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The Krill
by Dimitri Sclabos Katevas
06/10/2003

Prepared for Aquafeed.com by: Mr. Dimitri Sclabos Katevas

Dimitri Sclabos Katevas is an experienced fisheries specialist, offering consulting and brokerage services for krill and other fisheries technology,

 marketing and product development worldwide.

He may be contacted at:

E-mail: dimitri@sclabos.com; Phone: (+56 2) 273 4966; Fax: (+56 2) 273 0395.

Summary 

Antarctic Krill (Euphausia suberba, Dana) is one of the least exploited marine resources, while it is also the most abundant.  It is a small crustacean found in the South Atlantic Ocean. Krill is a tasteful and healthy food, with high protein content and omega-3 fatty acids.  Krill is also a rich source of natural pigments, vitamins and other components highly valued in human food, animal/fish feed and nutraceutical companies.

The Krill industry started to develop three decades ago by fishing companies mainly from Japan and the former Soviet Union.  While Japanese companies manufactured products mostly for the sports fishing industry and for aquaculture, the Soviet companies manufactured products for human consumption and for aquaculture.

The Krill fishing operation is complex. It is done in Antarctic waters, under extreme weather conditions and far away from ports with substantial operational complexities.  Krill’s fishing location and the difficult weather conditions in the main fishing area, together with the costs involved in the operation, have contributed to a slow development of the industry.  Krill fishing is by far different to any other fishing operation today known.  The knowledge to work with it belongs to very few people in the world.

 Actual krill fishing companies are burdened either by poor management skills, a high cost structure or by outdated equipment, technology and processes.  Some companies have also shown an unreliable performance due to working capital constraints and quality inconsistency, among others. 

The main Krill products manufactured in the past and presently are whole frozen for the sports fishing industry, some dried Krill meal for aquaculture feeds and the sports fishing industry, and canned tail and frozen tail meat for human consumption. 

Actual main operators are Japanese fishing companies, either working independently or acting through third party Polish and/or Korean fishing associates.  Japanese companies are usually burdened by a high cost structure, while outdated equipment, technology and processes burdens the Poles, Russians and Ukrainians, resulting in inefficient production and inferior quality.  No South American companies are yet involved in the krill industry. One North American Company [Top Ocean Inc. from Kodiak, Alaska] also participates in the industry possessing the most updated processing equipment for dry meals and frozen meats.

Producers

While the Japanese products are considered to have high quality, Polish products are seen as being inferior.  This view is consistent with the type of technology applied on board their factory vessels, being Japanese technology considered as the leader within the industry, though it relates more to their customer's faith on Japanese consistency rather than real outstanding and proven technology.

Russian and Ukrainian companies, on the other hand, historically produced mainly low quality food grade canned tail meat, with now old Soviet technology, which was destined to be sold in the former Eastern Bloc countries, plus a small amount of low quality Krill meal. North Americans and Koreans entered the industry in later years, USA company specializes in higher quality Krill meal and other food (human) grade Krill products, while the Koreans produce mainly whole frozen Krill.

The ability to deal with extreme weather conditions, seasonal resource variability and capture is an important competitive advantage within this industry.  The notorious Antarctic weather conditions, where fishing operations are carried out, are of seasonal nature and affect all competitors equally.  However, differences in equipment, logistics support, and seamanship will determine capture, production yield and product quality. 

In terms of demand, buyers are mostly related to aquaculture and sport fishing.   Buyers include large trading companies in Japan, Indonesia, Taiwan, and other Southeast Asian countries, US, and Europe, and large end-users worldwide, both in the fish and shrimp industry.

Suppliers

The most important suppliers to the Krill industry are the companies that provide fuel, given the importance of bunkers within the operational budget.  These suppliers consist of several companies that provide fuel in different ports along the South Atlantic coast (Montevideo, Uruguay and Ushuaia and Rio Negro, both in Argentina), in Falkland Islands (UK) and in Punta Arenas (Chile), and a couple of Greek companies that supply fuel and food provisions directly in fishing grounds in the South Atlantic waters. Some of these companies also offer cargo transport service to different destinations. 

Industry Regulations

The international regulatory body governing all scientific, economical and environmental aspects in the Antarctic Krill harvest area is the Commission for the Conservation of the Antarctic Marine Living Resources (CCAMLR).  CCAMLR is a Hobart (Australia) based treaty organization with 23 member countries, including Korea, Japan, Chile and the US (and other seven countries that have ratified the Conservation of Antarctic Marine Living Resources Convention), with direct and indirect presence in the Antarctica.  It has annual meetings where it defines fishing quotas, conservation parameters, and population restrictions, among others. In order to control its own regulations, CCAMLR is enforcing the use of independent observers on board fishing trawlers.

