This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 03 COLOMBO 001328 
 
SIPDIS 
 
COMMERCE FOR ARI BENAISSA 
STATE FOR SA/INS 
 
E.O. 12958: N/A 
TAGS: KTDB BTIO EFIS ECON ETRD BEXP MV ECONOMICS
SUBJECT: IMI MALDIVES FISHERIES SECTOR OPPORTUNITIES 
 
 
¶1.  Summary:  The fisheries sector in the Maldives is 
growing rapidly.  Fish exports were $69.1 million in 2003, 
up 41 percent from 2002.  Maldives would like to further 
develop its fisheries sector, which is dominated by tuna, 
to increase exports and value added production.  The 
expansion in the fisheries sector will present 
opportunities for US companies.  End Summary. 
 
The Fisheries Sector 
-------------------- 
 
¶2.  Tuna is the most important marine resource in the 
Maldives, representing 90 percent of the fishing catch, 
with skipjack tuna being by far the most important species 
at about 70 percent of the total catch.  Skipjack is a 
lower quality tuna and is mainly utilized for canning. 
Skipjack is exported to Europe fresh, to Asia frozen for 
canning, and to Sri Lanka dried.  Only four private 
fisheries zone operators and the government-owned Maldives 
Industrial Fisheries Company Ltd (MIFCO) are permitted to 
collect and export skipjack tuna.  Skipjack exports in all 
forms were 108 thousand metric tons in 2003. 
 
¶3.  Yellowfin tuna, the second most important fisheries 
resource, comprise about 15 percent of the total catch. 
Yellowfin tuna fetches a much higher price than skipjack, 
and is more likely to be exported fresh or frozen as whole 
fish or loins.  Total Yellow Fin exports in 2003 were 22.9 
metric tons.  Major markets for yellowfin tuna include 
Europe and the Japanese sashimi market. The collection and 
export of yellowfin tuna is not limited to zone operators. 
 
¶4.  In addition, there is multi-species reef fishery and 
limited fishery for aquarium fish (exported live). 
 
Recent Trends 
------------- 
 
¶5.  The last two years have yielded especially large hauls, 
due in part to the privatization of skipjack export. 
Fish export earnings registered a 41 percent increase in 
2003 to $69 million, following a 37 percent increase in 
2002, mainly on the strength of the large frozen tuna 
exports during both years. 
 
¶6.  The government initiated a fisheries liberalization 
program in May 2001 in which Maldives was divided into four 
fishing zones running north to south.  Two zones were 
privatized, and two zones continue to be controlled by 
MIFCO.  Within each privatized zone, two zones operators 
are licensed to collect, process and export tuna. The 
private companies have initially tended to concentrate on 
frozen fish exports, but intend to expand into more 
processed exports.  Value-added facilities are now under 
development in both MIFCO and privatized zones to expand 
freezing, canning, drying and other processing capabilities 
and should be operating by 2005. 
 
¶7.  Fishing inside the 75-mile coastal zone is limited to 
Maldivians.  Foreigners are allowed to fish only in the 
Exclusive Economic Zone (EEZ), which extends from the 
coastal zone to a 200-mile offshore limit. Fishing in the 
EEZ is long-line and is dominated by foreign companies. 
MIFCO is the only Maldivian company currently engaged in 
long-line fishing in the EEZ, and its venture has not yet 
proved profitable. 
 
¶8. Within the coastal area, harvesting is performed by 
local fishermen in small and medium sized motorized fishing 
vessels (known as dhonis) using traditional Maldivian 
fishing methods-primarily small scale reef fishing and pole 
and line tuna fishing-which are not environmentally 
detrimental.  The recent increase in the price of fish 
offered to fisherman due to competition between zone 
operators has encouraged fisherman to upgrade to larger 
boats that can bring in a larger haul and remain at sea for 
a longer periods of time.  Net fishing is illegal in the 
Maldives, and long-line fishing is permitted only in the 
EEZ. 
 
