The Fish Processing Perspective – Market segmentation, general opportunities and eco-labelling.

1. The Fish Processing Perspective – Market segmentation, general opportunities and eco-labelling. Alex Olsen; A. Espersen A/S

2. Conclusion • Global is getting local and local is getting global • Stronger vertical integration • Eco-labels will not make the choice of consumers easier!

3. Facts about Espersen • Established 1937 • A leader in the processing of frozen seafood products • Turnover approx. 270 million Euro • More than 1,450 employees in Europe • Strong partnerships with customers, suppliers and employees • Production in Europe and Asia • Head office in Rønne on the island of Bornholm Director J.P.A. Espersen and wife, Mrs. Dagny Espersen’s Foundation is the owner of A. Espersen A/S. The main purpose of the foundation is to invest in A. Espersen A/S and to support various humanitarian purposes .

4. Locations and International Supply • Bornholm in the Baltic Sea • Fredericia and Hirtshals, Jutland, Denmark • Koszalin, Poland • Klaipeda, Lithuania • Qingdao, China • Ho Chi Minh City, Vietnam • Flexibility / contingency: Europe >< Asia - deliberate not profit optimization strategy - efficient, assured supply strategy

5. Increased consumption Are you eating more or less than 2 years ago? Fish is the winner!

6. I am concerned about

7. I am concerned about overuse of global fish stocks

8. Who should assume responsibility for ensuring stocks are not overused?

9. Which of these products do you actively try to buy?

10. Today, consumer price sensitivity is widespread

11. White fish supply Cod Haddock Alaska Pollock Hake Hoki Hake Hubbsi Hake Hoki

12. EU-27 total volumes utilized by key white fish species for 2008

13. EU-27 import dependency by key white fish for 2008

14. Volume of white fish supplied to EU-27 by third countries for 2008

15. China’s comparative advantage (University of Tromsø) Low production cost & big labor force • Labor cost approx. 10-11 RMB (1,1€) /h • 15-20% of the final product value Manual filleting and processing • Increase yield (15 %)

16. Challenges? • Responsible and sustainable sourcing • Environmentally responsible behavior • Ethical issues • Cultural differences

17. Cultural differences collectivist (From Hofstede; 2005) Individualist Large Small

18. Culture and organizations Uncertainty Avoidance Power Distance Hofstede (2005)

19. Strategy • Stay in frozen • Where we perform good • Vertical integration • Further processing • New species • Investing • More value adding • Sustainability: Governments EU NGO’s • Engagement

20. Why is seafood a business where you would like to be also in the future: • Increased consumption • Long term more consumers • Long term increased disposable income for European citizens in general • Growth potential within convenient food sector • Obesity – fish is a powerful low calorie tool in the fight against obesity We say what we do and we do what we say !

21. Eco labelling

22. Eco label May 25th 2010

23. Eco Labels for Fish Peter Hajipeiris April 2009

25. Market demand • Product image • Assure supply of raw material • Optimize profit throughout the value chain

26. What to demand of an eco label • Cost Efficient • Transparent • Trustworthy • B2C or B2B?

27. Conclusion • Global is getting local and local is getting global • Stronger vertical integration • Eco-labels will not make the choice of consumers easier!

28. Thank you for your time! Anyone who sees the future as a headwind, is going in the wrong direction Martin Held