Up the food chain

TGA Farms, Inc. has come a long way since Agnes Tayag sold her homes for rent in 1990 and used the proceeds to develop a 10-hectare tilapia farm in Arayat, Pampanga.

This year, TGA (which stands for Tayag, Goquingco Aquaculture) is looking at the export market.

"We have been processing and promoting tilapia fillets and other special cuts on a trial basis since 2000. We are now ready to regularly supply the US market," said president and chief executive officer Rene Tayag.

"Tilapia is popular not just among Filipinos and Chinese communities," added Tayag, who attended the International West Coast Seafood Show last November. Based on a 2001 survey of the US market, tilapia ranks tenth among the seafood items consumed by Americans.

Last year, Taiwan alone exported a total of 60,000MT of whole frozen tilapia. The $400 million US market for the fillet category remains undersupplied.

Entering the US

Branded as Pacific Nile Snappers, the TGA tilapia will initially be sold through distributors and importers. "Through their existing network, they can push our brand faster than if we put up our own outlets," he said. The first shipment of four to five boxes of both fillets and whole fresh frozen fish will be shipped later this month, to be followed by the first commercial shipment of one container a week (with each container weighing 20,000 kilos or 20 tons ) by the second quarter of this year.

Under the marketing set-up, distributors and importer will send their brands and labels to newly incorporated TGA Foods Corp. for packaging.

TGA Foods is based in a 2,000 square meter plant facility inside the Clark Special Economic Zone. The plant has an initial daily capacity of 10 tons (on two shifts), which would be increased to 20 tons within the next five years.

"The factory has been designed to meet the rigid quality control standards imposed by foreign markets. The US market, for example, is very particular about compliance to HACCP (hazard analysis critical control point) and IQF (individual quick freeze) when it comes to whole frozen fish," said Tayag.

Subcontractors

To meet the plant’s annual requirement of 20,000MT of raw, one piece per kilo fish, TGA is currently looking for subcontracting partners who have five to 50 hectares of lands that can be converted into fishponds. Preferred areas are Pampanga, Nueva Ecija, Zambales, Bualacan and Tarlac. (Seventy percent of tilapia is produced in Central Luzon and the bulk comes from Pampanga while the second larger producer is Southern Tagalog, particularly the Taal area in Batangas).

TGA Farms will provide the high-grade fingerlings (Genomar strain from a Norwegian company) and the technological know-how. Another subsidiary, Feedworld, Inc. (where TGA has a 40% stake) will supply the feeds.

Serving as the model farm for subcontractors is TGA’s Arayat farm, which has expanded from the original 10 hectares to the current 22 hectares. Another 30 hectares will soon be added to the farm, which is expected to bring up total production to 1,000MT a year.

Plans

By 2007, TGA expects to generate 60% of its revenues from the export market. "Once we have captured a sizeable share of the US market, we will aggressively market fillets and frozen whole tilapia in Europe and Saudi Arabia. By 2007, we expect to export 20,000MT a year," said Tayag.

Locally, TGA mainly deals with institutional markets, supplying three five-star hotels and one major hospital. It is eyeing a retail presence, selling its Pacific Nile Snappers through supermarkets. A move in this direction is its participation late this month in the trade show sponsored by Philippine Food Producers and Exporters, Inc. at the Megatrade Hall in SM Megamall.

"Even with no bones and no skin, our fillet price of P185 a kilo still limits our market to the well off. We would like to think that Pacific Nile is the best high value added fillet in the market, in terms of grow-out technology, proper feeds and processing," said Tayag.

TGA has indeed come a long way. After all, it is now involved in everything from hatchery to marketing, both in the local and foreign market.