• The Malaysian Ministry of Agriculture and Food Security wants to significantly increase aquaculture output to help replenish marine stocks
• The fishing industry was responsible for MYR 11.5 billion (USD 2.5 billion) of gross domestic product in 2022
• Numerous opportunities in the Malaysian seafood sector are available, and the country is seeking foreign investment in the space  

Malaysia finds itself in an interesting position as one of the world’s largest seafood importers and exporters. The country needs to develop more sustainable marine fisheries and aquaculture in order to reach its full production potential while avoiding problems caused by depleting fish stocks. Asian Insiders Malaysia Partner Germain Thomas offers more details on opportunities currently available in the Malaysian seafood sector.

It is estimated that seafood constitutes nearly 45 percent of Malaysians’ total animal-sourced protein intake. The country’s marine biodiversity has also made it a popular choice among global consumers. Unsurprisingly, the sector is big business.

The country’s fishing industry was responsible for MYR 11.5 billion (USD 2.5 billion) of the gross domestic product in 2022. That same year saw MYR 4.2 billion (USD 952 million) of seafood exports sent out with shrimps, squid, mackerel, and barramundi among the most popular products.

According to the Food and Agriculture Organisation, Malaysia accounted for 2 percent of the global marine capture in 2018. Keeping up with this demand is proving problematic. Research from the Malaysian Department of Fisheries (DOF) found that the country’s total marine fish catch decreased in five out of six years between 2016 and 2022. Years of overfishing have started to take their toll.

The current situation has seen the country shift by reducing fishing and scaling up aquaculture. The Ministry of Agriculture and Food Security has set a target for 40 percent of the output to come from this with the remaining 60 percent comprised of marine catch. The current breakdown is 70 percent marine catch and 30 percent aquaculture.

What’s needed for change?

Sustainable fishing and onshore aquaculture farms are the most crucial elements for Malaysia to improve its seafood output. Presently, the country needs assistance in terms of technology, knowledge, and other critical areas in order to successfully navigate the transition.  

As far as overseas firms are concerned, there are several areas where their technology and expertise could elevate efforts to improve the industry.

Notable opportunities in the Malaysian seafood sector:

• Large-scale production of high-value species aquaculture
• Industrial seaweed cultivation
• Seed and fry production
• Deep sea fishing
• More value-added, downstream processing of fisheries products
• Support facilities

Taking a deeper look at downstream activities, the development of processing capabilities that support local and export markets is seen as a priority. Local facilities lack skills, such as creating high value-added food products, that can diversify the country’s seafood offerings.

As far as what is being farmed, Tilapia, catfish, and prawns are among the freshwater species found in Malaysia. Saltwater aquaculture traditionally involves snapper, grouper, and sea bass, along with black tiger shrimp, white shrimp, and various bivalves. Seaweed estates are also growing in numbers.

In terms of marine fisheries, increasing activities at 12 nautical miles and beyond is seen as a necessity to move away from overfished areas closer to Malaysia’s coastlines. Digitisation of catch data and traceability systems would also improve sustainability. Moving away from trawlers and traps to less harmful fishing techniques is another step that must be taken.

Last year, the DOF stopped issuing fishing licenses for anything between the coastline and 12 nautical miles and has begun promoting deep sea fishing for tuna in the Indian Ocean. According to the department, it has a quota of 70 deep sea vessels, but only 11 licenses were handed out as of the start of 2024.

Sabah leads the way in opportunities for the Malaysian seafood sector

With the longest beach in Malaysia and more than 1,000 kilometres of potential fish farming, Sabah boasts enormous potential in Blue Economy activities. To realise this, it is among the Malaysian states actively looking to develop more onshore aquaculture farms to boost seafood export capabilities. One reason for this is an interesting tax quirk that permits states to collect taxes on live seafood. Taxes on frozen products go to the federal government.

More live seafood exports would be a boost for its coffers. The region already has a solid base to build upon as a net exporter of fish and fish products. However, there remains significant room for improvement, which is why the state has deemed it one of seven key areas for economic growth. 

It should also be noted that Sabah does not intend to abandon marine fishing efforts but to move away from overfishing in shallower waters. A greater emphasis has been placed on mid-depth marine fishing and various initiatives to boost sustainability in the sector. Additionally, the Agriculture, Fisheries and Food Industry Minister stressed the need for joint ventures with foreign investors to improve technology in the use of vessels and fishing methods.

Given Sabah’s desire to scale these up, companies with expertise in fresh seafood processing are in high demand. This also includes firms with capabilities in cold storage and logistics that can aid in developing the fresh seafood supply chain. The state has a few advantages that are working in its favour, namely available land resources and government support.

The state’s commitment to these efforts can best be found at the upcoming Sabah International Blue Economy Conference. Collaboration, innovation, and conservation are a few of the themes to be discussed in detail. Asian Insiders will be attending the event which takes place 19-20 October.

Final thoughts

There are currently abundant opportunities for foreign firms in the Malaysian seafood sector. Those with the ability to assist with sustainable marine fishing in the country and increase output from aquaculture farms should consider entering the market.

Importantly, the federal government, along with states, has identified a need for foreign investment in this industry. While the country has some existing facilities, it lacks more advanced technologies and technical capacity, especially in terms of improving sustainability. What’s more, the friendly operating environment for overseas businesses in Malaysia means that entering the market is straightforward.  

Finally, the fisheries and aquaculture sector is huge throughout Asia. Many countries are exploring ways they can improve sustainability as well as output. This would allow them to improve food security while potentially increasing exports.

For further details on how your organisation can become involved with aquaculture and fisheries in Malaysia, please get in touch with Germain Thomas, Malaysia Partner: germain.thomas(at)asianinsiders.com or Jari Hietala, Managing Partner: jari.hietala(at)asianinsiders.com.