual income of up
source of income
R$6,000
Custeio E
annual income of up
source of income
Investimento E
annual income of up
to R$ 60,000 Mussel
source
R$ 28,000
PRONAF Mulher
Up to
R$36,000
Female producers
Use/Destination
stock
Interest &
Repayment
4% per annum
1 Year
R$18,000
R$27,000
(boat
acquisition)
Implementation and
modernization of
4% per annum
stock
7.5% per
annum
8 Years (first
payment after
5th year)
1 Year
R$ 36,000
Implementation and
modernization of
Implementation and
modernization of
and capital stock
7.25% per
annum
8 Years (first
payment after
5th year)
Depending on
the income
Another program that may be accessed by small scale producers is PROGER (PROGRAMA
NACIONAL DE GERAÇÃO DE EMPREGO and RENDA - National Program for Income
Generation and Jobs Creation) 58. It is intended to increase the income of small agriculture
producers as well as to generate jobs. This program is primarily for small commercial
producers. As with PRONAF, PROGER may be accessed from any Banco do Brasil or Caixa
Econômica branch. Services, machinery or equipment purchased from PROGER finance
should have 60 percent of national content.
Program
PROGER
Custeio
Beneficiary
Rural Annual income
of up to
R$80,000
PROGER Rural Annual income
Investimento
of up to
R$80,000
Amount
Up to R$48,000
per harvest
year.
Up to R$60,000
or R$240,000
(for associations
or cooperatives)
Use/Destination
Capital stock
Modernization
and increase in
productivity
Conditions of
Payment
8% per annum
1 Year
8% per annum
8 Years (first
payment may be
made after 3
year)
Page | 11
Other lines of credit (commercially known as “Custeio Pecuário Tradicional”) are offered by
Banco do Brasil. In the case of mussel production the credit offered may be more than R$
150,000 depending on the operation, however, interests can be as high as 17.5 percent.
Financing for Commercial Aquaculture Projects59
Aquaculture projects including the acquisition of equipment and machinery may be financed
by BNDES´s program BNDES Prodeagro.
The program expressly states that the money lent may be used in the acquisition of seed,
nets, equipment and machinery, construction of tanks and hiring of labor. The amount
available to each individual producers is R$ 150,000 (approximately CAD$ 68,000) with an
interest rate of 8 percent per annum and an option to pay the first installment after the two
years.
Finance may be provided by BNDES upon presenting a business plan for the commercial
project. Collaterals and repayment periods are negotiable. The awarded amounts and the
beneficiaries are publicly announced but the details of the project and how the money is
spent remains confidential. As an example, Cavalo Marinho / Leardini obtained a credit line
in the amount of R$ 6.4 million (approximately CAD$ 2.9 million) at the end of 2013.
Equipment or machinery may also be acquired using a FINAME credit line. In this case
certain equipment may be acquired after getting approval for the project at BNDES or the
producer of equipment may register themselves with FINAME and offer it as a financing
option. It is then said that the equipment is “finamizado” or enrolled at FINAME.
The entrepreneur intending to acquire a finamizado machine or equipment can do so using
a Cartão BNDES or BNDES card. The card will automatically offer the payment plan and
interest rate to the borrower. The Cartão BNDES will be connected to the beneficiary’s
Banco do Brasil account and BNDES credit line.
BNDES/Finame publishes a catalog with all registered products. Currently, the
BNDES/Finame catalog has only one mussel related product, a processing line for mussel
deshelling & cleaning and is offered by a Brazilian company Siderúrgica Sismaq.
As with PRONAF the lines of credit may be used solely for the acquisition of equipment
which contains more than 60 percent of national content. Equipment imported or
assembled in Brazil may not be financed.
Page | 12
4 Mussel Cultivation and Mussel Industry - Santa Catarina
Mussel cultivation in Santa Catarina is mostly carried out by small farmers or small scale
producers (Cultivadores). Alongside the Cultivadores, there are some companies that have
also started commercially producing mussels on a larger scale. The small scale producers
may form cooperatives to gain better access to the market and as an association deal with
public policies and manage common interests60.
4.1
Industry Structure
4.1.1 Small Scale Producers – Cultivadores
Small scale producers represent the majority of cultivadores in Santa Catarina. The vast
majority of these producers started mussel cultivation as a secondary economic activity
(besides small scale fishing). Cottage fishing or artisanal fishing is practiced throughout
Brazil by a number of communities, some of them labeled and protected as “traditional
population”. Traditional population has a particular set of cultural values and is dependent
on the environment and sustainable use of natural resources. The Brazilian constitution
protects the status of the traditional population and the government has a number of
programs aimed to assist these groups.
In Santa Catarina small scale fishermen are either descendant of immigrants from the Island
of Azores who arrived in Brazil about 150 years ago or from Caiçaras (in the North Coast of
the State). Caiçaras are descendants of Europeans (mostly Portuguese) and Native
Americans (mostly Guarany and Xok`leng). Cottage fishermen are organized in colonies
(colônias). These colonies have the same legal status as an organization or a labor union
even though it may not be formally incorporated. Over the last 20 years these colonies have
organized themselves into associations or federations (a union of two or more colonies).
There are around 299 colonies in Brazil61.
Mussels are produced on a small scale in “cultivos”. The production processes are as per
practices and culture of the cottage fishing industry and is dependent on family labor,
manual work and with no or very early stages of mechanization62. Normally the system used
by small producers is “espinhaço” which resembles the long line producing system with local
adaptations. The lines are left at sea attached to floating devices which are usually used
plastic containers 63.
Cultivos is done in marked spots (sítios). The great majority of spots have less than one
hectare (10,000 square meters) of sea surface area64. Theses spots are defined based on
studies conducted by the government, which are aimed at identifying the most suitable
areas for mussel production and eventual social and environmental impact of this activity.
The use of spots on the shore (called concession) is granted at no cost to local fishermen65.
Page | 13
Although physically demanding, this activity is a far more comfortable option when
compared to open sea fishing. Interestingly enough in the municipality of Palhoça, most of
the producers (65 percent) are older than 51 years. It is believed that aquaculture is
comparatively less demanding and less dangerous. In addition the younger population lacks
interest in this activity66.
Many small producers have limited formal education. Among the “cultivadores” of Palhoça
45 percent have not completed primary school and 5 percent are illiterate. The lack of
education can be a drawback while assessing business opportunities, obtaining the
necessary certificates and licenses and in handling bureaucratic procedures67.
Manual production of mussels on a small scale also creates bottlenecks in terms of volume
produced and productivity. The introduction of new technologies and mechanization may
offer these producers a bigger margin of profit and therefore a better quality of life 68.
Although already grouped in colônias, the fishermen that entered production of mussels are
organizing themselves in specific associations and cooperatives. These associations serve as
consortiums for the cultivadores while negotiating with suppliers and buyers. The
associations also support producers in maintaining their own identities and cultural
characteristics 69.
Another option available for small producers is to combine to incorporate a larger business
operation. The most emblematic example of this in Mar E Pesc, a company created by the
union of three small-scale operations in the City of Palhoça 70.
4.1.2 Cooperatives
Small producers through cooperatives may gain better access to distribution channels and
reduce production costs. Also Brazilian Law favors cooperative efforts in many ways
including lower taxes that would give the cooperatives an advantage of more than 35
percent over other companies71.
EPAGRI promotes the incorporation of cooperatives. However, due to lack of knowledge
and inadequate follow-up from the government, cooperatives are not able to offer small
producers any substantial advantage except helping them to procure the rights to use
marked spots (sítios) defined by the federal government. These spots are publicly offered to
the local population through public bids and permits producers to use the space without the
need for further environmental studies or licenses72.
The most active and influential cooperative in mussel aquaculture in Santa Catarina is
Cooperativa de Maricultores de Canto Grande (COOPERMAC), from the Municipality of
Bombinhas. COOPERMAC was proposed by the municipal government and unlike other
cooperatives its constitution is not defined by the local community. This initiative also
helped in empowering women, as some administrative jobs were offered to local women.
Page | 14
However, this and other cooperatives lack management capability in implementing
processing plans or advanced market oriented strategies73.
4.1.3 Companies
Although small farmers produce most of the mussels, the opportunity in this industry has
attracted a number of professionals, mostly those looking for an alternative lifestyle away
from big cites. The entrance of professionals in mussel farming and processing has
enhanced the professionalism in the industry. Biologists, professionals and businessmen are
not only investing in aquaculture but also helping in implementing changes that may
positively impact the whole industry.
Mussel aquaculture is present mostly in rural areas, unlike oyster aquaculture which is also
present in urban areas. There is a marked price difference between mussel and oysters. The
higher price from oysters justifies higher investments in terms of urban land, hiring
employees and commercial production of seed. Oyster farming is done in midsized
operations in urban areas to supplement the income of people working and living in urban
areas. The urban oyster producers have minimal challenges handling the necessary
bureaucracy required to conduct business that aims to sell products to the broader
market74.
Mussel production on the other hand has very few midsized operations. Most mussels are
produced by small farmers as family operations or by commercial companies on a larger
scale. These big companies are able to handle all the bureaucracy that is needed to sell their
products to a larger market and overseas.
One such company is Cavalo Marinho/Leardini75. The Company has its administrative
headquarters in Navegantes and the mussel production unit in Palhoça. Leardini (annual
sale of CAD$ 80 million) acquired Cavalo Marinho to increase its already existent mussel
business. Leardini intends to additionally invest CAD$ 12 million until the end of 2015 on its
mussel production. The company’s goal is to multiply the volume of its mussel sales by 20
times and increase the revenues from mussel production to reach CAD$ 16 million annually.
Cavalo Marinho received from BNDES76 a line of credit of CAD$ 2.8 million to acquire
machinery and equipment77.
According to the President of the company the objective is to transform Brazil from a mussel
importer to being self-reliant and an exporter. To reach these ambitious goals Attilio Sergio
Leardini declared that large investments will be made in mechanization of production and
processing. The company also requested the Ministry of Fishing and Aquaculture for new
concession production areas in the region. The company still uses the brand mark “Cavalo
Marinho” while selling deshelled or semi-deshelled mussels in frozen and refrigerated
packages78.
Page | 15
Another important player in this industry is Fazenda Marinha Atlantico Sul79. The company
was formed by the merger of three smaller companies. These small companies realized that
they would get better leverage and opportunities by pooling their resources together.
Atlântico Sul was incorporated in 1999 and this allowed Atlântico Sul to develop its own
processing facility as well as obtain the SIF (a license needed to sell food and food products
in other States in Brazil). One of the core strengths of Atlântico Sul is that they are able to
sell their products all over Brazil. The company even offers a “mollusk subscription” service,
a system that allows urban dwellers in cities like Brasilia (located far inland) to get fresh
oysters and mussels on a regular basis. The company produces oysters, vongoles, scallops,
and mussels. Mussels are sold fresh and frozen in the shell, in half a shell or deshelled80.
Mar e Pesc is another important company from that region that has invested in mussel
production and processing. The company was founded by one of the pioneer cultivadores Zé
Tucano in 1991. The cultivo was founded using mussel seed offered by the Universidade de
Santa Catarina and received support from EPAGRI. The company produces 10 percent of all
mussels in Palhoça, and offers a vast array of processed products including mussel
croquettes and batter coated mussels81.
Besides these companies there are other producers that are looking for opportunities in this
industry. Incorporation of a company makes the procedures easier and allows access to
credit lines and more financial support82.
4.2
Vendors and Service Providers
A scan of mussel industry suppliers operating in Santa Catarina produced a summary of
some of the services and equipment providers listed below.
4.2.1 Marine Equipment
Marine Equipment, a company located in Florianópolis, Santa Catarina acts as the
commercial representative for a number of international companies producing everything
from boats to fish farming products. They represent the following companies in Brazil:
Name of Company
ANSCO Engineering Co.
Country of Origin
New Zealand
Quality Equipment
Plastipon
Typi Town
Confecciones Shelter
Ocean Tech
Hvalpsund Net
New Zealand
Spain
Chile
Chile
Chile
Denmark
Products
Machinery for industry - processing tables,
pressure cookers, vibratory conveyors, shell
crushers, meat shakers, feed hoppers,
inversion bath, debearding machines etc. For
farming - rope hauling systems, mussel
seeders, Mussel cookers, davits
Ropes and lines
Boxes for mussel cleaning
Cotton nets
Water Suits
Aquaculture Boats
Mussel producing nets
Page | 16
Contact Information:
Av. Desembargador Vitor Lima, 260, s. 908
Trindade, CEP 88040-400, Florianópolis
tel. 48 3371 4300
[email protected]
www.marineequipment.com.br
4.2.2 Mar do Sul Aquicultura
Mar do Sul Aquicultura Ltda. is a Brazilian company that offers a vast array of products for
mussel farming. Their products include ropes, buoys and nets.
CEP 88048-422
48- 8807 9168/ 8807 9029
[email protected]
www.mardosul.com.br
4.2.3 Siderúrgica Sismaq
Siderurgica Sidelmaq is a manufacturing company with a focus on the production of
machinery for the textile industry but it also produces and sells machinery for de-shelling
mussels. Their product may be bought with a “BNDES Card”.
The equipment is sold for R$ 150,000 (approximately CAD$ 60,000).
4.2.4 Acqua Imagem
Acqua Imagem is a consulting company that offers technical courses for companies and
agencies in fish farming and aquaculture. The courses are publically offered and can also be
customized for organizational needs.
R.Evangelina Soares de Camargo, Nº 115 - Jd. Estádio - 13203-260 - Jundiaí - SP
Fone/fax: (11) 4587-2496
E-mail: [email protected]
www.acquaimagem.com.br
4.2.5 Preamar Aquicultura e Sistemas Aquáticos
Preamar Aquicultura e Sistemas Aquaticos is a Brazilian company with its headquarters in
Sao Paulo. Preamar produces laboratory equipment and one of their significant customers is
Uniniversidade Federal de Santa Catarina.
http://www.aquapreamar.com.br
Page | 17
4.2.6 Panaroma da Aquicultura Magazine
The magazine “Panaroma da Aquicultura” is a bi-monthly publication that has a number of
articles and advertisements from the aquaculture industry (including mussel farming).
www.panoramadaaquicultura.com.br and http://www.panoramadaaquicultura.com
4.2.7 Engepesca
Engepesca manufactures tanks, nets, buoys and lamps that are used in producing mussels
and oysters. The company is also the commercial agent in Brazil for Intermas of Spain, a
company that produces cages and filters for aquaculture production.
Rua Brusque 460 88303-000 Itajai-SC
(47) 3344 6929
[email protected]
www.engepesca.com.br
4.2.8 Trevisan Equipamentos Agroindustriais Ltda.
Although this company does not produce equipment specifically for the mussel industry, it
produces machinery and equipment that may be adapted for the mussel industry like
transport boxes.
Av. Independência, nº 2168 - Centro
85950-000 - Palotina - PR
(44) 3649-1754 / Telefone: (44) 3649-1777
[email protected]
www.trevisan.ind.br
Page | 18
4.3
Production Methods and Characteristics
In Santa Catarina three different cultivation methods are used by producers83:



Rack or Table system
Long-line system
Continuing production long-line system
The rack or table system was the first system to be used in Brazil. It is a fixed structure or
table arranged as a frame or a cage that provides support to the mussels. It was the first
system to be adopted but proved to be less effective in Brazilian conditions and also
demanded more work to harvest mussels. It works well in very shallow water with not more
than 3 meters of depth. Since the lines that hang from the structure should not touch the
bottom of the Ocean, only ropes up to 1.5 meters are used thus limiting the performance of
the apparatus to a maximum of 25 kilograms of mussels per rope84. The rack system is still in
use in Palhoça and Florianópolis, although in Palhoça it has been gradually replaced by the
long line system. In Florianópolis this system is still operational as it is associated with oyster
cultivation.
Mussels in Santa Catarina are produced by small scale cultivators using the method
“espinhaço”. Espinhaço is a local adaptation of the long line system used in North America
and Europe. The system was adapted to the local, social, economic and geographic reality of
Santa Catarina by researchers from EPAGRI85.
The espinhaço is an arrangement of a series of ropes that hang from a central long line. The
long line supports the smaller lines and is in turn supported by buoyancy devices mostly
made from empty 50 liter packages (used packages of chemical material) and structures of
wood or metal (construction rejects). There is no uniformity in form or visual programming
and this visual pollution is creating issues resulting in protests by the local population86.
Most farmers produce mussels up to a depth of 6 meters, with about 10 percent producing
up to a depth of more than 10 meters. The ropes that hang from the principal line measure
about 3 meters. Every long line supports about 200 ropes. Cultivators use 1 kilogram of
mussel seed for every 1 meter of rope. These seed will be converted in eight months to
about 14 to 16 kilogram of mussels. Every kilogram of shelled mussel gives 385 grams of
meat; therefore every kilogram of seed produces about 5.3 to 6.1 kilograms of meat87. This
system is much more profitable than the rack system and since it tends to be used in more
open water as compared to the rack system, it is less affected by pollution (the natural
dynamics of the open water creates a cleaner environment for production). The
performance of the system may be enhanced by the use of appropriate equipment (towing
devices, equipped boats, etc.)88. Most boats used by the producers are the same as those
used for fishing shrimp, with no uploading or towering system that could be used to pull the
ropes from the sea to the boat 89.
Page | 19
Some producers, notably those that received proper guidance from research institutions
such as UNIVALI are now equipped with better suited boats and towing equipment. Those
producers also tend to use a home-made raft, instead of the shack used on land to take the
mussel out of the rope and to put the seed back on it. A raft for this purpose was imported
from Chile and some of its features have been adapted by the producers90.
Some research has been done to improve the methods of production. Scientists at UNIVALI
(Universidade do Vale do Itajai) have tested machinery imported from Spain. The machinery
tested is used in the production method known as “continuing long line” (CLL). There was
also an official visit to New Zealand to a leading mussel producer to research more effective
systems that would be suitable for Santa Catarina91. The CLL system allows more
production per surface used and reduces efforts while collecting mussels. Instead of using a
number of ropes fixed at the long line the CLL uses laces of ropes fixed by its loops to the
long line. CLL is possible only when the farmers are using machinery specifically designed or
adapted for the process, as the operation is mechanized. The machines are able to process
one meter of rope per second. According to research the cost of the equipment is still out of
reach of individual producers but the equipment could be acquired by cooperatives. The
cost of the equipment imported was € 2,404 for the machine used in the extraction of the
seed and € 3,950 for the machine used to fix the seed on ropes at the long line. This has
been rented to producers at Penha and some experiments have been conducted to produce
a domestic version of the equipment 92.
Figure 1: Table and Long Line System
Page | 20
4.4
Challenges in the Industry
During the National Workshop for the Mussel Aquaculture Industry (“Workshop Nacional da
Plataforma do Agronegócio do Cultivo de Moluscos”) it was pointed out that one of the
major obstacles faced by the mussel industry in Brazil is a lack of a common marketing and
branding strategy. The Brazilian mussel has no commercial name, whereas mussel produced
in New Zealand are branded New Zealand Green Lipped Mussel, mussel produced in PEI are
branded PEI Blue Mussel and mussel produced in Chile are branded Patagonian Mussel.
According to some specialists Brazilian mussels can be more successful if they are effectively
marketed and branded as they are more colorful and have more flavor than mussels
produced in colder waters93.
Other problems faced by cultivators are the lack of bacteriology control in the production
spots (although a very small program is underway at Universidade Federal de Santa Catarina
that is researching bacteriology control). Also there is difficulty in acquiring equipment such
as buoys, nets, processing equipment and boats94. Another obstacle is the lack of a
laboratory to produce seed, unlike in the case of oysters. This makes the production heavily
dependent on the seed obtained directly from natural stocks. The seed used in the
production of oysters, all produced under artificial conditions, tend to make the final
product more expensive but it also guarantees a constant supply of inputs 95.
5 Entry Options for Foreign Companies
Mussel production in Santa Catarina may present a number of opportunities for foreign
investors. In order to better understand such opportunities, it is important to understand
the various options available, from foreign direct investments to exporting products to
Brazil.
5.1
Incorporation of a company
Either an existing company or an individual may directly incorporate a company in Brazil.
Brazilian federal law provides for two kinds of incorporation Limitada (Ltda) and Sociedade
Anônima (S.A.)
A Limitada resembles an American L.L.C or a Canadian Ltd. Any two or more partners may
incorporate a Limitada company. The partners may be individuals or companies. Foreign
citizens and foreign companies may be partners of a Limitada as long as a Brazilian resident
is appointed as the legal representative of the company. Also the representative’s name will
appear in the registry at the Brazilian Tax Revenue Agency 96. The Limitada is easier to
incorporate and its balances and accounting registries are easy to maintain, however, the
incorporation of a Ltda. does not guarantee the protection of its partner’s assets in labor or
other commercial disputes.
Page | 21
A Limitada may be transformed into a Sociedade Anônima (S.A). S.A is a company that is
basically a corporation. As with the Ltda the partners may be foreign companies or citizens.
The names of the partners do not necessarily appear on the documents of incorporation.
They, however, appear in the corporation registries and may be requested by judicial order.
The book keeping costs of a S.A is much higher than that of an Ltda. There are a number of
other statutory and legal provisions that tend to make the maintenance costs of a S.A
higher, especially with foreign partners as there are obligation for meetings and
publications97. Usually, ventures start to operate in Brazil as Ltda. and change whenever
necessary to an S.A.
To receive money from overseas it is necessary to register the newly incorporated company
at the Brazilian Central Bank. Such registration will allow the transferred money to be used
as capital stock as well as to allow the remittance of dividends overseas98.
There is no minimum requirement for the capital stock but the value must be proportionate
to the capital that is intended to be used in operations.99
Incorporating a company in Brazil will facilitate import and or distribution of product
produced overseas. Also the exporter would be better served by incorporating a company if
they plan to assemble products in Brazil100. The various scenarios in which foreign partners
would require to incorporate a company in Brazil are101:



5.2
Directly import and distribute its products in Brazil
Assemble a product in Brazil to prevent potential industrial or proprietary rights
infringement
Incorporate as a “Service Company” to protect commercial information and to better
control the operation
Acquire Capital Stocks
Another way to directly invest in Brazil would be to acquire capital stock of an existing
Brazilian company and preferably the control of such company in order to jointly explore
existing and under explored opportunities.102
In the case that the capital stock of an existing company is acquired, it is important to keep
in mind the existing liabilities, as those will also be acquired (proportionate to the share of
capital). However, this is an effective way to rapidly enter the market.
5.3
Joint Venture
Under Brazilian Law, a joint venture (JV) will be considered a joint commercial action
undertaken by two previously existing companies or by partners of such companies. Thus a
JV may be created among i) a foreign company and a Brazilian company; ii) a Brazilian
company controlled by a foreign individual or company and a Brazilian Company; iii) Two
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foreign companies (in this case a new Brazilian company will be incorporated) and iv) Two
foreign companies acquiring the total capital stock of a Brazilian company 103.
A pure joint venture in Brazil will be “broadly a specific purpose company” (SPE -Sociedade
de Propósito Específico). An SPE will have a scope limited to a single action, for instance, the
import of a certain machinery. It is also very common in Brazil to have what is called a
“contractual joint venture” in which a common objective is defined.
As previously pointed out there are a number of opportunities for the sale of equipment
specially designed to aquaculture in Brazil. Although some of this equipment is beyond the
financial reach of most of the mussel producers they could be sold either to associations,
cooperatives or even to one of the few companies that are already in a more advanced
stage.
5.4
Export
The import of industrial equipment is regulated in Brazil and whenever similar (or same)
equipment is produced in Brazil an import tax will be levied on the imported item’s price.
On the other hand, equipment and machinery that are not currently manufactured in Brazil
can enter the country with a reduced tax burden. In order to avoid taxation the importing
company may request the Federal Revenue Service (Receita Federal) for a temporary waiver
(ex-tarifário)104.
5.5
Licensing
The import of equipment may not be easily financed in Brazil by local producers. Since Santa
Catarina has a tradition of producing machinery 105 which is sold all over Latin America, a
good opportunity could be to license to a local producer and manufacture it in Santa
Catarina.
The licensed company would be able to finance its production cost either using BNDES
(Banco Nacional do Desenvolvimento) or FINAME. The buyer of the machinery may also
have it financed106. Currently, only Cavalo Marinho has requested financing in the order of
R$ 6.4 million (approximately CAD$ 2.8 million) to improve its production methods and
processing facilities107.
A product produced by an incorporated company may also be financed using the “Cartão
BNDES” (BNDES card). Cartão BNDES is an instrument to provide line of credit to small
ventures solely to acquire products, mostly equipment and machinery that would be used in
production of goods or to render services. The interest charged is among the lowest in
Brazil, favoring the buying of such equipment and minimizing production and operation
costs. A product can be bought by a company using Cartão BNDES only after it is listed in the
catalog of BNDES. Presently only one product related to the mussel production industry is
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listed and that is “Linha de Desconche de Mariscos” (de-shelling industrial system) produced
by the Brazilian company Sismaq)108 at a cost of R$ 150,000 (approximately CAD$ 60,000)109.
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6 Environmental Aspects
The increase in mussel production is not matched with an increase in production of seed.
The demand for seed has created an illegal black market for seed, putting at risk the natural
populations of Perna perna in Santa Catarina 110.
Some believe there is a solution to the problem of availability of seed and that is producing
seed under laboratory conditions. Others point out that the production of seed in the
laboratory would increase the costs of production, driving out smaller and poor
producers 111.
The import of seed from overseas producers is not seen as a solution to the problem. The
mussel industry that exists in other countries produce other species (Mytilus in North
America and Europe; Pena caniculata in New Zealand) and the import of alien, potentially
invasive species of aquatic animals is strictly regulated and mostly prohibited as per IBAMA
Rule 145/1998 that regulates the import of alien species 112.
One of the most important environmental impacts brought about by this activity is the
disposal of the shell, once the mussel is deshelled (completely or partially). In Spain, which is
used as a model for mussel production in Santa Catarina, the shells are returned to the Sea.
According to a research conducted in 2001 half of the small producers use the shell as land
filling and the other half follow the Spanish example of returning the shells to the water.
Since the shells possess minerals, organic matter and incrusted algae it tends to increase the
eutrophication process. The same research concluded that none of the farms were using the
shell to create any byproduct such as shell powder and organic compounds113.
The quality of mussels like all filtering mollusks is dependent on the quality of water. Since
they take their nutrients from the sea they filter whatever is present in the water. In waters
polluted by domestic, industrial and oil spills the product is contaminated114. In 2013, an oil
spill caused by the company CELESC contaminated the entire production in parts of the
Island of Florianópolis. The direct impact on the producers was tremendous as the media
published the incident and this caused a dramatic drop in mussel consumption. CELESC was
ordered to pay R$ 20 million (approximately CAD$ 9.6 million) to the producers and also
asked to invest an additional R$ 10 million (approximately CAD$ 4.8 million) in monitoring
and controlling procedures in the region 115.
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Section B: Primary Research Mussel industry in Santa Catarina, Brazil
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7 Methodology of Primary Research Santa Catarina, Brazil
Primary research was conducted for the mussel industry in Santa Catarina. Respondents
included senior executives from large corporate, officials of government agencies, small
farmers and suppliers. The objective of the research was to gain insight in to the mussel
industry in Santa Catarina, assess the competitive environment, identify possible
opportunities, determine possible barriers to these opportunities and get an opinion on the
openness of the industry for importing new or advanced products and services.
The mussel industry was mapped to create a pool of important stakeholders. Respondents
for primary research were then selected from this pool of stakeholders. The selected
stakeholders were interviewed via a combination of email questionnaires, face to face
meetings and telephone interviews. As noted in the research plan, the interviews were
qualitative in nature and unstructured allowing a free flow of dialogue. Guidance was
provided with key questions posed to facilitate important information sharing. Common
themes, significant findings and insights from the interviews are captured below. It should
also be noted that major themes are identified but may not be expansive and allencompassing of every product and service opportunity in Santa Catarina’s aquaculture
industry. Data from interviews was used to analyze common themes, significant findings
and insights. A synopsis of interview outcomes are listed below and include significant
intelligence received in key areas.
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8 Mussel Industry in Santa Catarina
Santa Catarina is the largest producer of Brazilian mussel and accounts for about 98 percent
of the production in Brazil. São Paulo and Rio de Janeiro are other states with some artisanal
producers. In Santa Catarina, mussel production involves over 600 producers with about
2,500 direct jobs. The activity is dominated by hundreds of family run small producers and
farms between one to four hectares. There are few microenterprises that produce a slightly
larger volume, a couple of medium size company (Atlantico Sul, Mar e Pesc, etc.) and only
one large company (Cavalo Marinho / Leardini), which has been increasing its production
every year.
Small farms or producers are averse to change and want to continue to operate in their old
ways. Most farmers are not registered and do not subscribe to the federal inspection
program (SIF) and therefore are neither eligible to get large loans (some small loans are
available to them), nor are they able to sell their produce in the commercial market.
However, one of the younger and more progressive farmers interviewed is planning to
incorporate a company and apply for the SIF. He shared that this will allow him to get more
credit, take advantage of other opportunities including getting additional mussel farming
spots and sell his produce in other states. This is an indication that some younger farmers
are considering registering themselves for the SIF as they see an advantage in doing so.
However, this group of progressive farmers is unhappy because their cost of production
would increase as compared to the other farmers causing them to lose their competitive
edge in the market. They blame the government for not having the political will to strictly
implement its policies.
Cavalo Marinho / Leardini the largest company in the area employs and contracts 35 people.
They currently operate a farm that measures 50 hectares. They produce 1,500 tonnes of
shelled mussels per month. Cavalo Marinho / Leardini is expected to receive another 150
hectares of farming area from the federal government. They had to wait eight years to get
sanctions for additional areas, despite the fact that they are important stakeholders in the
industry. This additional area is away from the seashore and is deeper than the other spots.
This is an advantage for them, as they would be able to automate the operation using the
long line continuing system. Today they are only partially automated and have a processing
facility that is rented from the fisherman’s association which has been upgraded using
government grants. Cavalo Marinho / Leardini’s goal is to be involved in the entire chain of
mussel production, from seed cultivation to sales. They have ambitious plans, including
selling mussels to other parts of Brazil and other Latin American countries. They have hired
a consultant in Sao Paulo to help them identify opportunities that come with globalization in
terms of joint ventures and export opportunities. Cavalo Marinho / Leardini is
experimenting to see if they can produce seed in laboratories and is also looking at
producing other aquaculture animals like the Blue Crab, Cobia and Scallops.
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One of the medium size producers mentioned that they were planning to organize a group
of fourteen small scale producers and registering a Specific Purpose Enterprise (SPE) to
access larger credit, improve bargaining capacity, modernize facilities and have the
capability to buy machinery and equipment that cannot be bought individually.
Figure 2: Mussel Harvesting in Santa Catarina
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9 Production and Processing of mussels:
The largest company in mussel production and processing claims to be the only company
using semi-automated long line system in Santa Catarina. The mussel processing method is
given below (as witnessed by our consultant):








