The Asian arowana market is very competitive

[Cirrus]

I came across this business quote about a major player in the Asian arowana business; I got my very first fish from these guys and was very happy with it. I visited the farm last year and was impressed by what I saw.

Xian Leng Holdings Bhd

In the three years after its December 2001 stock market debut, Xian Leng caught the analysts’ attention because of its niche business – it had developed proprietary breeding techniques to produce Arowana fish.

However, the company reached a tipping point in 2005. Severe price competition hit Xian Leng badly, and its sales and profits deteriorated in the following years.

According to the management, the smaller breeders had been aggressively cutting the prices for their products, thus destabilising the overall market.

Says Standard & Poor’s in an April 2006 research note, “Xian Leng had previously expected the price competition to be temporary, given the limited Arowana stocks that the smaller farms were believed to have.

“However, we understand that the weak Arowana pricing continues to persist into the financial year ended January 2007, with limited visibility on pricing which tends to be set in an ad hoc manner from batch to batch. As such, it is difficult to predict when and if prices could recover to their previous levels.”

In the annual report 2008, the company continues to complain about “aggressive price competition”.

Quote taken from: http://biz.thestar.com.my/news/story.asp?file=/2009/3/28/business/3561501&sec=business

 

[Arodynamic]

I am afraid big farms like Xian Leng will have to accept that breeding aros on a commercial and backyard scale is on the increase and prices are predicted to drop as we can see in Singapore. In fact I can forsee aros prices dropping to half its present prices before levelling out- More and more farms are appearing in Indonesia and wholesalers tend to import them from Indonesia whether fish are plentiful and cheaper, even Singaporean farms import them to supplement their stocks...... which is all good news for us hobbyists. Aros can be quite prolific compared to other "high end fish" like leopoldi rays that is why Ray prices tend to go up rather than down.