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Grappling with Saddam's oil slick, Saudi Fisheries shifts production.

Grappling With Saddam's Oil Slick, Saudi Fisheries Shifts Production

Fragile Arabian Gulf ecosystem, under pollution seige by world's worst oil spill, is unlikely to recover for a decade. Meanwhile, SFC boosts output from Gizan plant on Red Sea and increases imports to fill domestic supply gap.

The oil slick in the Arabian Gulf has come as a bolt from the blue for the region's fisheries industry. The Gulf War was expected to be a costly exercise in terms of men and materials, but the "man-in-the-street" never envisaged a situation in which it would result in a colossal tragedy for the regional ecosystem. But this is what happened. A massive quantity of at least 11 million barrels of oil has been let wantonly into the placid Gulf waters, with disastrous consequences to the future of the local flora and fauna.

It is too early at this stage to assess the multifarious effects of the oil spill, but the portents are ominous. There is really no parallel to the present crisis. There was never an occasion when so much massive quantity of oil was allowed to spread in a virtually enclosed watershed like the Arabian Gulf.

The oil slick is not just hitting one company or one country, but it has engulfed all the countries of the region and indeed the totality of the region's fragile ecosystem.

From a commercial standpoint, its impact on the exploitation of fisheries resources is far-reaching. In the short run, some of the existing fish and shrimp may not survive the onslaught. And the edible quality of those that do live will be suspect. In any case, fishermen will not venture to work in polluted waters because it will damage their fishing gear and equipment. Therefore, there is no alternative to suspension of fishing operations until the situation returns to some degree of normalcy.

The long term implications of the crisis are more crucial. Oil pollution is bound to destroy the natural foundations of fisheries development inasmuch as it damages the vital sea grass beds, the nursery areas and its surrounding waters in the Gulf, which play a vital role in the breeding of shrimp. The outlook for these breeding grounds has become uncertain for the time being.

SFC Leads

It is an irony of fate that this man-made crisis occurred at a time when all the countries in the region have been making a breakthrough in boosting fish production, Saudi Arabia, in particular, has made good progress in this direction under the leadership of the Saudi Fisheries Co.

SFC, which was set up in 1981, has blazed a new trail in fisheries development in the Kingdom with the introduction of modern technology in fishing and innovative techniques of fresh fish distribution. From about 20,000 tons in 1980, Saudi Arabia's total catches from the Gulf and the Red Sea together are estimated to have gone up to 50,000 tons by 1988. Though official data are not available for subsequent years, it is clear that production has since been well maintained. The oil spill will put the clock back by several years.

The fishing industry in the Gulf started facing problems from August 1990 following the sudden invasion of Kuwait by the Iraqis. We were then restricted from going into the shrimping areas in the Gulf, which reduced our fishing capabilities. The problem was then exacerbated when the war started and we had to shift our vessels to less productive grounds. When the oil spill started, we packed up and left to our other base in the Red Sea through the Gulf of Oman.

SFC has withdrawn all its vessels from the Gulf and has redeployed them in other areas because the company does not want to take chances where consumer interests are involved. It is also a question of upholding our image as a source of quality products. The company itself has undertaken expert studies to ascertain the extent of damage caused by the current dose of pollution, in association with an Australian expert. This is in addition to other national and international efforts to study the impact of the oil spill on the environment. Management will re-orient its long term policies in the light of the findings of these studies.

Short-Term Measures

Meanwhile, SFC has taken short-term measures to meet the new situation. The first and foremost responsibility of the company is to ensure a regular supply of seafood in the markets. It has certainly succeeded in achieving this objective. The company has kept all its outlets open and has ensured that there is no breakdown in distribution. All its 37 retail shops spread throughout the Kingdom are working normally. Such is also the case with wholesale distribution and van sales.

With the Dammam base facing a shortage of fresh fish, the company has activated its second plant in Gizan on the Red Sea to the maximum extent. From the eastern region, some labor has also been transferred to Gizan. Meanwhile, Saudi Fisheries has stepped up its imports. It has also been gradually releasing stocks of frozen fish in such a way that the consumer is not put through any undue inconvenience. The company's cold stores have enough stocks of frozen fish to feed the market for six to seven months.

Business as Usual

As a result of appropriate re-orientation of the operational policies, it is business as usual in our Dammam complex. The eastern region no doubt fell in the war zone, but thanks to the security given by the government of Saudi Arabia backed by a high-tech defense umbrella, there was never a dislocation of civic life. No water or food shortage nor any difficulty in movement of vehicles resulted. Nor did we face a blackout. This is unbelievably true.

The credit goes to the judicious civil defense arrangements and the air supremacy achieved by the Allied forces from the very beginning of the conflict. Patriot missiles invariably made short work of the Scud. It is against this background that the company has managed to maintain its operations normally, despite the war and the oil slick.

Review of Strategies

There has been, meanwhile, a thorough review of the company's operational and marketing policies, taking into account the changes in the supply and demand conditions and the marketing environment, SFC has re-oriented its marketing mix to face the new situation. On the fishing front, the emphasis has been shifted to the Red Sea side by side with renewed efforts to extend international operations. Alternative strategies to procure imports to make good the shortage of fish have already been worked out. To meet the additional consumer demand which is normal in emergencies, the company has beefed up its own distribution channels. This in short is how SFC braced up to face the challenges thrown by the Gulf War.

Saudi Fisheries Co. has been and will be able to withstand and survive this onslaught because of its diversified activities, a strong trading department and a high cash reserve equivalent to around 110% of its paid-up capital.

SFC has been fighting against heavy odds in recent times and I think the end of 1990 and the beginning of 1991 must be the worst period we ever had in the last decade of our existence. It is not only the war and the spill that hurt us, but also the higher diesel price imposed on us by the government. Amazing as it may seem, we are paying the international price for diesel in a country that floats in oil!

While the company has the wherewithal to overcome emergencies of this nature, this cannot be said about the artisanal fishermen who depend on Gulf fishing to earn a living. The oil slick is bound to hit them hard. The effect on the war and the Sadam Spill in the northern Gulf will have a destructive effect on fishing for years to come. The small boatmen dependent on area fisheries are now deprived of their livelihood. And it will take a long time to revive the lost resource.

An Update

With Iraq's defeat and a post-war ceasefire now in effect, most of our activities are back in full swing. The loss of fresh fish from the Gulf is now met partly by our catch from the Red Sea and partly by purchases from neighboring countries. On the sales side, despite the crisis, through sheer hard work, we have been able to maintain our profit level in 1990. The profit was in the region of SR 30 million, which is 30% of our capital. Our sales in the first two months of this year have also done exceedingly well -- as much as 40% above the corresponding period in the last year. The coming two-three months may not be that good because of the ensuing fasting month of Ramadan.
COPYRIGHT 1991 E.W. Williams Publications, Inc.
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Title Annotation:QFFI's Global Seafood Magazine
Author:Saleh, Nasser O. Al
Publication:Quick Frozen Foods International
Date:Apr 1, 1991
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