Collection of mussels: The fully grown mussels are collected with the help of rafts.
The ropes which carry the full grown mussels are removed mostly manually
(sometimes by a portable winch) from the sea. The ropes are detached from the line
and brought ashore. The mussels are removed from the rope by stepping on the
rope and with the help of a wooden staff (with a metal coating at the lower end).
The mussels are collected and put in boxes and the ropes are taken back to the sea,
where new seed are added to the seed already on the rope.
The boxes with mussels are then moved to another location, where mussels are
cleaned (sprayed with water) by removing debris, sand and algae.
The mussels are then transferred to a facility where they are scrubbed and washed
by a machine.
Thereafter, mussels are placed on a belt that transports them to a sorting and
separating machine, where they are sorted by size.
The sorted mussels are then put in cookers where they are blanched and
conditioned to help open the shells.
After steaming, mussels are washed and put on the conveyer system, where they are
manually de-bearded and deshelled. The mussel meat is collected in one container
and the shells in another.
The shells are disposed in one of the following methods
o Raw material for bird food
o Land filling
o Used in construction
The deshelled mussels are then prepared for packing. Some of the packed mussels
are sold in the market, while others are frozen.
The machines used by the large producer are developed and built by local fabricators.
Although some machines are used and they have very organized processes, their
operations continue to be rudimentary in most parts. They are looking at further
mechanization and believe they can increase their production and processing capacity,
improve quality and reduce the cost of the final product, making them competitive with
the Chilean (Patagonian) mussels. The president of the company would like to automate
not only their own farms but also encourage other farmers to adopt automation. They
have placed an order for machinery with a Chilean company called Surinox.
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10 The Mussel Market
Small farmers produce approximately 5 tonnes of deshelled mussels per hectare per year.
Deshelled mussels are sold in the range of R$ 20 to R$22 (approximately CAD$ 10) per
kilogram on the beach or in farmer’s markets. The produce sold by small farmers is not
certified, as these farms are not registered for inspection.
Large and medium sized companies sell their products through big market chains at the
same price as those available on the beach. These companies offer a range of mussel
products to the consumer ranging from its natural form to processed forms that enhance
the shelf-life and the geographical reach of these products. They are also researching and
introducing innovative ready to eat products like croquettes, batter covered, cheese
covered mussels, and paella kits (mussels along with calamari, shrimp and fish). Also there is
a certain amount of awareness that is being created by these companies to develop markets
in other regions of the country.
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11 Growth of Mussel Industry in Santa Catarina
In Santa Catarina, production has increased from 9,800 tons in 2004 to over 16,000 tons of
shelled mussels per annum in 2014. Though significant, this growth is considered very small
when compared to Brazil's potential for this activity.
Industry leaders feel the industry is growing slowly due to:




Difficulty in accessing finance despite availability of government programs (most
programs are not specifically designed for mussel farming).
Public policies being aimed at the existing industry and not considering growth
potential. The policies are broad-based and not specific to the mussel industry.
Critics believe that the policies are short-sighted as the policy makers lack vision and
do not truly comprehend the potential of the mussel industry.
Investments in the sector being limited. Most of the funds are from companies
already in the sector.
Production capacity being reduced over the years due to shortage of seed. The
shortage is due to environmental conditions that reduce the natural production of
seed. Most farmers get only a part of the required seed from the ocean, the balance
has to be supplemented by buying them from illegal collectors. Seed are sold at R$ 7
for 20 kilograms.
Figure 3: Packaged Mussel with Government Approval Seal
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12 Political
The government and their execution arm EPAGRI have made efforts in various aspects to
organize and improve the standards of the mussel industry. Government efforts are usually
met with strong resistance from local farmers who are skeptical, fear change and unwilling
to spend on hygiene factors that are prerequisites of the modern mussel industry.
12.1 Government Programs
Public policies implemented from 2004 to 2014 were focused on planning, regulation of
activity, sanitary control of crop fields and increased consumption of seafood. Two
important steps taken during this time were the preparation of Local Development Plans of
Mariculture (PLDM) and the creation of the National Hygienic Sanitary Control of Shellfish
Bivalve (PNCMB).
Figure 4: Testing the Santa Catarina Waters for Impurities
Also, for the last few years the government has implemented strict regulations in marking
mussel farming spots. Streamlining of this process has resulted in reducing conflicts
between producers and the rest of the community and reduction of environmental risks.
EPAGRI and Fundacao de Amparo a Pesquisa e Inovacao do Estado de Santa Catarina
(FAPESC) are jointly developing prototypes for equipment that are useful in improving
mussel farming and processing. Samples or drawing of equipment (not protected by IP) are
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procured from overseas and adapted locally to create prototypes. These prototypes are
tested and then offered to manufacturing companies for mass production. The aim is to
create affordable machinery and equipment adapted to local conditions and local
requirements. They are currently working on prototypes of integrated platforms with
conveyer systems to steam mussels. Also, the government is planning to create a prototype
for winch, declumper, brush cleaner, grader, seeder and equipment to debeard mussels.
They are also studying the requirements to create prototypes for buoys and other devices.
EPAGRI is also working on implementing procedures and controls that will ensure that
farmers produce mussels that are healthy and safe for consumption. They believe this is the
right time to implement these procedures, since the government has now systemized and
organized farming spots. They also believe that environmental risks will be reduced with the
reformation of farming spots and implementation of procedures. EPAGRI is also trying to
convince federal, state and municipal agencies to implement controls that will prevent red
tides.
Figure 5: Processing Facility Approved by Serviço de Inspeção Federal (SIF)
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13 Economical
13.1 Investments
The biggest investment in the mussel industry is being done at this time by the largest
company Cavalo Marinho / Leardini. They have obtained funding of R$ 6.5 million
(approximately CAD$ 3.2 million) from BNDES to start a 50 hectare farm with mechanized
farming systems and a modern processing line.
The medium sized companies are also considering investing in equipment and machinery
that will improve productivity. They are trying to form groups with local farmers and give
themselves the capacity to invest in machinery and equipment which would be unaffordable
as individuals. One such group is being led by Mar e Pesc and they intend to bring together
14 likeminded producers.
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14 Social
The mussel industry was originally designed to help local fishermen by providing them with
an additional source of income. It was also a way to ensure that the locals would remain in
their community and not migrate to larger cities for livelihood.
Although the government and EPAGRI have established formal associations for mussel
farmers, they are non-functional. The farmers are not united and compete with each other
for customers, farming spots and rafts. Some likeminded farmers have formed informal
groups and have pooled resources. These farmers understand the advantage of pooling
their resources together and are now trying to leverage their combined strength to get
better terms from suppliers and service providers and also buy equipment collectively.
The mussel industry was also seen as a means to provide women with financial
independence. This is reflected in the government program PRONAF Women and in the way
the cultivation spots are allocated (i.e. giving independent farming spots to women). Also
most jobs in the association are reserved for native women.
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15 Technological
15.1 Seed Cultivation and Reducing Mortality
Some companies procure cultivated seed from a company called Blue Water that is run by a
professor from University of Santa Catarina. To further reduce the mortality rate of the
seed, companies use containers in the sea to fatten the seed before they are put on the
rope. This is a method developed by one of the medium sized farmers, Atlântico Sul.
15.2 Equipment and Machines
Most machinery and equipment bought by farmers and medium sized companies are basic
and are procured from local vendors. Some of the farmers interviewed admitted that they
did not have sufficient information on machinery or equipment available for mussel
farming.
Some of the items available locally are buoys, cables, collectors, etc. Each buoys (Bombonas
- mostly empty chemical container) is available for R$ 6 per piece. Cable used for growing
mussels is sold for R$ 4 a meter and collector cable is also available for R$ 4 a meter.
The farmers need both rafts and boats to collect mussels. The raft has a motor and
measures 48 square meters. It cost about R$ 82,000 (approximately CAD$ 33,000). The boat
is smaller than the raft and is approximately 5 meters long with a 5 horsepower motor in
the rear which costs R$ 5,000 (approximately CAD$ 2,000). One of the farmers interviewed
shared that the group of farmers he was associated with had two rafts and one boat. One of
the rafts was provided by AVINA, a Not-for-Profit conservative organization and the other
was acquired by the local association (not formally formed) of producers, with the help of
city officials. The raft was produced in Curitiba and the boat was produced locally
(Florianopolis).
One medium size operator designs and fabricates its equipment and machinery including
seed grading machines, de-clumpers, cleaning machines and de-shelling machines. They
have bought a table to de-shell mussels from a local fabricator Metalurgica Acaccio
(www.asacio.com.br), an industrial kitchen producer. Interestingly, the company could not
get any ready equipment or machinery locally and did not have a large enough line of credit
to import equipment and machinery from overseas. Another medium sized company has
been adapting machinery from the agricultural industry. Also, companies in this sector face
a challenge in recruiting locally trained individuals.
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16 What Can Be Improved
There are several areas where there can be substantial improvements. The areas that are
being looked at are:









Mechanization of farming
Mechanization of the processing
Seed production in the laboratory
Greater control of the processing and distribution chain and imposing mandatory
sanitary inspection for all producers. The lack of sanitary controls are currently due
to lack of standardized procedures, manual processing and illegal seed trade
Increased levels of productivity
Increased seed availability
Development of more innovative products
Promotion of mussels locally and internationally, including branding of the product
and the creation of a certificate of origin
Implementation of processes to certify products as both “organic” and “fair trade”
There are opportunities in the mussel industry, including adopting mechanized systems,
producing seed in the laboratory, processing mussels and adding value by transforming
them into ready to eat products and also providing the industry with services, equipment
and supplies. Also services like technical assistance, training, mechanized services,
processing their mussels as per SIF standards, etc. can be provided to small farmers.
Figure 6: Rudimentary Buoys in Santa Catarina Waters
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17 Imports in the Mussel Industry
Cables/rope used in cultivation and seed collection are imported from New Zealand by a
Santa Catarina company specializing in providing equipment and services for aquaculture.
Although the New Zealand company faces competition from other companies that belong to
mussel producing countries like Chile and Australia, their cables/ropes have the largest
market share. While there are similar products in the domestic market the New Zealand
cables/ropes are far superior in durability and productivity and their price is very
competitive.
A distributor for aquaculture equipment shared that up until now, he has seen very little
demand for equipment for mussel farming and processing. However, he foresees a new
phase and resulting increase in equipment needs with the new allocation of production
areas for the mussel industry. He shared that the government is keen on supporting and
encouraging farmers to adopt technology and equipment in farming and thereby improving
the efficiency and yield of the crop. He does not see prospects in importing boats, as he
believes that the local manufacturers can modify their boats to suit the needs of the mussel
industry. There seems to be a consensus that technology and laboratory equipment for
production of mussel seed may interest local companies. Also, stakeholders interviewed felt
that the future of mussel farming automation is in adopting the long line continuous system.
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18 Perception on Use of Canadian Technology
For the mussel industry, a product from Canada that could be useful in Brazil would be the
tubular mesh networks with embedded cotton, as marketed by Go Deep International.
(http://hermes.mbl.edu/mrc/research/pdf/gdi_mussel_presentation11.pdf)
Canadian technology can also be useful in marine fish farming, oyster farming and
pectinicultura (cultivation of scallops). Stakeholders felt that the knowledge and technology
from Canada would benefit these areas more than mussel farming. Canada has extensive
experience and expertise in these areas and various technologies which can be used in
Brazil.
Some stakeholders believe vessels, intelligent cultivation, debyssers, etc. or any equipment
that addresses the demands from production to processing could be imported from Canada;
however, they felt that Canadian companies would have to provide suitable technical
support, warranties and competitive pricing.
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19 Market Entry Recommendation for Canadian Companies
A Canadian company can enter the Brazilian Market in one of the following three ways

