Rising production costs in China are forcing Bornholm, Denmark-headquartered A. Espersen A/S to cease packing fish fillets in the PRC in favor of Vietnam, where its Ho Chi Minh City factory was extensively renovated over the summer. This major shift in Asian production, set to take place following the Chinese New Year in February, will come after 11 years of high-volume processing in the Shinan District of Qingdao.
The bottom line is that it is no longer profitable for Espersen to produce fishery products in China for export to the European market.
“This means that we must say goodbye to competent and loyal employees, and this is always a tough decision to have to make,” said Klaus B. Nielsen, the company’s chief executive officer.
The CEO further commented: “We have for quite some time known – and publicly expressed – that production in China for the European market would lose its competitive moment within some years. The increasing inflation in China combined with the heavily increasing value of the US dollar have been contributory factors in taking the decision to stop production in China proactively and faster than originally planned. This decision is supported by the fact that Vietnam and the European Union have made a new trade agreement.”
Espersen will also boost production at its established factory network in Europe, which produces a wide assortment of private label and branded products in Denmark, Poland and Lithuania. Offerings range from frozen fish blocks and frozen fillets to specials cuts, breaded items and deluxe puff pastry fish products. Raw material used to make value added products comes primarily from white fish species including cod, haddock, hoki, pollock and saithe.