Abalone farming: A new Thai food frontier
By Jon Fernquest[Introduction | Vocabulary | Article | Reading Questions | Answers]
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Learning how to raise animals and sell them in the local market is not difficult to learn how to do in Thailand.
There are books and schools, friends and family might also help you. It's not difficult to get started.
Fish farms, for example, are fairly easy to start up. In Chiang Rai province many people start small fish farms with small initial investments. The risks are low because many people do it. That's also why profits probably aren't that great either.
The risk and potential reward increases when you're an entrepreneur and pioneer like Sitthisak Muangsin who started Thailand's first abalone farm in Phuket.
Sitthisak spent large amounts of time, money, and research to finally find a combination of technology and abalone breed that worked.
He is making money now, but this was not always the case.
In today's article he discusses his long road to success as well as his vision for the future for the Thai abalone industry.
Reading Questions
Here are some questions to guide your reading (See answers at end):1. What dream does Khun Sitthisak have for Thailand?
2. What do abalone eat?
3. What countries have prized abalone as a special food in the past?
4. Were abalone farms important in the past?
5. What was Khun Sitthisak's first business? How did he finance it? How long did he run this business for?
6. How did he finance his abalone business initially?
7. What were the initial reasons for starting an abalone farm?
8. What year did he start the abalone farm? Where did he get his initial training?
9. Was his initial choice of a species for the farm a good choice? Why or why not?
10. How much time and money did he waste with his first bad choice?
11. What forms of financing did he end up using for his abalone business?
12. Did he gain anything from his initial abalone farm failure?
13. What problem solving advice does Khun Sitthisak give his readers?
14. When he could not sell his first batch of abalone, how did he manage to salvage his investment and get something out of it?
15. What change of business strategy did he make after his first failure with abalone farming?
16. Did he get any further training for his second attempt at the abalone farming business? What did he learn and how did this help help him to succeed?
17. What kind of research and development (R&D) does he do?
18. How much has he invested in R&D?
19. Which countries might become future competitors in warm water abalone farming?
20. How has his abalone farm on Sirey Island in Phuket made money from exports?
21. How much money does he make? (Revenue, not profit that is.)
22. In the next decade, what percentage expansion in production is he planning?
23. What two remaining large-scale goals does Khun Sitthisak have for abalone farming in Thailand?
Bangkok Post Article: October 9, 2006
Amazing abalone
At the Phuket Abalone Farm - the only abalone farm in Thailand - the future looks bright. But it wasn't always that waySTORY BY PICHAYA SVASTI, PHOTOS BY DANAYA CHULPHUTHIPHONG
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The road has not been smooth but Sitthisak is determined. His dream is to see Thailand become a world-class seafood producer through research and development.
A slow-growing herbivorous marine snail, abalone feed at night on seaweed. For centuries, abalone have been a gastronomic delicacy in Asia, especially China and Japan.
Abalone farming was unnecessary three decades ago when 28,000 tonnes were caught a year; today however, catches are way down.
Born in Bangkok, Sitthisak, 44, said he always wanted to be a vet. He recalls that his interest in animals began since he was in Grade 1. Walking past and standing by the school's fish pond every day, the then six-year-old Sitthisak was curious why the Firemouth Cichlid fish, which fed on bread, was so small. He would later learn that there is a thing called animal malnutrition.
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To him, raising fish was a happy business.
What was most exciting, however, was his experiment of using an old iron as a thermostat to help quails hatch their eggs when he was in Prathom 7.
"That part of my life sowed the seeds of love for animals. And I became a vet," Sitthisak remarks.
After six years at Chulalongkorn University's Faculty of Veterinary Science, he opened a shrimp farm in Surat Thani and spent the most part of a decade there.
"I started from zero by borrowing money from relatives to run the shrimp farm. I used the profits from the shrimp to invest in abalone farming," he says.
Why abalone?
The connection is long and might sound accidental. Sitthisak's wife, veterinarian Parnjai, wanted to live by the sea. And a friend gave him a New Zealand abalone shell as a souvenir. And that shell inspired Sitthisak to seek to culture high-value marine animals that are in short supply but for which demand is high.
He found the answer in abalone.