Joint Venture

Direct Investment

Technology Transfer
Forming a joint venture with a Brazilian companies and technology transfer would be the
two most viable options for Canadian companies to enter Santa Catarina’s mussel industry.
As the industry is currently in early stages of development (compared to the capability and
production levels of other major world producers) the speed at which the market would
absorb new technologies would be quite slow. This implies that any company entering the
market would need to wait several years before it can expect to get substantial revenue
from the sale of its products and services in this sector. Considering the market scenario, a
joint venture or technology transfer route is advisable at this time. However, if a company is
interested in producing or processing shellfish then they could consider investing in a
Brazilian company already in Santa Catarina. There is a large company that is looking for a
partner with experience and expertise in the mussel industry.
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Section C: Literature Review of PEI Industry
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20 Introduction – PEI Mussel Industry
Prince Edward Island is a center of excellence for aquaculture and suppliers to the industry.
Prince Edward Island shares this reputation with other provinces in the Maritimes as the
aquaculture industry in Atlantic Canada is a dynamic system of food production that is
driven by producers of shellfish and finfish. The industry is supported by world-class
research and development facilities, suppliers that manufacture everything from boats to
processing plant equipment, industry associations that provide a strong voice for the sector
as well as governments that recognize the value of the industry and work together with key
stakeholders to promote opportunities for growth 116.
Prince Edward Island’s mussel industry contributes significantly to the PEI tax base,
contributing conservatively approximately CAD$ 30 million in gross value added to local
economies annually. The industry is also a vital component of the Island economy providing
approximately 1,500 direct jobs. Many of these jobs provide year round employment in
local, rural communities. In 2011, PEI’s aquaculture industry paid approximately CAD$ 11
million in salaries, wages and employer contributions 117.
The Prince Edward Island mussel industry is Canada’s top producer and exporter of rope
cultured blue mussels. PEI has earned its reputation for high quality standards based on the
diligence and pride of Island growers, processors and industry stakeholders. Present day,
there are approximately 110 mussel leaseholders on PEI who farm 317 leases equating to
11,233 surface acres. More than 50 million pounds of mussels were produced in 2012 and
exported dominantly throughout Canada, the United States and Europe 118.
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21 Growing Mussels
Mussel production is a customized business in that there is significant diversity around the
world in how mussels are grown and harvested. Mussels are native to PEI and the species
grown is Mytulis edulis. Mussel meat is gender specific. The female mussels are orange/pink
while the male’s mussel meat is almost white119. The bulk of mussel aquaculture activity in
PEI occurs in 25 bays and estuaries with a concentration in the Eastern sections and
Northern coastline of the province. The mussel seed is collected using seed on collector
lines. Mussels are raised on these lines or ropes suspended off the sea floor and are
harvested to the surface by boats. PEI mussels are filter feeders and obtain all their food
from the natural aquatic environment 120. From inception, PEI mussel farmers have had to
carefully consider their specific growing environment and adapt methods and techniques
that suited PEI waters. The cool fresh waters of PEI’s bays and estuaries provide optimal
growing conditions for farmed blue mussels.
Taking between 18 to 24 months to reach market size, mussels are farmed during every
season including the winter when many of the bays and estuaries are covered in ice. PEI
mussel processing is an important component of the industry. Processing activities such as
cleaning, holding, grading, packaging and quality control processes have set the standard for
the North American mussel industry. The suspended culture system in which mussels are
grown is one of the most environmentally friendly forms of aquaculture and provides a
sustainable foundation for industry growth and development.
22.1 Techniques and Growing Methods
Developing good cultivation methods suitable to the North American seasonal climate was
the first challenge in establishing mussel farming. Drops or socks suspended on lines (long
line system) was deemed to be the most favorable method that suited PEI sheltered bays
and estuaries. The suspended long line system is the culture method utilized throughout the
province. There are minor differences between farms, mostly to do with the length of the
long lines, the type of anchorage and flotation and the length of the socks. The size of a
mussel farm is measured in lines, a line being 100-200 m of 12 mm polypropylene rope
(backline) held near the surface by buoys and anchored at each end by 350 kg cement
anchors or helical screw anchors121.
The abundance of natural mussel seed and an excellent growing environment have
contributed to secure Prince Edward Island as one of the top mussel producers in the world.
In PEI, the mussel species grown is better known as Island Blues and are distinctive because
of their glossy blue blackish shells and plump, grit-free meats. Mussel growing and
harvesting is a year round business and has grown steadily since its inception in the late
eighties. The Island industry has perfected techniques over the years as knowledge and
experience have combined to assist farmers and processors with crop care and
management and growing a marketplace appetite for this healthy protein.
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22.2 Seed Collection
Mussels grow in PEI in abundance. Each female releases as many as 20 million eggs in the
spring, which float in the ocean waves, get fertilized and then latch onto mussel farmers'
collector ropes, where they continue to grow to maturity as they would naturally 122. “A
mussel farmer's production schedule usually begins with setting out seed collectors in the
spring of the year. Seed collectors are usually frayed pieces of rope or strips of plastic mesh.
Collectors are attached to the main buoyed line (backline) 30-50 cm apart and weighted to
keep them vertically suspended in the water column. The collectors serve as a settlement
surface for the billions of mussel larvae that swims naturally in the water. Growers keep a
close eye on their lines as the mussel seed grows and add extra floatation to the backlines
as needed to avoid mortality by predators or fall-off during storm events”123.
Mussel growers prefer using graded larger seed to ensure more uniform growth of the
mussels at maturity. Some growers have used wild seed harvested from natural beds on the
river bottom. Collection of seed from these beds during spring and fall is conducted under
licenses issued by the Department of Fisheries and Oceans.
22.3 Mussel Harvesting
“After 18 to 24 months the mussels reach a marketable size of 55-60 mm. At this point
harvest-ready long lines can contain upwards of 2 tonnes of mussels each. In winter, bays
and estuaries are covered in ice (upwards of 125 cm or 4 ft). As a result, mussel long lines
are sunk approximately 2-3 ft below the surface. Lines destined for harvest over the winter
are marked with ice-poles” or GPS markers. “Specialized techniques are used to harvest
mussels through the ice. Growers use chain saws and special blades to cut through the ice.
The line is hauled up through the ice by a portable winch. Mussels are cut by hand from the
long line and stored in insulated plastic boxes that protect the product from wind-chill.
During the rest of the year, mussels are harvested in open water by boats equipped with a
boom and a hydraulic winch. The backline is partially lifted out of the water and the socks
are cut from the backline and hauled into the boat. To minimize losses, the boat may be
equipped with an aluminum chute to guide the long line and socks onboard. There is no
quota placed on mussel farming which ensures that the supply stays constant. Mussels are
harvested to order and shipped when orders are received”124.
22.4 Processing
“Once harvested, the vast majority of mussels are transported to federally inspected
processing plants where they are stripped from the sock, de-clumped, washed, graded and
have their beards (byssal threads used to attach to substrates) removed. The mussels are
inspected and any broken or substandard shells are removed prior to being packed for
shipping to markets all over North America. Currently there are seven federally registered
mussel processing plants”125. These processing plants are state of the art facilities that
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contain many equipment and design inputs originating from PEI suppliers. The emergence
and development of the PEI mussel industry at farm and processing level have enabled
Island companies in other sectors to align their skills and capabilities to meet the evolving
supply needs of the industry. With the industry having a dominant rural area presence, the
direct spin offs to other businesses that supply the industry has been particularly important
in coastal rural PEI. The mussel sector is relatively capital intensive, thereby providing
further spin-offs to local manufacturing, fabrication and repair businesses as examples. The
breadth and diversity of sourced inputs for mussel aquaculture are expansive.
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23 Environmental Protection, Stewardship and Sustainability
PEI mussel producers have excellent farming practices that optimize the health of mussels
and demonstrate the sustainable nature of mussel production. Great care goes into
operating practices and use of equipment to protect the animals and the environment. Also
a lot of care is taken to preserve the environment surrounding mussel farms. Rope farming
also helps improve the ocean environment by creating a man-made reef that improves
biodiversity below it. Production methods such as dredging that disturb the ocean floor are
not practiced. The industry follows extensive site selection procedures and integrated
coastal management planning with coastal stakeholders. Mussel farming is endorsed by
environmental groups such as the Monterey Bay Aquarium’s Seafood Watch, Audubon,
SeaChoice, Oceanwise and Eco-Fish.126
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24 Building an Industry
The PEI mussel industry has evolved to be a recognized brand of quality in the North
American marketplace and beyond. PEI mussels can be routinely found on many restaurant
menus and within retail stores, chains and supermarkets in the US, Canada and other
countries. Although a significant percentage of mussels sold are fresh into the foodservice
market, other mussel products have emerged including frozen mussels with sauces and
fresh mussels at retail with modified atmospheric packaging to extend shelf life. The
industry began experimentally in the late 80’s as a number of entrepreneurs saw the
nutrient rich, protected Island bays and estuaries as conducive for growing high quality
shellfish. With entrepreneurial vision and support from an enabling provincial government
interested in investing in industry diversity and economic development, the industry
flourished from inception. From its humble beginnings, the industry has grown over the
course of its thirty year history with a steady and sustainable increase in production and
sales.
24.1 Growing an Appetite for Mussels
The organization of collectively marketing PEI Mussels has evolved significantly in the past
decade with market savvy PEI processors and the cooperative efforts and establishment in
2009 of the Mussel Industry Council (MIC). The MIC acted as an association of processors,
producers, and industry groups that joined forces to promote mussels in the midst of
growing demand for mussels in North America. One of its central goals was education and
providing an essential link between producers, consumers and chefs educating about many
things including mussel safety, nutrition, versatile uses, handling, cooking and preparing. 127
The organization has evolved present day to generically promote and increase awareness of
delicious, healthy PEI mussels. Significant market knowledge and branding expertise exists in
the sector and is considered a key strength within the industry. Supplier companies that
support these efforts have accumulated marketing knowledge and expertise concurrently
with the growth and success of the sector.
24.2 Leasing
The Federal Department of Fisheries and Oceans Canada is the lead Federal Agency in
regulating Aquaculture. Various Federal and provincial government departments have a role
in managing land and water use in aquaculture where the activity takes place in the water
or uses the sea or lake bed for cultivation or anchoring of containment arrays. A Crown
lease, tenure or permit of occupation is issued by the provincial government or territory in
all provinces, with the exception of Prince Edward Island where Fisheries and Oceans
Canada issues leases. The PEI Aquaculture Leasing is a division under the Federal
Department of Fisheries and Oceans. It is the only Aquaculture division in Canada that is
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administered by the Federal Government. In terms of PEI’s total aquaculture leasing
footprint, the division leases approximately 1200 sites covering almost 19,000 acres 128.
24.3 Food Safety
Canada is recognized globally as having a robust, comprehensive food safety system that
provides stringent oversight of its food production systems. The Canadian Shellfish
Sanitation Program is a federal food safety program jointly administered by the Canadian
Food Inspection Agency, Environment Canada (EC) and Fisheries and Oceans Canada. The
goal of the program is to protect Canadians from the health risks associated with the
consumption of contaminated bivalve molluscan shellfish129. Under the Canadian Shellfish
Sanitation Program, the Government of Canada implements controls to verify that only
shellfish that meet food safety and quality standards reach domestic and international
markets. Canada’s expertise in food safety systems has contributed to a responsibly
managed industry that exemplifies the highest standards, verifications and controls. Strict
seafood safety policies, regulations, inspection standards and initiatives, including a quality
management program, ensure mussels are kept free of foreign organisms and harmful
bacteria and toxins 130.
PEI and in fact Canada’s food safety system is a partnership between the industry and
government that is considered world class. The expertise that has developed around food
safety can be seen in many areas of the private sector. In PEI, there is a knowledge base
that exists in the field of food safety. PEI companies are well versed in Quality Management
Programs as all federally registered plants are required by law to develop and implement an
in-plant quality control program. These programs employ an internationally recognized
science-based control system that ensures that all aquaculture products conform to the
highest safety standards. In support of this operational requirement, this knowledge can be
found throughout supply services in software systems, management and operational
consulting, training, inspection and audit services, systems monitoring and evaluation.
Program managers, inspectors, biological and environmental expertise are only a few
examples of the human capital and acquired knowledge Canada retains in this area. This
knowledge and expertise is core strength of the PEI mussel industry and those industry
suppliers that support these efforts.
24.4 Monitoring
Prince Edward Island’s mussel industry is closely monitored with a formalized monitoring
program provided to cultured mussel growers and processors by the PEI Department of
Fisheries, Aquaculture and Rural Development. The Program has operated annually since
1982 during the ice free season providing mussel growers with a variety of information to
assist them in the management of their farm operations. This monitoring program is
considered a valued service and focuses primarily on mussel spat fall prediction, mussel
meat yield analysis, water temperature evaluation, the detection and estimation of the
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numbers of potentially toxic algae species and the monitoring of predators and fouling
organisms. The program also provides mussel processing plants with information such as
mussel meat quality at harvest which assists the processor in providing the consumer with a
quality product 131.
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25 The Evolution of the Aquaculture Supplier
With the growth of a new industry, the need for a variety of supply inputs was established
early on. The Island had a variety of supply companies that were experts in providing goods
and services to other industries such as agriculture, lobster processing and others. Many of
these companies, successful in their own right looked at aquaculture as a prospective
industry to modify and adapt its expertise in an effort to provide solutions and capitalize on
new business opportunities. Over time, many of these companies learned and adapted
their specializations to provide products and services to the PEI mussel industry. As the
industry grew, the diversity of product and service needs grew as well. Recognized clusters
of expertise in the aquaculture services sector began to emerge including custom
equipment fabrication, farm systems knowledge, design and development of mussel
farming and processing equipment, design and engineering expertise and boat building
amongst others. An inventory and knowledge base in products and services has further
evolved as our expertise within the mussel industry has accumulated. Over the course of
this evolution, some of these Island companies chose to grow and expand their businesses
and sought export opportunities for their specialized products and services. The mussel
industry’s desire to adopt innovative technologies to facilitate improved management and
operating efficiencies helped drive suppliers to find further solutions in partnership with the
industry. This entrepreneurial spirit and desire to expand and grow has acted as an
economic engine fuelling employment and new revenues into the province for the core
mussel industry and those that supply to it.
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26 Exportability of Supplier Expertise
As PEI’s mussel industry suppliers evolved and grew, so did their export readiness and desire
for International business success. Some PEI aquaculture supply companies have
successfully pursued International business development opportunities in multiple countries
around the world. One of PEI’s best known efforts in the development of aquaculture
supplier opportunities in South America are the current efforts that began in the late 1990’s
and 2000’s focused on Chile.
A number of PEI companies, fuelled by growth in the shellfish and finfish industries worldwide, focused their efforts on expanding their exports of seafood processing equipment by
developing niche markets for highly-specialized processing equipment132. Expertise with
equipment and systems in the areas of water supply, water filtration, water recirculation,
temperature control, disinfection and wastewater treatment were also exported. The
development effort focused on sharing the expertise Prince Edward Island had in the
shellfish and finfish industries opening up new doors for Island businesses that could
provide customized products in new markets. Trade shows such as AquaSur, Chile's largest
aquaculture trade show were regularly attended by select PEI supply companies. This show
offered exhibitors a place to showcase and sell their machinery, equipment and solutions to
the Chilean aquaculture industry and other jurisdictions.
Frequent visitation to the market to develop and nurture business relationships paid off for
a number of PEI aquaculture suppliers who expanded their international sales success in this
market. With the aquaculture industry continuing to grow around the world, PEI
aquaculture suppliers, with their latest technologies and expertise saw an opportunity to
strengthen its competitive position in international markets. Opportunities in Chile, Ireland,
Norway and other countries were pursued by suppliers and helped contribute to the export
growth of the PEI Economy.
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27 Acquired Strengths of Suppliers to the PEI mussel industry
27.1 Improvements in Process and Productivity
Mussel farms engage in a variety of processes from seed collection to harvest. Over the
years, PEI equipment fabricators have developed, through applying innovative design,
various pieces of equipment to assist with making these and other task less labor intensive
and more efficient. As examples, anchoring systems, spat collection and grading, declumping, escalators, socking tables, and unique modifications to boat and barge design
including use of hydraulics and thrusters have enabled the industry to improve its farm
based processes and logistics.
27.2 Innovative Solutions to Challenges
27.2.1 Crop Fouling
Shellfish farmers combat fouling on crops in a variety of ways including control and
avoidance and prevention. Fouling organisms are multiple and include barnacles, algae and
a variety of tunicates. Farmers have learned over the years what treatments work most
effectively for their particular situation. From lime application to pressure washing and
timing production cycles to maintain high growth rates, farmers have worked with some
supplier companies to deploy effective methods and products to mitigate fouling.
Innovation in pressure spraying, applying lime and brine treatments and other methods
have proven effective in helping manage these challenges. Through trial and error over an
extended period of time, an extensive knowledge of bio-fouling treatment methods and
mitigation measures have been acquired within the industry and is a core strength and
competency of the industry.
27.2.2 Vessels
PEI has a number of specialized boat building companies that over the years have supplied
fibreglass, aluminum and wooden boats to the commercial fishing and shellfish aquaculture
industries. Boat sizes for our size and scale of industry vary but have progressively increased
in size over the years as mussel production volumes have increased at farm level. Present
day, a popular mussel boat size is just less than 45 feet; however, there is variation in style,
size and form for mussel boats. In addition, smaller scale dories and boats are being actively
produced although not used in mainstream PEI mussel aquaculture in any substantive way.
A variety of boat designs are currently sold to multiple countries around the world for multi
species fishing applications. Many boat manufacturers in PEI also build and design for the
pleasure or recreational boating market and sell internationally into this space. Although the
sheer volume of boat building companies in PEI has diminished in the past decade, there is
still a small cluster of companies that build world class, quality vessels some of which are
used in the mussel industry.
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27.2.3 Training
A nucleus of training service providers exist in PEI that have customized offerings for
aquaculture. This knowledge base could offer some solutions based opportunities for
aquaculture in Brazil. Key areas of expertise in the training area include culinary focused
product innovation, marketplace research and assessment, food sanitation training for food
processing plants, food safety systems training amongst others. Under quality, safety and
regulatory services, the development of Hazard Analysis Critical Control Points (HACCP) and
the development of Quality Manufacturing Practices (QMP’s) are important tools for
effective food processing plant management. Knowledge transfer focused on sustainable
marine environmental management could also have application in the training space.
27.2.4 Commercial Diving Expertise and Acquired Knowledge
Another area of skills expertise is in commercial diving. Aquaculture requires some
commercial diving services for crop monitoring, inspection and maintenance amongst other
things. Diving and related marine services and products and skills training in these areas is
expertise that exists in PEI. Sector capabilities include various types of dive services, training
inclusive of online learning and diving product sales.
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Section D: Primary Research of PEI Industry
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28 Primary Research PEI - Methodology
Primary research was conducted with Prince Edward Island Mussel Industry suppliers to
further explore company product or service offerings, their export growth capacity and
overall potential interest in Santa Catarina, Brazil as a new market of supply opportunity.
Twenty one (21) companies were interviewed via a combination of face to face and
telephone interviews. Those selected for interview were chosen based on a number of
research criteria that included product and service diversity, consultant team knowledge
and previously expressed interest in Brazil from documents provided by Trade Team PEI and
availability for an interview during the primary research period. Interviewees were assured
of confidentiality and told that individual company information collected for this research
would be gathered, analyzed and aggregated for the purposes of mapping potential product
and service matches. It was clearly communicated to companies that their participation in
the research was voluntary. It was also shared that highlights of the research results will be
summarized and shared by Trade Team PEI at a future time. As a point of interest, all
requests for interviews were warmly received and granted. Suppliers were pleased to assist
through research participation to enable Trade Team PEI in better understanding potential
opportunities for PEI supply companies in Santa Catarina, Brazil. A list of participating
companies is compiled within the report as Appendix 1: PEI Supplier Companies
Interviewed. This list should not be construed as companies of priority but rather
companies selected from a larger pool for primary research purposes. Additional PEI
companies that supply products and services to aquaculture have also been identified
through the secondary research effort. Present day, these companies may be well
positioned for export growth and have interest in an emerging mussel industry in Brazil.
Interviews were conducted on a one on one basis with results analyzed for common
themes, significant findings and insights. A synopsis of interview outcomes are listed below
that includes significant feedback received in key areas of the Interview Guide. As noted in
the research plan, the interviews were qualitative in nature and unstructured allowing a free
flow of information. Guidance was provided with key questions posed to facilitate important
information sharing. Common themes, significant findings and insights from the PEI
Supplier interviews are captured below. It should also be noted that major themes are
identified but not necessarily expansive and all-encompassing of every product and service
offering to aquaculture.
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29 Confirmed Interest in Growing Exports Internationally
A significant majority of PEI suppliers interviewed confirmed they were interested in
growing their businesses internationally. This is very positive news. It was noted, however,
that only a small majority of companies interviewed have dedicated employees solely
focused on international business development. Smaller firms in particular noted they ramp
up their labor force to service growth and new business once orders are confirmed but do
not always have the financial luxury of engaging people to drive new business before the
orders are realized. Often the business owner or general manager does the prospecting
and business development as a first step. With confirmation of opportunity and successful
project development, firms will ramp up if needed to address the incremental work. In a
labor market that has plenty of available people with key skills and experience, this
approach can work. It was identified by some companies that they are experiencing a
growth constraint as a result of labor and skills shortages being experienced in some areas
of business. This is an identified constraint by some interviewees and varies in applicability
depending on their area of specialization, scale and size of companies, physical location of
the business and other factors. Another common comment heard was the expressed desire
of companies to have more effort and resources for conducting market research and
prospecting to facilitate good decision making in assessing a market for opportunities.
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30 Plans for Expansion
Although there are identified constraints, approximately half of the companies interviewed
talked about their desire to grow their businesses to fully utilize their existing capacity.
Further, building onto their existing production facilities or adding capacity with an
additional building to accompany anticipated growth over the next couple of years was
mentioned repeatedly. This is a very positive indicator and certainly conveyed a sense of
optimism in the sector. This underscores the importance of addressing any constraints to
business growth that may exist and determining how to reduce these barriers. How well
companies manage these challenges will combine to have a direct impact on a company’s
ability to expand.
Companies interviewed offered a diverse picture of the degree of challenge around
recruiting and retaining labor. Some companies are not experiencing labor challenges while
others stated clearly that they were. In one interview, an equipment manufacturer stated
that almost 80 per cent of their sales are exports outside of Canada. Their plan is to
continue to grow their export success by seeking new business opportunities. This will drive
the need for additional plant space, equipment, designers, engineers and skilled craftsmen.
In this case, the company is projecting to hire an additional 30-40 people over the next five
years.
In a number of cases, some companies identified a lack of investment capital to finance
export market development on an ongoing basis. This could represent an opportunity for
lenders and government partners to seek creative ways of supporting companies in their
International growth plans.
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31 International Experience of PEI Suppliers
With quality products and a determination to meet customer needs, PEI Aquaculture
suppliers are demonstrating that Island companies can compete and succeed in world
markets. Many of the companies interviewed confirmed they are actively exporting outside
the Country and have experience in doing International business. It was noted by a number
of smaller firms interviewed that their business is not actively developed with a physical
effort on the ground in markets but rather word of mouth referral, competitive pricing,
commitment to quality and a decent web site all combine to drive quotes and orders. In
some cases, smaller to midsized suppliers mentioned they were usually steady to very busy
but rarely had slow periods. Aquaculture suppliers in PEI by and large are seeing modest but
consistent growth on an annual basis. An impressive number of markets are currently being
serviced and supplied by these companies, some with very diverse customer geographic
portfolios. For some companies, this evolved from a conscious market development effort.
For others, these orders were truly unsolicited and simply came to them as a result of a
strong reputation for expertise and past dealings with existing, satisfied clients.
31.1 Knowledge of Doing Business in South America
Many companies interviewed had limited knowledge or any previous experience in doing
business in South America. There were a few exceptions, namely a select few who have
done business in Chile with the mussel and finfish aquaculture industry there. All
interviewees were asked specifically about their perceptions of doing business in South
America and specifically Brazil. In summary the dominant perceptions included some
observations categorized as follows:
31.1.1 Political
Questions about the stability in the country for transacting business and getting paid was
referenced by many interviewed. Clearly, many companies interviewed demonstrated an
aversion to risk and reflect that in their market selections and International payment
policies and terms. Many people interviewed wondered about the level of political
interference and bureaucracy in business if at all that may exist in Brazil. A number of
examples were cited that referenced direct political interference and protectionism being
experienced in other Latin American countries with resulting delays in shipments at
customs. There appeared to be minimal knowledge about existing Canadian companies
doing business in Brazil.
31.1.2 Economic
Costs associated with the geography of Brazil relative to the travel or distance from PEI to
service the market well was cited as a key factor that companies would have to consider. It
was mentioned that travel to long distance markets is expensive and time consuming. There
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would have to be a clear business case to making this financial and time commitment.
Having said that, at least half of those interviewed suggested they would be willing to visit
the market to gain a better understanding of product and service match opportunities
should initial research confirm some opportunity.
31.1.3 Competition
Another concern cited was the lack of ability to compete on price with European and
Chinese product or service suppliers in various International markets and our own domestic
marketplace. It was relayed that Chinese companies in particular are materializing in many
competitive markets including Canada. Despite China being a huge domestic market that
could absorb their supply, it was shared that Chinese companies desire the prestige of being
known internationally and are very aggressive with pricing and marketing to achieve this.
Some companies interviewed shared this has been a determining factor in understanding
where they can win and entering a busy, competitive space may have its challenges.
Clearly, a competitive assessment of the Brazilian marketplace on a company specific basis
would be an important first step in understanding if there is a real opportunity to be
competitive and ultimately successful supplying mussel aquaculture in Santa Catarina.
31.1.4 Social and Cultural
Concerns about personal safety in doing business in Brazil were expressed. Other concerns
referenced included whether the Portuguese language could be a significant barrier to
communications. It was noted that in absence of English being the dominant language, this
may impede a company’s ability to develop relationships effectively without an
intermediary. Further, translation services could act as an additional cost to doing business
there. There was some acknowledgement by a few interviewed that they felt Brazilians had
an overall positive impression of Canadians and that this would likely be a positive in the
beginning stages of relationship building.
31.1.5 Technological
Questions concerning how developed, sophisticated or rudimentary the farm and
processing side of the mussel business is in Santa Catarina was a continuing discussion
theme during interviews. Clearly interviewees were considering what practical solutions
could be provided to the industry there and on what scale. The right size, right solution,
right time were cited as important points of evaluation for some companies providing
technical solutions within an industry. Many companies interviewed suggested that it would
likely be a challenging place to protect intellectual property of equipment design as an
example. The idea that technology would be taught or transferred from PEI to facilitate
future local Brazilian manufacturing of equipment, packaging, etc. was surmised a number
of times by interviewees leaving companies to contemplate if this was a desired entry
strategy and outcome.
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31.2 Institutional Partnering and Collaborations
With a history of strong institutional partnering within academic, research and
commercialization centres, PEI is a center of cluster excellence. Academic and private sector
training and education centres offer extensive hands-on experience for those wanting to
learn about aquaculture. Best in class examples of this expertise include Holland College and
the University of Prince Edward Island, home to the Atlantic Veterinary College established
as a learning institution, research centre and service provider with expertise in aquaculture
and fish health. Responsive to industry needs, Holland College as an example have offered
an Aquaculture Technician Program and a Commercial Diving Program as part of their
training curriculum.
With PEI’s research and innovation expertise in Aquaculture, there is a clear opportunity to
develop collaborative agreements and partnerships with institutions in Brazil. Our
institutions have extensive experience in International collaboration and expertise sharing
and have actively pursued Memorandums of Understanding with other institutions to
generate mutually beneficial activities. These Memorandums have guided activities for
faculty, staff and student exchanges, joint research activities and publications, and
participation in seminars and academic meetings. With an established network of research
and academic institutions in Brazil, there is a clear opportunity to pursue academic
cooperation agreements focus on promoting academic, scientific or technologic cooperation
and a sharing of knowledge and joint activities in areas of common interest. Other areas of
opportunity could include the development of collaboration agreements that provide
technical assistance to the industry and generally include supervision, training and transfer
activities. A full exploration of prospective Institutional linkages will help prequalify if there
are real opportunities for future agreements for PEI Institutions.
31.2.1 Food innovation and Commercialization
PEI is home to a number of institutions that combine expertise linking state-of-the-art
equipment and commercialization centers, scientists and technical experts, laboratories,
pilot and commercial facilities and analytic, processing and packaging expertise. Food
technology product and process development, integrated services such as shelf-life studies,
equipment assessments, sensory evaluations, and private innovation workshops for clients
are only a sampling of the types of services available to aquaculture and other food sectors.
These service specializations have led to the development of some international projects led
by PEI Institutions such the BIOFOODTECH and Holland College or The Culinary Institute of
Canada. From food safety to value added product development, these internationally
recognized facilities contain knowledgeable, accredited, professional staff that could play a
supporting role with private sector project development in Santa Catarina.
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31.2.2 Food Safety Systems Expertise
As identified through the literature scan, Canada is recognized globally for its expertise in
food safety systems. This expertise has contributed to a responsibly managed industry that
exemplifies the highest standards, verifications and controls. This knowledge and expertise
is a key strength within the PEI shellfish and finfish industry and exportable on a number of
levels. Program managers, inspectors, biological and environmental expertise are only a few
examples of the human capital and acquired knowledge PEI retains in these areas. This
public sector expertise has evolved private sector service development with resulting
companies that have specialized knowledge in these areas to support systems compliance
within farm and processing operations.
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32 Industry Needs Driving Supply to Aquaculture
Heard repeatedly throughout interviews was the acknowledgment that the business growth
in aquaculture supply happened in part due to growers and processors seeking supply
innovation and product adaptation as they sought solutions for their operations that would
bring increased efficiencies and productivity. A desired resulting benefit was farm and
processing operational improvement and a reduction in the sheer physical and laborious
demands of the work on farm and in plant. They came to us and we found a solution
together was a common comment heard. What is interesting about this is that it clearly
identifies some companies did not aggressively initiate the business but rather, the business
came to them. This is noteworthy as it may have some influence in how proactive a
company will choose to be in the pursuit of opportunities for export. This was not the case
for all companies. Clearly, some companies interviewed were proactively identifying,
pursuing and developing business opportunities locally and in export markets inclusive of
the aquaculture industry.
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33 Variable Interest and Cautious Optimism
The mix of supply companies in PEI delivers a broad range of companies with varying
degrees of export experience, international growth plans and capacity. It can only be
described as variable in terms of the collective interest specifically in Brazil as a market of
exploration and potential future opportunity. Ranging from no interest to marginal to
significant interest, there is a mixed view of Brazil and its corresponding opportunities.
Demonstrating low risk, tangible opportunities that companies can cost effectively realize
would be an accurate description of expression from a multitude of companies interviewed.
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34 Pursuing Market Development and Methods of Entry
There were many thoughts shared by those interviewed regarding their current approach to
export market development and it is clearly diverse. From “the orders come to us
unsolicited” to “we have diligently worked on the ground in a market for multiple years
before we realized any tangible results”, there are a broad range of models and approaches
to international business development. A suggestion heard multiple times during interviews
was that a consortium or cluster approach with a dedicated person representing the cluster
in market development is a potential approach that may have some merit and be worthy of
exploring. Company feedback on how they might approach market development in Brazil
suggests that a cluster approach would have to be non-competing within itself and may take
some considerable time and effort to establish. Another suggestion heard was that Island
companies interested in pursuing opportunities could be represented in a PEI products and
services catalogue that could be marketed on line and on the ground to the Brazilian
aquaculture industry, institutions and government agencies.
34.1 Importance of Evaluation on a Company by Company Basis
With a range of diversity in company products, services and export desire and interest, it is
important to recognize the value of visitation to the market to increase knowledge and
familiarity and identify future opportunities. Interviewees cited a desire to become familiar
with key industry players, scale of any actual opportunities, the competitive landscape,
cultural nuances, import processes to Brazil and tariff and or tax implications as a beginning.
Some companies interviewed suggested frequent market visitation in the mid to long term
wouldn’t be desired to develop business but alternatively they would be interested in
seeking quality relationships with an in market distributor or agent who could represent
them in the market following confirmation that there is adequate opportunity for them to
pursue there. Clearly, with confirmation that there is a business opportunity, suppliers
suggested they would need to conduct company specific research that quantified the size,
scale and volume of opportunities before committing to a dedicated market entry strategy
and accompanying investment.
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35 Inventory of Product or Service Offerings
The vast majority of PEI suppliers to aquaculture are companies that supply to multiple
industries. This is an important observation in that for many companies, aquaculture is one
stream of their product and service offerings and not singularly a core focus. The evolution
of aquaculture in the province provided many companies with a sector diversification
opportunity for their existing products, services and expertise. This “adaptation” and
pursuit of local business has allowed companies to evolve their knowledge and expertise
supplying mussel aquaculture across a diverse range of services or products. Categories
with multiple companies supplying aquaculture include boat building, processing
equipment, engineering, design, plant systems and fabrication expertise, research, science,
food safety and innovation expertise, commercial diving and packaging. Within cluster
categories and beyond, there is a nucleus of human knowledge and expertise in these areas
and beyond. Many experts have the capacity to supply knowledge transfer in multiple
forms. Technology transfer, teaching, training and overall consulting in multiple areas are
all distinct possibilities for companies that desire to export their expertise. Beyond
categories with multiple service and product supplies, there are companies that provide
unique specializations that may not have a cluster in this service area. Dominant supply
categories that emerged from the project research include the following:
35.1 Engineering and Design Expertise
A nucleus of engineering and design expertise exists in companies in PEI that have created a
cluster competency in designing and manufacturing equipment and systems for mussel
aquaculture. These core engineering and design services have delivered custom fabrication
and on-site installation and commissioning services for mussel processing plants
domestically and internationally. Best in class engineering teams, certified technicians and
fabricators combine to deliver a valuable product and service offering to food processors.
35.2 Custom Fabrication – Metal Works
From custom conveyors to barges, there is a multitude of custom equipment being built for
shellfish aquaculture producers and processors by suppliers across the province. These
companies are innovative and continue to expand their work in aquaculture as the industry
grows. Many of these companies provide services to aquaculture in other provinces and
states and in some cases, to other countries. Many of these companies reported
aquaculture is an important part of their business and are interested in growing their
opportunities in supplying aquaculture sectors in other places. As examples, two businesses
had just completed an expansion of facilities and shared they had capacity to take on more
work. Some companies interviewed exhibited cautious optimism about future potential
opportunities in Brazil. One company suggested that although they are well subscribed with
local business, they are planning for succession and the next generation entering the
Page | 66
business may have some desire to drive incremental growth in new markets. Present day,
these companies are entertaining the potential for a future expansion to facilitate this to
happen. It is important to note that many of these companies also have a working expertise
in oyster aquaculture, another species in production in Brazil and targeted for further
development. The verticals of supply to the mussel and oyster industries are in some cases
integrated. Without question there are species specific processes, methods and gear,
however, there are many products that evolve from custom shops that can apply to both.
Salt water growing environments present common challenges and tend to drive use of
materials such as stainless steel, aluminum and nylon. Conveyors, brushes and a host of
other products and applications are developed by this innovative cluster on an ongoing
basis.
35.3 Boat Building Expertise
PEI boat builders are dominantly smaller family owned and operated businesses that serve
the Canadian and US Eastern seaboard and beyond with custom designed various sized
fiberglass, aluminum and wooden boats. Boat suppliers manufacture in both the
commercial and leisure markets and take pride in their craftsmanship and manufacturing
processes. Interview insights revealed that much of the boat building business done is
unsolicited with word of mouth being the dominant form of marketing. There was a
lukewarm response from boat builders generally suggesting they are working at a high level
of their total production capacity as it is. Other contributing comments were that they had
“closer to home opportunities” to grow their business which would likely be easier and
more cost effective to access. Although a small cluster, each of the companies in this space
is very specialized in their boat designs, sizing and respective supply capacities. Valued
information desired by the companies focused on information about the existing boats used
in Brazil by growers and others that utilize the water column.
35.4 Commercial Diving Expertise
A growing commercial diving industry exists in PEI and offers a multitude of specialized
diving services that mussel aquaculture in Brazil could require. Direct diving services offered
to shellfish farmers have focused on crop monitoring, anchoring, line identification and
lease layout configuration support. Supporting services to a broad range of multi sector
clients include underwater welding, underwater cutting, underwater video, digital
photography and training to clients in all aspects of services offered. Commercial divers are
used less often today in the PEI Mussel industry relative to twenty years ago as a result of
technological and equipment advances in the industry replacing some of the need for diving
services. The direct application for diver services in mussel farming depends on the growing
systems that farmers use amongst other things. Brazil’s existing infrastructure for mussel
aquaculture was an area of expressed interest in interviews. Training delivery for diving
certification is another dedicated service delivery that is offered online and could be
customized for sectors in other jurisdictions. Diver services, sub-contracting, general
Page | 67
contracting and working with regulators are additional core competencies we retain and
deliver in PEI. If and how this type of commercial work is needed and procured in Brazil was
of stated interest. Interview results and literature scanning confirmed that there is interest
in growing export business in new geographies to compliment and build on existing
business.
35.5 Product Packaging Expertise
Although PEI has a limited number of export focused companies that supply packaging to
International customers, there are a couple of suppliers that serve the aquaculture sector.
Multiple types of bags are manufactured here including leno mesh bags and boxes for
product packing and shipping. Packaging related products are also imported into PEI by
packaging companies to satisfy customer requirements. Packaging related machinery,
closing supplies, and pre-press printing services are all offered to aquaculture. Packaging
companies have indicated their desire to grow their businesses internationally and diversify
their packaging product mix. Some additional comments provided focused on the
importance of having export focused human resources to build international opportunities.
Building business management resources and skill sets internally in areas such as marketing
and quality certification are important steps in driving new growth for companies.
Conducting proper research in a market to determine competitive environment and
potential competitive advantage will need to be resourced and implemented as a first step
in determining real opportunity at a company level. Companies in this space were open to
Brazil market visitation and research collaboration to better define if they could be
successful in Brazil.
35.6 Services – Business Management and Development
Aquaculture Consulting and Project Management expertise is an area of service delivery for
PEI suppliers in Brazil. The need for knowledge and experience in an emerging industry
sector is diverse. As a result of over 25 years of growing and processing experience in
mussel aquaculture, PEI has a community of experts that have valued knowledge about
growing an industry profitably and sustainably. Some of these individuals operate as formal
consulting companies. Others are less formal in their structures and simply provide advice
and guidance when called upon through their extensive network of contacts garnered over
the duration of their work experience. From farming to cold chain logistics to international
marketing, all aspects of mussel aquaculture retain a knowledge base in PEI. As we consider
the acquired experience of PEI suppliers in many areas of aquaculture, we can’t ignore the
accumulation of project, business management, marketing and operations experience that
exists at both farm and processing levels. Across many facets of business development,
there are individuals and firms in the Province that could support the future growth of the
Brazil mussel industry. There are conservatively dozens of consulting companies and
individuals that could be clustered to offer a suite of non-competing expertise to the Brazil
mussel industry.
Page | 68
36 Quantifying and Qualifying the Opportunity
Companies are interested in knowing how and where the Brazil mussel industry sees itself in
the future in terms of size, scope and influence within production and processing.
Companies interviewed talked about the importance not only of the present day size and
structure of the industry but also equally important where the Brazil mussel industry is
going in terms of its plans for investment and plan for domestic and export growth and
markets of priority. Questions related to who has the ability and resources to invest in
products and services were identified during interviews. With confirmation of financial
resources being available, some direct areas of use or application might include providing
support to industry through:











Conducting oceanographic surveys and preliminary sizing of the farming structures
Preparation of business plans and assistance in project start-up
Assistance in identification and access to credit lines
Identification of investment funds for capital expansion purposes
Farm installation and management
Development and design of mussel processing plants and systems and equipment
within
Assistance in developing proposals to obtain grants from governmental agencies or
international organizations
Training at multiple levels from everything from food safety to lean manufacturing
Development of educational and marketing efforts
Development of packaging solutions
Assistance in the development of policies and frameworks for sustainable
development in mussel aquaculture
Asking PEI supplier companies their thoughts about a future role for PEI Government in
assisting Aquaculture Suppliers to develop international business produced robust feedback
from many interview participants confirming that they definitely see government playing an
active role in the identification and support to realize new opportunities specific to Brazil
business development opportunities. Specific suggestions from PEI companies related to the
areas of support they would see as important included and are summarized as follows;
1 Provide Market Research Support: Providing strategic advice on doing business in Brazil
and sharing intelligence on emerging opportunities. Share information about significant
barriers of all types that exist in doing business in Brazil.
2 Prospecting: Assisting with key contact searching and identifying Brazilian contacts who
have local knowledge.
3 Organization of a Market Visit: Providing practical advice on the preparation and timing
of potential market visits or business trips to Brazil. Some companies expressed some
interest in visiting the market to further learn and validate the marketplace as a
potential place to invest time and resources for future export growth. Some companies
Page | 69
suggested an initial visit to the market would be valued as a group effort with multiple
companies and support accompanying the visit.
4 Supporting companies financially: PEI companies desire financial support over a longer
term to qualify, quantify and develop new business in Brazil. The window for
development will take longer than traditional markets and companies appreciate
sustained support in this longer cycle of business development.
Page | 70
37 SWOT of PEI Mussel Industry
STRENGTH