MIFCO 
----- 
 
¶9.  MIFCO is engaged in purchasing and processing tuna in 
two zones and exporting under its own brand.  In addition, 
it is processing fresh and frozen yellowfin tuna collected 
by other exporting companies.  MIFCO is still the only 
company canning at this time, and also operates ice plants 
in its zones and a fresh frozen processing facility near 
Male. 
 
¶10.  MIFCO plans to invest $5 million to expand skipjack 
collection and increase the capacity of its ice plants over 
the next two years, its first investment in skipjack since 
its creation. MIFCO also plans to increase its investment 
in yellowfin tuna by building a fresh fish processing 
facility on Gan island in the south of the country.  The 
project will cost around $7-8 million and should be 
completed by 2005. 
 
Barriers to Development 
----------------------- 
 
¶11.  The fisheries sector is currently disadvantaged by the 
lack of training for fishermen. 
 
¶12.  Financing is difficult for fisheries development 
because foreign investment tends to be drawn to the more 
visible, more highly organized and less risky tourism 
sector. This is compounded by the lack of collateral 
afforded by the licensing process, the past loans taken out 
by MIFCO, which have yet to be repaid in full, and the 
general lack of knowledge in the banking community about 
the fisheries sector. 
 
LDC graduation 
-------------- 
 
¶13.  A large proportion of Maldivian fish products are 
currently exported duty-free to the European Union (EU) 
under LDC Generalized System of Preferences (GSP) programs. 
Following LDC graduation, the duty on EU exports could 
increase to 24.3 percent. 
 
Potential Markets 
----------------- 
 
¶14.  Maldives fisheries industry present several areas with 
potential for U.S. suppliers. 
 
Long-term financing: Financing is a perennial problem for 
Maldivian companies due to the dearth of development banks 
operating in the country.  Private firms rely on foreign 
banks for long-term capital. 
 
Equipment Supply:  New facilities will require 
refrigeration and processing equipment.  Ice plants and 
cooling systems are especially necessary.  Private 
companies are mostly familiar with American brands and 
commend their reliability. 
 
Fish Product Packaging: There will be opportunities to 
introduce and supply fish canning and disposable pouch 
packaging technology, in addition to technology for 
preparing pet foods, lunch packets, sausages and cutlets, 
fish oil and fishmeal. 
 
Technical Expertise:  Aquaculture is still in infant stages 
in the Maldives.  Foreign technical knowledge will be 
required to investigate its feasibility. 
 
US Companies interested in exploring these opportunities 
can contact the companies below: 
 
Maldives Industrial Fisheries Company Ltd. (MIFCO) 
Block 389, Hilaalee Magu 
Male' 20-04, Republic of Maldives 
Tel: 960-323932 
Fax: 960-323955 
Email: info@mifco.com.mv 
Website: www.mifco.com.mv 
 
Zone Operators: 
 
Island Enterprises Pvt. Ltd. 
Maaram, First Floor, Henveiru Ameeru 
Ahmed Magu, P.O. Box 20169 
Male' 20-05, Republic of Maldives 
Tel: 960-323531/325643/322747 
Fax: 960-325645 
Email: fiberbot@dhivehinet.net.mv 
 
Jausa Fisheries Project 
¶G. Looza, First Floor, Hadheebee Magu 
Male' 20-04, Republic of Maldives 
Tel: 960-317575 
Fax: 960-320997 
Email: info@jausa.com.mv 
Website: www.jausa.com.mv 
 
Horizon Fisheries Pvt. Ltd. 
Third Floor, No. 12 Boduthakurufaanu Magu 
Male', Republic of Maldives 
Tel: 960-328855 
Fax: 960-324455 
Email: info@horizonfisheries.com 
Website: www.horizonfisheries.com 
 
Exporters: 
 
HMS Maldives Pvt. Ltd. 
ADK Tower, Third Floor, Ameer Ahmed Magu 
Male', 20096, Republic of Maldives 
Tel: 960-334805 
Fax: 960-325779 
Website: www.hms.com.mv 
 
Marine Coral Maldives Pvt. Ltd. 
Alihavaa Building, Ibrahim Hassan Didi Magu 
Male', Republic of Maldives 
Tel: 960-313307 
Fax: 960-325645 
Email: coral@dhivehinet.net.mv 
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