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"I wasted two or three years and simply wasted tens of millions of baht. I went through terrible times, especially when our R&D failed, despite help from relatives and the Board of Investment. But, at least I got the know-how in return," Sitthisak recalls.
Instead of brooding on the misfortune, Sitthisak set out to solve the problem - and he had a prudent approach to problem-solving.
"We need at least three alternatives for one problem. If things still get out of hand after we try all the solutions, then we might have to chalk it up to bad luck," he says.
To deal with his unsold fresh shellfish, he hired a cold storage facility to keep the millions of abalone - whose cost could be as high as 10,000 baht per kilogramme if he included the investment costs of producing them.
"It was not a waste," he insists. "We could turn the abalone into sauce."
Although it was not cost-effective, it was better than letting the whole first batch spoil for nothing, he adds.
After further study, he decided to go back to the popular Japanese-Taiwanese abalone. The first stage was a struggle. The trial and error period lasted a year. At last, a training course in Australia led to his success in controlling water temperatures and the water-recycling system at the farm.
"Once we could control the temperatures, things went well. We could also manage nitrification - the process of removing abalone waste," he remarked. The secrets, he says, are: To keep the temperature below 29C, to maintain regular water flow and to protect the abalone from sunlight.
Sitthisak proudly says his farm piloted research on the Japanese-Taiwanese abalone through crossbreeding, growth control, gene control and breed improvement. So far, he has invested around 30 million baht in research and development efforts. Its condominium-like units for rearing abalone won a National Innovation award last year. Each unit provides 10 tiered layers, each of one square metre, compared to the 250cm2 of a traditional enclosure.
"We may be the country's pioneer in warm water abalone culturing and remain the region's first and only abalone farm, but Malaysia and Vietnam, which are good at marine animal rearing, might become our future competitors," the vet says.
As his farm buys jade seaweed (sarai yok) and ulva seaweed (sarai phomnang) from Pattani farmers for up to 11 baht per kilogramme to feed the abalone, Sitthisak suggests that growing seaweed in shrimp farms for sale can be a profitable profession. Each rai can yield seaweed worth 20,000 baht every two months.
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Sitthisak says he has been more or less successful in his marine venture. Each year, his abalone farm on Sirey Island, Phuket, exports around 20 million live abalone as breeders, mostly to Taiwan.
The farm is poised to enjoy around 200 million baht in revenue next year. In terms of production, yields are estimated at 100 tonnes per year starting next October, and 5,000 tonnes per annum 10 years from now.
Yet Sitthisak wants to put two more jigsaw puzzle pieces together in his big abalone farm picture - to rear abalone on a larger scale with local farmers' participation, and to turn Thailand into a seafood giant. At least, Thailand must be the world's top-three abalone producer a decade from now - that's his humble hope.
"An important lesson I have learned is the virtue of being patient, to use your brain and to have good back-up plans. For me, my wife is my mentor," Sitthisak says.
"Success is not too far away for those who are smart and don't give up easily."
Vocabulary
provincial - in the provinces outside of the Bangkok area, in rural farming areas
entrepreneur - a business person who starts a new kind of business, there is a risk of the business failing because the business idea is new and hasn't been tested before, but there is also a chance of success and high profits if the experiment works (See Wikipedia)
fuel his success - help achieve success
abalone - a large shellfish and gourmet food (See Wikipedia on abalone)
the road has not been smooth - there have been difficulties in making a successful business
herbivorous - eats plants, not animals
seaweed - an plant-like algae that grows in the sea, also a common and healthy food in Asia (See Wikipedia on seaweed)
gastronomic delicacy - a gourmet food, a special food
malnutrition - not eating sufficient good food so that long term health suffers (See Wikipedia on malnutrition)
thermostat - a system that switches a motor on or off according to the temperature
quails - a kind of bird (See Wikipedia)
Board of Investment - "an agency of the Government of Thailand to promote investment in that country. It provides investment information and services for investors, as well as many incentives." (See Wikipedia and website)
know-how - knowledge about how to do something
brooding - thinking deeply and seriously about something that makes one unhappy (usually accompanied with an unhappy expression on the face)
prudent - sensible and careful
chalk it up to bad luck - blame it on bad luck (it didn't succeed because of bad luck)
trial and error - to learn over time from the mistakes you make while doing activity
water-recycling system - system for circulating water through an abalone farm, water flows throught the farm
piloted - was the first person to try out a system to see whether it worked
crossbreeding - breeding two different breeds to create a stronger breed
gene - the part of a cell in an animal or plant (See Wikipedia on genes)
rearing, animal rearing - breeding, keeping animals while having them repoduce and create more animals
tiered - stacked vertically in layers or levels
quarantine - keep an animal in isolation when it comes from another country, to make sure that it does not spread disease
poised to - about to
put two more jigsaw puzzle pieces together - making some progress in solving a large problem
humble - not proud, does not believe that they are better than other people
back-up plans - the plan for what to do, if the first plan doesn't work
Answer Key:
