Fish exporting fights rough waters

Exporting "underutilized" fish -- squid to Spain, butterfish to Japan, monkfish tails to France, and herring to West Germany -- could be at least a $ 200 million industry for Massachusetts.

But falling foreign currencies, rising energy costs, outdated equipment, and reluctance by banks are proving to be rough water for expanding the Massachusetts fish export business beyond the present $50 million a year.

New England exports represent only about 5 percent of the nation's billion dollar fish export industry. But large Massachusetts ports such as New Bedford, fourth in the nation for its landing value, and Gloucester, seventh for the volume of its fish landings, indicate fish stocks are plentiful enough to take the region's fish export industry forward, experts say.

The US Fisheries Promotion Act, passed by Congress last year, was expected by many in the industry to be the catalyst for boosting the exports.

Since 1976, when the US began to regulate its 200-mile offshore economic zone , government catch quotas have helped American boats take a large share for domestic consumption, leaving the so-called "underutilitized" (or unacceptable by American tastes) species to foreign fleets.

That loss of a valuable commodity helped spur the new act along. One provision provides loan guarantees and low interest rates for the renovation and construction of shoreside fishery facilities such as processing plants and loading facilities.

But one Massachusetts fisheries official says, "Right now we're really in a kind of a holding pattern trying to find out which direction the Reagan administration will take toward fisheries promotion."

Says Kenelm Coons, executive director of the New England Fisheries Development Foundation in Gloucester, "The people to administer the program are not authorized. There's a job freeze on in the government and fisheries service is being hit particulary hard."

Oceanside Fisheries International Inc. of Gloucester, one of the larger fish exporters, made nearly $10 million in sales last year. The 15-year-old company has almost doubled sales yearly since opening. But many smaller exporters are closing down. Others are thinking about it.

Continental Trading Company in Boston recently closed its fish processing plants. It may stop all fish exports as well. Last spring the company exported between 80 to 100 tons of fish a month to Europe. This month it is exporting half that amount -- about 35 tons.

Brad Bumpus, director of Continental Trading, says that "weakening world currencies" are his biggest threat. "We haven't made a final decision yet [ about closing down]," he says. "But we're giving it a lot of thought. The markets in Europe have deteriorated. We haven't been able to fill our contracts because our customers aren't willing to accept further deliveries."

Another major problem for the industry is its lack of experience in dealing with the standards of the foreign markets.

Says Paul Earle, chief of the export and domestic market development branch of the National Marine Fisheries Service, "The New England fish export industry could be expanded three or four times over what is being done now. But one of the main hang-ups seems to be quality. We aren't quality conscious in the way the Japanese and European markets demand."

While foreign fleets are using sophisticated fish "factory" ships with refrigerated seawater to preserve their catches, most fishermen here still put their fish on ice for the long ride back to the processor.

Says Anthony Klos, controller at Oceansside Fisheries. "No matter how excellent my processing or freezing capability is, if the fish isn't properly handled at sea, I'll never have a No. 1 product. You can't hide the flavor with butter or deepfrying." Only six of the hundreds of fishing vessels in Massachusetts have advanced cooling capabilities on board. Many fishermen blame their slow progress on the banks, which have a long history of turning down loans to the fishing industry.

Says one experienced Massachusetts exporter, "It's the same old story. The banks look at your financial statements and look at the flow chart on light manufacturing and say we don't measure up. They don't understand ours is a very seasonal business."

Herbert Higley at the State Street Bank and Trust Company in Boston says, "Most banks are reluctant to finance any foreign receivables. And there's certainly more risk when you have a perishable product like fish."

If an overseas customs officer or buyer rejects a perishable product, it's usually too late to ship it anywhere else, he says.

Another factor contributing to the depressed export industry are the rising fuel costs which now take about 35 percent of a fisherman's gross revenue and force him to make limited trips to sea. Last year fuel was about 80 cents a gallon; it's now up to $1.14 a gallon and heading higher.

In addition, most processors which deal with exports are mom-and-pop operations confused by the export process and overseas regulations.

Says Mr. Earle of the National Marine Fisheries Service, "We don't have GMs or Fords in the industry. The small businesses are used to doing business routinely and find exports totally confusing to them. They're used to closing a business deal with a handshake. They would prefer staying with domestic sales and market."