Reputation of PEI as best in class global
producer of mussels
Creative, capable teams of people with an
impressive list of technical skills and
knowledge that service this industry and
have evolved and become expert as a result
Well versed and experienced in the business
side of mussel aquaculture. Executives at
every level of business exist in the labor pool
that could bring knowledge to international
projects If deemed a priority opportunity,
necessary financial resources can be
leveraged to participate in Brazil focused
projects
Relative to some foreign competitors, PEI
suppliers are smaller scale firms. This can be
a competitive advantage vs. a disadvantage
as the company is committed to a quality
product and service delivery with
personalized attention given to customers
WEAKNESS





Human resources are already strained out
over existing projects
Financial resources may be challenged to
invest in a new market with a longer
window Return on Investment
Geographically PEI is far removed from
the potential customer headquarters
Portuguese as a first language may
present some communication barriers for
dominantly English speaking suppliers
Lack of cultural knowledge of Brazil and
its way of doing business
OPPORTUNITIES







Potential for revenue increases
Potential for creating employment
opportunities
Potential for utilizing existing underutilized
production capacity
Engaging a project in Brazil would broaden
the experience portfolio and credibility as
international suppliers
Potential for collaboration and strategic
partnerships with other suppliers
New learning in working in a new market
for PEI
Increased market diversification for PEI
supplier companies
THREATS
 Careful to maintain service to our existing
customers while diverting some resources
to International project development
 Travel costs and time required to nurture
new business could be prohibitively high
and in the long run can seriously
undermine revenue increase
 Bidding process for new work is unfamiliar
and fear it could be a serious draw on our
financial and human resources
 While chasing opportunities in Brazil, PEI
can lose other lucrative technology
intensive projects
Page | 71
Section E: Analysis
Page | 72
38 Snapshot Comparison of PEI and Santa Catarina
SN Item
Prince Edward Island
Santa Catarina
1
Species and Brand
Mytulis edulis (Rope
cultured Blue Mussels)
Perna perna (no brand)
2
Inception of industry
Late eighties
1990
3
Industry Structure
Medium to large scale
commercial operations
Mostly small farmers
4
Stage of industry
Developed
Cottage industry
5
Vertical Integration
High
Low
6
Farming Method
Socks suspended on lines
(long line system)
Espinhaço is a local adaptation
of the long line system
7
Mechanization
Mid-range to advanced
Early stages
8
Time required for
growth
18 to 24 months
6 to 11 months
9
Seed availability
Abundant
Limited
10
Lease Holds
110
Over 600
11
Farming – surface
area
11,233 surface acres
525 hectares (1,298 surface
acres)
12
Production
50 million pounds
16,000 tons (32 million pounds)
13
Gross Value to
economy
CAD$ 30 million
CAD$ 20 million
14
Processing of Mussels
High
Quality Standards
Large part of the industry does
not have quality control
15
Jobs
2,500
1,500 direct
Page | 73
SN Item
Prince Edward Island
Santa Catarina
16
Salaries, wages and
employer
contribution
CAD$ 11 million
Mostly self-employed with help
from locals, by paying daily
wages
17
Capital Intensive
Medium to high
Low
18
Sustainability
Strong measures
Government struggling to put
measures in place
19
Associations
Well organized
20
Suppliers
Combination of domestic
manufacturing and imports
21
Supported by
Strong institutional
expertise and capabilities
EPAGRI and universities
22
Markets
Dominant: Canada, United
States and Europe
Local, mostly in the state of
Santa Catarina
Formal associations have
limited functionality. Some
informal associations are active
Few vendors sell cables,
adapted agricultural equipment
and buoys. Sporadic imports,
besides cables from New
Zealand.
Page | 74
39 Synopsis of Mussel Industry in Santa Catarina
Although the mussel industry in Santa Catarina is more than two decades old in most parts it
is in an elemental state in terms of technology, food safety and commercialization. The
industry was developed with an objective to provide livelihood to small farmers and natives
of Santa Catarina. The objectives have dominantly been met as the industry continues to
operate largely as a cottage industry with some exceptions. However, in recent years there
have been a few companies and progressive farmers who have realised there are beneficial
commercial opportunities and are taking initiatives to commercialize and professionalise
their operations and approach.
Smaller farmers use manual and old procedures to farm mussels. The same rudimentary
approach is extended to processing the mussels. Fearful of increasing their processing cost,
they refrain from registering their operations with inspection authorities. Processing is done
manually by family members and helpers and sold on the beach to tourists.
Gradually, these farmers are seeing the advantage of using advanced equipment and
machinery in farming; however, they are looking for inexpensive machinery and equipment
to conserve their limited budgets. Although there is a possibility of abundant opportunities
in the industry in future, currently a large part of the industry consists of small farmers who
do not have the resources to invest in modern equipment.
Institutes like EPAGRI are supporting the needs of the industry by conducting research on
machinery and equipment procured from overseas and modifying them to adapt to local
conditions and practices. EPAGRI is also involved in educating farmers on best practices,
hygiene standards and facilitating the formation of informal or formal co-operatives. These
cooperatives jointly have the ability to acquire boats and production equipment.
Medium sized companies and younger farmers with ambitions of capitalizing on the
untapped opportunities are more progressive in their outlook. They prefer to organize
themselves into a commercialized industry and also have the means to do so, with access to
government financing programs and the knowledge to conduct their business in a more
dynamic way.
The government policy of protecting the domestic manufacturing industry allows funding
for purchase of machinery and equipment only if a minimum of 60 percent of its
components are manufactured in Brazil. With the number of progressive members in the
industry growing it is expected that there will be a growing demand to increase efficiency
through the adoption of improved machinery and equipment. Pioneers in selling machinery
and equipment to the industry have a definite advantage provided they are willing to invest
in the Brazilian market over a long term.
Page | 75
The only large company in the industry plans to create state-of-the-art facilities for farming
and processing. As part of their modernization plans they have placed an order for
machinery and equipment with a large Chilean company (which imports from Spain)
Surinox. They are also looking for partners and associates that could help them build
capabilities to produce and process export quality mussels (compete with Chilean mussels)
that can be sold to the other states in Brazil and Latin American countries.
Page | 76
40 Opportunity in Santa Catarina and Product Market Match
Strength 1: Engineering and Design Expertise
S.N
1
2
3
4
Subject
Explanation
Remark
Description
A nucleus of engineering expertise exists in
companies in PEI that have created a cluster
competency in designing and
manufacturing equipment for mussel
aquaculture. These core engineering and
design services have delivered custom
fabrication and on-site installation and
commissioning services for mussel
processing farms and plants domestically
and internationally.
Best in class
engineering teams,
certified
technicians and
fabricators
combine to deliver
a valuable product
and service
offering to food
processors.
Opportunities
Turnkey project for companies looking for
partners that could help build product
standard for mussel production intended
for export markets. Opportunities may exist
for development and design of large scale
mussel farms and systems and equipment
within mussel farms and processing plants.
As the industry
grows the medium
size companies
would also become
prospects.
Barrier/
Considerations
Presently there is only one large processing
company, a couple of medium sized
processing companies and a few small
farms that have formed a consortium. The
scale of current opportunities may not be
significant enough to justify investment.
Recommended
Market Entry
Companies interested in the Brazilian
mussel industry can look at forming an
alliance and explore joint ventures or
partnership options to prequalify the
volume or scale of potential opportunities.
Page | 77
Strength 2: Aquaculture Equipment, Machinery Manufacturing and Custom Fabrication
S.N
1
2
3
4
Subject
Explanation
Remark
Description
From custom conveyors to barges, there is a
multitude of equipment and machinery
being built for shellfish aquaculture. These
companies are innovative and continue to
expand their work in aquaculture as the
industry grows. Conveyors, brushes and a
host of other products and applications are
developed by this innovative cluster on an
ongoing basis.
These companies
also have expertise
in oyster
aquaculture and
another species in
production in
Brazil, targeted for
further
development.
Opportunities
Mussel industry in Santa Catarina is growing
and evolving and there is an increasing
need for a range of farm and processing
equipment and machinery, from simple
equipment to complex systems.
The needs will
depend on the rate
of growth and
evolution of the
industry.
Barrier/
Considerations
There are two clear sub-markets. The mass
market that is looking for cost-effective
equipment and machinery, preferably made
locally (or at least 60 percent parts made
locally). A few larger companies and
consortiums would be prospects for more
advanced and sophisticated equipment and
machinery.
There are only a
handful of larger
companies and
consortiums.
Recommended
Market Entry
Creating a Joint Venture or a Brazilian
company and manufacturing the equipment
and machinery in Santa Catarina is the best
approach for the mass market. The larger
companies and consortiums can be
prospected for turnkey projects or exports
from Canada.
Page | 78
Strength 3: Boat Building Expertise
S.N
1
Subject
Description
Explanation
PEI boat builders serve the Canadian and
US Eastern seaboard and beyond. They
build custom designed fibreglass,
aluminum and wooden boats. Boat
suppliers manufacture in both the
commercial and leisure markets and take
pride in their craftsmanship and
manufacturing processes.
Remark
Although a small
cluster, each of the
companies in this
space is very
specialized in boat
designs, sizing and
respective supply
capacities.
There is very little opportunity in Santa
Catarina at this time.
2
3
4
Opportunities
Barrier/
Considerations
Recommended
Market Entry
Currently, boats and rafts used in Santa
Catarina are customised to local
conditions by EPAGRI and manufactured
locally. The producers are satisfied with
the available products.
A special effort on marketing this
expertise at this time is not
recommended.
Page | 79
Strength 4: Commercial Diving Expertise
S.N
1
2
3
4
Subject
Explanation
Remark
Description
The commercial diving industry in PEI
offers several specialized diving services
like crop monitoring, anchoring, line
identification and lease layout
configuration support. Supporting services
to a broad range of multi sector clients
includes underwater welding, underwater
cutting, underwater video, digital
photography and training to clients in all
aspects of services offered.
The direct
application for
diver services in
mussel farming
depends on the
production
systems that
farmers use.
Opportunities
No opportunity exists in the area at this
time. Opportunity can be created by
educating the large and medium size
companies on the advantages. On seeing
the advantages of this service, training can
be given to commercial divers either
employed or contracted by the mussel
producing company.
Commercial Diving
is highly evolved
and competitive in
Brazil. However
there is no
expertise in diving
specifically for the
mussel industry
Barrier/
Considerations
Recommended
Market Entry
The investment in educating the industry
in Santa Catarina is likely to outweigh the
returns in this endeavour.
Opportunities in this area can only be
explored when the Brazilian market
develops.
Even later this
service should be
offered as one of
the services in a
large suite of
offerings.
Page | 80
Strength 5: Product Packaging Expertise
S.N
1
2
3
4
Subject
Description
Opportunities
Barrier/
Considerations
Recommended
Market Entry
Explanation
Remark
PEI has expertise in packaging for export
to international customers. Multiple types
of bags are manufactured including leno
mesh bags and boxes for product packing
and shipping. Packaging related
machinery, closing supplies, and pre-press
printing services are all offered to
aquaculture.
There may be opportunities to develop
packaging solutions. Consulting services
and technology transfers for packaging
can be offered to large and medium sized
companies looking at selling their
processed products to other states and
overseas.
One medium size
company was
marketing its
products to clients
in other states;
however they had
to close their
operations as they
were not able to
maintain quality.
Presently none of the companies are
exporting overseas. However the largest
company is planning to export to Latin
America. Other companies may be
interested in getting into processed
products including ready to eat products
to Sao Paulo and Rio de Janeiro.
Consulting services for packaging for
export can be offered to the large
Brazilian company and to some
government agencies with an objective to
assist industry with improving practices.
Page | 81
Strength 6: Services – Business Management and Development
S.N
1
2
3
4
Subject
Description
Opportunities
Barrier/
Considerations
Recommended
Market Entry
Explanation
Remark
Consultants and project management
experts have capabilities in areas ranging
from cold chain logistics to international
marketing. There is also expertise in
business management, marketing and
operations experience that exists at both
farm and processing levels. All aspects of
mussel aquaculture retain a knowledge
base in PEI. This category includes
institutional strengths.
As a result of over
25 years of
experience in
mussel
aquaculture, PEI
has a community
of experts that
have valued
knowledge about
growing an
industry profitably
and sustainably.
There are opportunities in consulting
services including training at multiple
levels from lean manufacturing to cold
chain logistics. Also international and
domestic marketing are strong needs of
companies struggling to expand their
market and reach larger geographic areas.
There are a couple
of companies that
are planning on
selling their
products to other
states in Brazil and
are open to the
idea of exporting
to Latin American
countries.
Currently there are only a few companies
that operate on a large to medium scale.
As the industry develops, opportunity for
these services is likely to grow.
Consulting services can be offered to
companies currently looking at increasing
efficiencies and expanding their market.
Page | 82
Strength 7: Environmental Stewardship Management, Food Safety and Research
S.N
1
2
3
4
Subject
Explanation
Remark
Description
This knowledge and expertise is a key
strength within the PEI shellfish and finfish
industry and exportable on a number of
levels. Program managers, inspectors,
biological and environmental expertise are
only a few examples of the human capital
and acquired knowledge PEI retains in
these areas. This public sector expertise
has evolved private sector service
development with resulting companies
that have specialized knowledge in these
areas to support systems compliance
within farm and processing operations.
Recognized
globally for its
expertise in food
safety systems.
This expertise has
contributed to a
responsibly
managed industry
that exemplifies
the highest
standards,
verifications and
controls.
Opportunities
Consulting services including training at
multiple levels from food safety to
consulting for prevention of crop fouling
and other environmental hazards, helping
to get certification of production (organic,
fair trade).
Universities and
other institutions
could support
these activities.
Barrier/
Considerations
Government agencies could be potential
clients, the Canadian companies will need
to acquire knowledge the Brazilian
government’s buying processes before
embarking on this endeavour.
Recommended
Market Entry
Consulting services can be offered to
government agencies and companies
currently looking at expanding their
market domestically and overseas.
Page | 83
In addition to the analysis provided in the tables above, there could be opportunities in the
following areas:


