Dalian farmers make fisheries deal with DPRK

A group of sea cucumber farmers from Dalian are expected to expand their operations into the Democratic People's Republic of Korea next year.

Wang Mingli, chairman of the Wafangdian Trepang (Sea Cucumber) Association, said it had agreed on an initial intent of investment with the fisheries department of the DPRK, and about 20 companies from Wafangdian have expressed their intention to join the cooperation.

"Hopefully, we'll start operation by the end of 2013," he said.

According to the initial plan, 800 hectares of sea area off the west and east coasts of the DPRK will be provided as the trial cultivation area.

Sea cucumbers, believed to be high in nutritional and healing qualities, are hugely popular among Chinese.

Wafangdian is one of the three northern cities of Dalian, located in the south of Liaoning province in Northeast China, and is an important production area.

Currently, the farming of sea cucumbers covers more than 6,700 hectares of sea off Wafangdian.

Statistics from the association show its sea cucumber industry is worth around 3 billion yuan ($482 million) to 5 billion yuan a year.

According to Wang, the area's links with the DPRK were developed after three visits by officials from the country.

The experienced Chinese farmers are expected to help their DPRK counterparts develop the cultivation of sea cucumbers, which will be able to be harvested there cheaper than they are in China.

But the plans aren't without their risks.

An Duan, who once farmed scallops in the northeastern DPRK, said he certainly has a different view on the expected lower-cost operation.

He had been renting more than 13,000 hectares of sea area in the Rason Economic and Trade Zone since 2007 at a cost of just 100,000 yuan a year.

"When we settled there, the policies suddenly changed. We were asked to build not only workshops and a dormitory, but also roads nearby."

"And the wages for workers at our factory were set two to three times higher than the local level," An told China Daily.

The harvested scallops were transported back to China for sale, but it took nearly four hours to drive only 100 km along the dirt roads, and then they had to pay high export tariffs.

"The eventual cost was higher than farming at home,"An said.

An said he lost about 2 million to 3 million yuan annually in past years and at the start of 2011 he shut the operation.

"It is very difficult (to do business in the DPRK). Even if you've made deals with the central government, local officials might create obstacles," he said.

Shao Huilun, deputy chairman of the Dalian Trepang Chamber, said uncertainty and potential risks have deterred many companies from investing in the DPRK.

"It is high risk to do business in any country with limited commerce.

"As far as I know, no famous sea cucumber growers in Dalian have gone there," Shao added.

Wang Mingli admitted he was worried about the uncertainty in the beginning, but was assessing the risks and was sure the agreements will be developed successfully.

"We are actually doing well at home. It is not necessary to take risks," he said.

"But the farming here will soon be saturated and so it's better to look for future development now."