Japanese Firms to Relocate Fish Processing Operations to Indonesia From Thailand, With a Catch

Several Japanese seafood processing companies plan to move their base of operations from Thailand to Indonesia to take advantage of abundant fish stocks in Southeast Asia's largest economy. (Reuters Photo/Beawiharta)

By : JG | on 2:55 PM August 26, 2017
Category : Business, Commodities

Jakarta. Several Japanese seafood processing companies plan to move their base of operations from Thailand to Indonesia to take advantage of abundant fish stocks in Southeast Asia's largest economy.

Fish production in neighboring Thailand and Vietnam has declined over the past two years, as Indonesia, under the direction of Maritime Affairs and Fisheries Minister Susi Pudjiastuti, has recently begun cracking down on illegal, undocumented and unregulated fishing.

Among prospective companies seeking to relocate to the archipelago include the Itochu Corporation, one of Japan's largest trading companies, which might move its fish export business based in Thailand to its Indonesian subsidiary, Aneka Tuan Indonesia, according to a Ministry of Maritime Affairs and Fisheries statement on Saturday (26/08).

"The company is in Thailand and will be assisted to be relocated to Indonesia. This is because raw materials are still from Indonesia," Susi said in the statement.

Still, Thailand, and other Asean member countries have an advantage over Indonesia as their seafood exports to Japan are subjected to zero import tax, a condition Susi said she would like to change in the near future.

The minister gave a courtesy call to her Japanese counterpart, Ken Saito, last week to discuss tax exemptions for Indonesian seafood exports.

"Japan should impose zero percent import tariffs for all fishery products from Indonesia considering that Indonesia's effort to combat illegal fishing has been swift and excellent as expected by the global community," Susi said.

Saito said Japan acknowledges that most seafood exports from Southeast Asia are sourced from Indonesian waters, according to the statement.

The Japanese government will soon negotiate with Indonesia under the framework of the Indonesia-Japan Economic Partnership Agreement (IJEPA) in regards to the import tax exemption for Indonesian seafood products, Saito said.

Indonesian seafood exports rose by 7 percent to $3.9 billion in 2016, according to data compiled from the International Trade Center. Over the same period, between 2012 and 2016,, Thai exports dropped by 30 percent to $5.6 billion, while Vietnam's exports stagnated at $6 billion.

Indonesia sunk 236 boats caught fishing illegally in the country's waters last year, data from the ministry showed. Of those, 96 were Vietnamese and 21 were from Thailand.

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