Fish farming has emerged as one of the fastest growing Greek industries, establishing the country as a world leader in the cultivation of Mediterranean fish.

Boosted by increased demand for fish brought on by health concerns over red meat and mad cow disease, the sector is growing 10 percent annually.

This year, domestic fish farmers will produce more than 60,000 tons, three-quarters of which will be exported to Europe. Italy is Greece's biggest customer, importing about 60% of Greek-farmed fish, but demand is growing from other countries such as Germany, France, Britain and Spain.

The success of the industry is due in part to the country's natural advantages mild climate, clean seas, as well as around 3,000 islands and 15,000km of coastline offering ideal locations for fish farming operations.

The Norwegian model

But the foundation of this fishy success story has its roots in a calculated strategy, based on the Norwegian approach to the same sector.

Norway's fish farmers channelled all of their investment into one product salmon. The success of this strategy is evidenced by the fact that aquaculture is the now second-largest Norwegian export after oil.

Similarly, Greeks focussed almost exclusively on two Mediterranean fish - gilthead sea bream and sea bass. Not only are these two varieties extremely popular with consumers, they are ideal for cultivation as their production cycles are short.

Autonomy on the agenda

Last year, Greece produced 58,000 tons of sea bass and sea bream. As the farming of these fish has developed, attention has turned to making the industry autonomous. Until recently, Greece imported all juvenile fish from other countries, now, most fish farmers have their own hatcheries and the next step has been to produce fish feed domestically.

The marketing of these fish has also been broadened. Most sea bass and sea bream are exported to Italy as whole, round or gutted fish. However, Greeks, hoping to attract Northern European consumers, are developing new products such as fillets, smoked and battered fish.

Companies have also begun to experiment with different types of higher-value products that are more difficult to cultivate, with production of small quantities of tuna, lobster, crab, salmon and eel. Aquaculture researchers also say that they have successfully cultivated grouper, common dentex, red porgy and spavid, and that these are likely to be the focus of future efforts.

As domestic technology has become sophisticated, so have the enterprises themselves. The traditional family-run operations have consolidated to the point that an average Greek operation dwarfs its Mediterranean counterparts.

Aquaculture giants

Four Greek fish farming companies now trade on the Athens stock exchange Nireus, Selonda Aquaculture, Hellenic Fishfarming and Seafarm Ionian. A fifth company, Galaxidi Aquaculture, has recently received approval for listing.

One of the country's fastest growing companies, and now one of Europe's largest, is Seafarm Ionian. With turnover this year estimated at 25 billion drachmas, the groups sales have leapt with six-month profits showing a 300 percent year-on-year rise.

Management attribute growth to investment in production. Today the group has 25 fish production units, three hatchery stations, four packaging units, one closed-circuit production unit and one processing unit. A series of acquisitions, as well as the planned merger of the groups subsidiaries, have boosted strength and size.

Seafarm is now focussing on international expansion. At present, the group has four distribution networks in Europe, but it aims to penetrate new non-European markets. Quality control is seen as key to penetrating the more demanding transatlantic markets.

International focus

Domestic rivals are also turning their attention to new international markets. Nireus, one of the Greek market leaders, has established subsidiaries in Abu Dhabi and Tanzania. The Selonda group has built a $2.5 million hatchery plant in Singapore and has provided technical advice and management to operations in Kuwait.

In recognition of continued growth potential in the sector, the government has drawn up a series of incentives to attract international investment. Cash grants of up to 45% of investment costs have been matched by tax relief to bring international cash into the Greek aquaculture sector.

In addition to the good climatic conditions and incentive schemes, investors benefit from low operating expenses and labour costs, as well as advanced know-how and technical resources developed by the Greek industry, according to the Hellenic Centre for Investment (ELKE).