Freshwater pond fish farming is a dominant type of aquaculture both in Asia and in Eastern Europe. There have been several collaborations between the two regions in freshwater aquaculture development that included expert consultancies, research and development and training. Hungary has also been active in aquaculture development cooperation with Asian countries, especially with Laos and Vietnam mainly through bilateral institutional collaboration and some specific EU projects (e.g. Aquasem; Eurastip). When Hungary became EU member, new opportunities became available to strengthen economic and business collaboration financed by the Hungarian International Development Cooperation fund and also by tied aid loans provided in the frame of OECD rules. An important objective of the tied aid loan projects was to assist the business development of SMEs both in Hungary and in Laos. Thus, the main contractor of the project was the Hungarian Vitafort Agro Asia Company. The results, experiences and personal contacts gained through traditional institutional collaborations provided a good basis for business partnerships. A good example of such business cooperation is the establishment and operation of an aquaculture joint venture company in Laos, the ADC Aquatic Development Company Ltd. An old fish fingerling farm near the capital city of Vientiane in Nam Houm village was upgraded by projects financed by the Hungarian government, however Hungarian and Lao investors established a joint venture company for the long term operation of the farm.
Establishment and operation of a pond fish farm for the production of high-quality fish fingerling
ADC Aquatic Development Co. Ltd. was established in 2015 as a Lao-Hungarian joint venture company. The Hungarian parent company of ADC is Aranyponty Zrt., one of the largest private aquaculture producers in Hungary, with over 30 years of experience in freshwater fish production.
The primary activity is the production of high-quality tilapia fingerlings to supply the local fish farmers. ADC is also involved in several other activities, including the establishment of common carp breeding with Hungarian genetic background, diversification of farmed species with indigenous fish, training and education of local farmers, research and development of aquaculture production technologies.
Contribution to commercialization of aquaculture in Laos
The development of the high-quality fish seed supply has been integrated into the overall development of the fish value chain in Laos that was the objective of the aquaculture component of the Hungarian tied aid loan project between 2019-2023. The development of the fish value chain also included primary activities such as: development of grow out, feed supply, processing and marketing, and secondary activities such as training, demonstration, R&D and innovation. ADC has also been participating in the implementation of both primary and secondary activities contributing to the fulfilment of the project’s goals.
The company has been actively involved with several NGO and donor funded projects in the field of capacity-building in aquaculture. ADC was an important partner of CRS (Catholic Relief Services) and WFP (World Food Programme) in their “school lunch” programs in the Northern and Southern parts of the country, providing advisory and training services. With the support of the Hungarian Tied Aid Loan projects, ADC was assigned to provide training and development services in four provinces in the Northern part of the country, resulting in successful aquaculture businesses.
ADC is also a member of the SUN (Scaling Up Nutrition) Business Network, a UN organization aimed at improving nutrition related issues in less developed countries. In 2021 the company was awarded the “UN Best Small Business, Good Food for All” title, a competition where 50 companies were chosen worldwide to become examples of good food production practices. The same year, ADC signed a working agreement with the National University of Laos and the National Fisheries Development Center to start a public private partnership with the goal of Human Resource development and R&D activities in the field of aquaculture.
Conclusions and recommendations
It is always challenging to start a business in a foreign environment, let alone one that is different in basically every aspect, culturally, politically or even climatically, just to mention a few. The most important tasks of starting a foreign aquaculture investment in a less developed country is to take the time to assess the opportunities and the business environment in the country as well as finding trustworthy local partners. We were lucky in both regards, due to the long-standing relationship between Hungary and Laos.
Despite the careful evaluation work that has been done before the investment, difficulties still had to be faced. These included the understanding of the works of local government institutions, the mindset of the local employees and the local farmers.
ADC is planning to expand its activities in the field of fish breeding by developing a country-wide network of partner nursery farms. However, this will require extensive HR development work, to ensure the same product quality throughout the country. The company continues to work in close cooperation with active local NGO’s, including FAO and WFP.