1. What dream does Khun Sitthisak have for Thailand?
He would like to see Thailand become "a world class seafood producer through research and development."
2. What do abalone eat?
Abalone eat seaweed. They are herbivorous, meaning they don't eat meat.
3. What countries have prized abalone as a special food in the past?
Asian countries such as Japan and China.
4. Were abalone farms important in the past?
No. In the past most abalones were caught. Divers would take them from the sea. Thirty years ago, as much as "28,000 tonnes were caught a year."
5. What was Khun Sitthisak's first business? How did he finance it? How long did he run this business for?
His first business was a shrimp farm in Surat Thani which he ran for ten years. He borrowed money from relatives to help finance it.
6. How did he finance his abalone business initially?
He used the profits from the shrimp farm business to finance the abalone farm business initially.
7. What were the initial reasons for starting an abalone farm?
a. His wife wanted to live by the sea.
b. A friend gave him a colorful abaloner shell as a souvenir.
c. He learned that abalone are "high value marine animals that are in short supply but for which demand is high."
8. What year did he start the abalone farm? Where did he get his initial training?
He started it in 1988. He got his initial training in Taiwan.
9. Was his initial choice of a species for the farm a good choice? Why or why not?
No, it was a bad choice. He chose a lesser known species that he thought might grow better in Thailand, but no one wanted to buy it.
10. How much time and money did he waste with his first bad choice?
He "wasted two or three years and "tens of millions of baht."
11. What forms of financing did he end up using for his abalone business?
Besides the initial seed capital from his shrimp farm profits, family and the Board of Investment (BOI) helped him finance the abalone farm.
12. Did he gain anything from his initial abalone farm failure?
Yes, he gained know-how.
13. What problem solving advice does Khun Sitthisak give his readers?
"We need at least three alternatives for one problem. If things still get out of hand after we try all the solutions, then we might have to chalk it up to bad luck."
14. When he could not sell his first batch of abalone, how did he manage to salvage his investment and get something out of it?
He turned the abalone into sauce and sold the sauce.
15. What change of business strategy did he make after his first failure with abalone farming?
He decided to try the popular breed of abalone that he knew there was a market for.
16. Did he get any further training for his second attempt at the abalone farming business? What did he learn and how did this help help him to succeed?
Yes, he went to Australia and took a training course that taught him how to control water temperatures and run a water recycling system for his farm. Keeping the water temperature at the right level, keeping water flowing through the farm, and removing abalone waste allowed him to raise the more popular abalone.
17. What kind of research and development (R&D) does he do?
a. Crossbreeding for growth control and breed improvement.
b. Smaller "condominium-like units for rearing abalone."
18. How much has he invested in R&D?
He has invested 30 million baht.
19. Which countries might become future competitors in warm water abalone farming?
Malaysia and Vietnam which are both "good at marine animal rearing."
20. How has his abalone farm on Sirey Island in Phuket made money from exports?
Every year, he "exports around 20 million live abalone as breeders, mostly to Taiwan."
21. How much money does he make? (Revenue, not profit that is.)
Next year annual revenues will reach 200 million baht.
22. In the next decade, what percentage expansion in production is he planning?
During the next decade, he is planning to expand production to 50 times as much as he is currently producing. (5,000 / 100)
23. What two remaining large-scale goals does Khun Sitthisak have for abalone farming in Thailand?
a. He wants to "rear abalone on a larger scale with local farmers' participation" like the CP group's chicken business.
b. He wants to turn Thailand into a "seafood giant" (produce a lot of seafood).