The Products

There are three distinct lines of Krill products, not necessarily present in the market nowadays, most of which are natural and organic, no additives added, characteristic which is increasingly valued by customers in most markets, classified as Food, Aquaculture feed and Nutraceutical/Industrial.

Table 1:  Lines of Potential Products

 

Food

Aquaculture Feed

Nutraceutical/Industrial

Products

(1) Frozen meat

(1) Meal

(2) Oil

(1) Pharma oil

(2) Dried shell, Chitin, Chitosan

Description

(1) Frozen tail meat

(1) Feed additive, attractant, protein source

(2) Natural pigment source (antioxidant effect), omega-3 fatty acids source

source

(1) Pigmented oil, Natural pigment

(2) Multi-glucose polymer with different uses

Markets

(1) Food processors, restaurants, others

Aquaculture

(1) Nutraceuticals, cosmetics, pharmaceutical companies

(2) Wastewater treatment, Medical supplies, Food and feed additives companies

The Aquaculture Feed product line consists mainly of Krill meal and Krill oil.  Krill meal is a specialty feed additive, which has been produced by the industry for more than 15 years, yet it is still in the growth phase of the product life cycle curve.  Krill meal is a highly nutritious and effective attractant and flavor agent, used successfully in low palatability diets for aquaculture fish, such as diets that contain vegetable proteins and/or antibiotics.  It is also a source of natural antioxidants and pigments (astaxanthin), used to increase the flesh pigmentation of fish such as salmon, trout and yellow tail, and of shrimp.  Krill meal is superior to other crustacean meal products in terms of its amino acidic content, its attractant and flavoring quality, the capability of the fish and shrimp to extract the pigments from the meals, and its immune-precursor quality.

Krill oil can be used by the aquaculture industry for its high pigmentation values, due to its high content of astaxanthin, as well as for being a rich source of omega-3 oils.  Actual competitors in the Krill industry have not yet produced Krill oil at a commercial scale.

The Food product line mainly consists of Frozen Krill tail meat [plus Krill protein concentrate (powder), and Krill hydrolyzed soluble].  Frozen tail meat is the cooked and peeled tail meat of Krill, frozen at sea.  This unique organic seafood product has a mild taste, similar to lobster, and it is very nutritional, being rich in omega-3 oils (which contribute to lower cholesterol levels), vitamins, minerals and antioxidants.  Among some of its uses, frozen tail meat can be employed by secondary food processors for breading, or it can be used in pizzas, seafood salads and restaurant entrees. 

Competing products

Companies that produce indirect competing goods belong to the traditional fishmeal and oil industry (which are diversifying their business by manufacturing human products, given the poor results and increasing fishing restrictions within the fish meal industry), and to other industries that manufacture protein feed and food products.

Table 3:  Potential Competing Fronts

 

Food

Aquaculture Feed

Nutraceutical/Industrial

Products

(1) Frozen Krill meat

(1) Krill meal

(2) Krill oil

(1) Krill pharma oil, Astaxanthin

(2) Krill dried shell

Potential Competing Products

(1) White fish frozen fillets (cod, tilapia, sole, hake, catfish, Alaska Pollock, turbot), lobster, frozen shrimps, crabs, prawns, and crawfish

(1) Lango & Prawn meal, Shrimp meal, Squid meal, Clam meal, Fish meal

(2) Fish oil

(1) Fish oil, Natural or artificial pigments, Immune-stimulants

(2) Crab shell, Shrimp shell, Lango shell

Regarding the attractant and palatant qualities of Krill meal, squid meal, clam meal, artemia soluble, and fish soluble, among others, are indirect competitors. However, Krill meal presents several advantages compared to the rest of the products:  it has a high natural pigment content (astaxanthin), with astaxanthin also functioning as an antioxidant and photo protector.  Moreover, it has been proven that this pigment has a positive effect in the rates of growth and immune-modulation in both fish and shrimp.  Astaxanthin has also a positive influence in shrimp survival rates.  Krill is also a rich source of minerals, and it has certain amino acids that stimulate smell and taste, and glycogenic amino acids that are appetite stimulants.  These factors contribute to its high attractant and palatant quality.

In the food product line, Krill meat competes with white fish fillets, lobster meat, frozen crabmeat, shrimps, and crawfish, among others. 

There are some nutritional supplement companies that sell nutraceutical products that contain omega-3 oil, which is an important component of Krill pharma oil.

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