Cultivation of seed in the laboratory: One of the challenges faced in the Santa
Catarina mussel industry is the lack of naturally available mussel seed. Also they do
not have the technology to produced seed in the laboratory, unlike in the case of
oysters.
Investing and partnering with a large company: There are a few opportunities to
invest with companies commercially producing and processing mussel in Santa
Catarina. These companies are keen on partnering with organizations that have
access to modern technology in the mussel industry.
Page | 84
41 Key Observations and Outcomes to Consider Moving Forward
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. This cluster of expertise is undeniable, exportable
and appears poised for future expansion and growth.
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 to
formalize 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 some 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
confirmed willingness and openness of some PEI companies to work with a cluster of other
complimentary and non competing PEI suppliers in a coordinated fashion to access new
export opportunities.
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.
Page | 85
42 Appendix
Page | 86
Appendices 1: PEI Interviewee List
Page | 87
List of Interviewees - PEI
1
Entity
Aspin Kemp and Associates
2
3
4
Atlantech Engineering and Associates
Atlantic Systems Manufacturing
BioFoodTech
5
6
7
8
9
10
11
12
13
Burkes Custom Metal Works
Cardigan Bearing and Steel
Charlottetown Metal Products
Coles Associates
Diversified Divers Inc.
Diversified Metal Engineering
Gorman Controls
Hustler Boats
IB Storey Inc.
Position
Vice
President
Corporate
Development
President
CEO
CEO
QA, Consulting
Business Manager
CEO
General Manager
Partner
CEO
Manager Industrial
Business Manager
Owner
Owner
14
15
16
17
18
19
20
21
Linkletter Welding
Prince Edward Island Bag Company
Project Gabriel
Provincial Boat and Marine
R and M Welding
Sec Heat Exchangers
Timeless Technologies/Fisheries
Top Dog Manufacturing
President
General Manager
CEO
General Manager
CEO
General Manager
Business Development
Owners
Contact
Paul Jamer
Doug Wright
Mike McKenna
Jim Smith
Ed Charter
Tracy Warren-Burke
Herman Van Den Broek
Trevor Spinney
Douglas Coles
James Landrigan
David Campbell
James Gorman Jr.
Jamie Hustler
Ian Storey / Mike Turner /
Christine Devries
Wayne Linkletter
Thane Smallwood
Tom Haan
Gordon Campbell
Rodney MacDonald
Peter Metaxas
Matt Sullivan
Wayne Linkletter Stephen
Hurst
Page | 88
Appendix 2: Santa Catarina Interviewee List
Page | 89
List of Interviewees – Santa Catarina
Position
Advisor
6
7
Entity
Fishing and Aquaculture Ministry / SC
Office
Research Center for Agriculture
Production – EPAGRI
State Department for Agriculture and
Fisheries
City Department for Fishing and
Aquaculture/Florianópolis
City Department for Fishing and
Aquaculture/Palhoça
Leardini / Cavalo Marinho
Mar e Pesc Pescados
8
9
1
2
3
4
5
10
11
12
13
14
15
16
17
18
Chief Coordinator
Secretary
Airton Spies Ivo
Serlei
Andre Funchal
Henrique da silva
Laudelino Soares
CEO
CEO
Luis Valle
Flavio Martins
Fazenda Marinha Atlântico Sul
Partner
Flavi Couto
Fedration das Empresas de
Aquicultura de Santa Catarina
OstraVagante
(Oyster and Mussel producers)
Marine Equipment
EPAGRI
EPAGRI – Fapesc (research Institute
for industry and commerce)
EPAGRI
EPAGRI
President
Fabio Brognoli
Representative
Aparecida Figueiredo
President
Coordinator
Agriculture and
Mechanical Engineer
Oceanographer
Manager Research and
Innovation
Oceanographer
Agricultural Engineer
Own business
Felipe Matarazzo suplicy
Fabiano Muller Silva
Andre Luis Tortato
Novaes
Fernando Soares Silveira
Guilherme Sabino Rupp
Own business
Acaq - Associação
catarinense de
aquicultura
Own business
Own business
Vinicius Brandao
Toninho da Associação
19
21
EPAGRI
EPAGRI
Small Farmer (leader of the
community)
Small Farmer
Sociologist/ Community organizer
22
23
Small farmer
Small farmer
Secretary
Contact
Cristiano Martins de
Souza
Fabiano Müller Silva
Especial Advisor
Joao Guzenski
Alex Alves dos Santos
Admir Dario Santos
Marina e Vicko Tomazi
Hélio Santos
Page | 90
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End Notes
1
(Instituto Brasileiro de Geografia e Estatística n.d.)
(Programa das Nações Unidas para o Desenvolvimento s.d.)
3
(História de Santa Catarina s.d.)
4
(Empresa de Pesquisa Agropecuária e Extensão Rural de Santa Catarina - Epagri 2011-2012)
5
(Supicy 2005)
6
(Bossle 2008)
7
8
http://www1.palhoca.sc.gov.br
9
(Bossle 2008)
10
(Rosa 1997)
11
(Governo do Estado de Santa Catarina - Secretaria da Agricultura e da Pesca 2013)
12
13
A significant portion of the sales is done informally, from the producers directly to the buyer, normally
tourists visiting the region. In a private conversation, a producer informed that 50% of its sales are done
directly to consumers, without any kind of official record.
14
15
(Cavalli 2010)
16
(Bossle 2008)
17
(Marenzi e Branco 2006)
18
(Ministério da Pesca e Aquicultura 2014)
19
(Santa Catarina Turismo s.d.)
20
(Camila Aparecida da Silveira 2013)
21
(MANZONI e GERALDO 2006)
22
23
(Oliveira 2003)
24
(Manzoni, Cultivo de Mexilhôes Perna perna: Evolução da Atvidade no Brasil e Avaliação da Atividade
Econômica em SC 2005)
25
(Manzoni, CULTIVO DE MEXILHÕES Perna perna:Evolução da Atividade no Brasil e Avaliação da Atividade em
Santa Catarina 2005)
26
(EPAGRI - Empresa de Pesquisa e Extensão Agropecuária s.d.)
27
(Laboratório de Moluscos Marinhos - Universidade de Santa Catarina s.d.)
28
(Universidade Federal de Santa Catarina s.d.)
29
(ANTONIOLLI, et al. 1998)
30
(ANTONIOLLI, et al. 1998)
31
(Ambiente 2005)
32
(Aquaculture New Zealand s.d.)
33
34
(Presidencia da República 2003)
35
36
(DPU Defensoria Pública da União = Federal Public Attorney 2013)
37
(Ministerio da Pesca e Aquicultura 2011)
38
(Paulilo 2002)
39
(Cavalli 2010)
40
(Panorama da Aquicultura s.d.)
41
42
43
(Oliveira 2003)
44
(Paulilo 2002)
45
46
(Jornal Palavra Palhense 2013)
47
(Presidência da República 2014)
48
(Aquicultura 2014)
49
(Presidência da República 2014)
2
Page | 97
50
52
(Governo do Estado de Santa Catarina s.d.)
53
(EPAGRI - Empresa de Pesquisa e Extensão Agropecuária s.d.)
54
(Universidade Federal de Santa Catarina s.d.)
55
(UNIVALI Universidade do Vale do Itajaí s.d.)
56
(O Sol Diário 2014)
57
(Banco Central do Brasil s.d.)
58
(Ministério do Trabalho e Emprego s.d.)
59
(BNDES s.d.)
60
(Diogo 2002)
61
(Paulilo 2002)
62
63
(Igarashi 2001)
64
(Manzoni 2005)
65
(Jornal Palavra Palhense 2013)
66
67
68
(Scalice 2003)
69
(Diogo 2002)
70
71
Brazilian Law 5.764, of December 16, 1974.
72
(Diogo 2002)
73
(Igarashi 2001)
74
(Supicy 2005)
75
www.leardini.com.br
76
(Jornal Valor Econômico 2013)
77
(Sea Food Brasil 2013)
78
( Cavalo Marinho 2013)
79
(Fazenda Marinhar Atlantico Sul n.d.)
80
(UOL Empreendedorismo 2012)
81
www.marpesc.com.br
82
83
(Igarashi 2001)
84
85
(Manzoni 2005)
86
87
(Oliveira 2003)
88
(Bossle 2008)
89
(Igarashi 2001)
90
91
(ROSA, et al. 2004)
92
(ROSA, et al. 2004)
93
(Sea Food Brasil 2013)
94
(Supicy 2005)
95
(Manzoni 2005)
96
(ABDIR - Academia Brasileira de Direito 2006)
97
(BritCham Brasil 2009)
98
(ABDIR - Academia Brasileira de Direito 2006)
99
(Governo Federal n.d.)
100
(PWC PricewaterhouseCoopers 2010)
101
(BritCham Brasil 2009)
51
Page | 98
102
(PWC PricewaterhouseCoopers 2010)
(IPEA - Instituto Brasileiro de Pesquisas Avançadas 2006)
104
(Ministério do Desenvolvimento, Indústria e Coméricio Exterior 2013)
105
(Kalb 2011)
106
(Desenvolvimento n.d.)
107
(Vn.com 2013)
108
(Metalurgica Sismaq s.d.)
109
(Banco BNDES s.d.)
110
(Manzoni, CULTIVO DE MEXILHÕES Perna perna:Evolução da Atividade no Brasil e Avaliação da Atividade
em Santa Catarina 2005)
111
112
(Aquicultura, Portaria 2014)
113
(Bossle 2008)
114
115
(Portal da Ilha 2014)
116
(Atlantic Canada Opportunities Agency, n.d.)
117
(BDO and Canmac Economics, 2012)
118
(Prince Edward Island Aquaculture Alliance, 2014)
119
(Mussel Industry Council, 2014 )
120
(Prince Edward Island Aquaculture Alliance, 2014, p. PEI Mussel Industry)
121
(PEI Department of Fisheries Aquaculture and Rural Development, 2003)
122
(Mussel Industry Council, 2014 )
123
124
(Mussel Industry Council, 2014 , p. Farm)
125
126
(Mussel Industry Council, 2014 , p. Sustainability)
127
(Mussel Industry Council, 2014, p. Council)
128
(Fisheries and Oceans Canada, 2013)
129
(Canadian Food Inspection Agency, 2014)
130
(Mussel Industry Council, 2014, p. Safety)
131
(Prince Edward Island Department of Fisheries Aquaculture and Rural Development, 2013)
132
(PEI Department of Fisheries, Aquaculture and Rural Development, 2001)
103
Page | 99

Aquaculture Industry in Santa Catarina, Brazil

Transcription

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