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Global Competiveness & Trade

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So What ?

The world economy is at a pivotal point and Atlantic Canada is lagging behind the

rest of Canada and the world

We need to mobilize for change:

Demographics

Competitiveness & International Trade

Innovation

Labour Productivity

Talent & Skills

Government Processes

Indebtedness

We need greater Private-sector leadership

We need to end Business and Politics as usual

We need to strengthen our region’s global competitiveness

We need to “Go Global ”

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Why is Going Global So

Important ?

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The GDP of emerging

economies now accounts for

nearly half of global GDP and

is growing at more than

double the rate of western

economies.

Emerging economies and

their rising middle classes will

rely on the rest of the world

for inputs to build their

infrastructure, supply their

factories, design and fuel

their modes of transport, as

well as feed, house and

educate their children.

The Important Issues

26%10%

38%

20%

23%

59%

7% 6%4% 4%2% 1%

2009 2030

North America EuropeAsia Pacific Central / South AmericaMiddle East / North Africa Sub-Sahara Africa

PUCHASING POWER & THE

MIDDLE CLASS IN ASIA

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Attractive Long-Term Opportunity in China

“This year the Chinese retail sector is expected to complete a

hat trick. It’s going to become the world’s largest grocery

market, the worlds largest luxury market, and also the largest

e-commerce market”

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We’re Already Competitive….

Aren’t We ?

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Switzerland and Singapore are the most prosperous and competitive

countries in the world and a key source of their competitiveness is not

natural resources, but success in international trade.

Critical success factors are:

Conscious selection of “champion” industries and sectors.

Broad coordination across public sector, private sector and academic institutions.

The Issue of Competitiveness

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“What is Competitiveness”

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Who’s the Most Competitive?

• Switzerland and Singapore

are the two most prosperous

and globally competitive

economies in the world

• Neither country benefits from

any significant historical

competitive advantage i.e.

natural resources

• One of their greatest sources

of competitiveness and

prosperity is their success in

international trade

• Critical success factors:

Conscious selection of “champion”

industries & sectors

Broad coordination across public sector,

private sector and academic institutions

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BUT

Today, approximately 75% of all Atlantic

Canada’s regional international exports are

to the USA and are accounted for by fewer

than 500 companies.

Even with an improving U.S. economy, we

can no longer afford to be so reliant on one

market.

Canadian industry and assets, such as

energy, mining, agri-food, information and

computer technology, aerospace,

education and tourism can all be positioned

to garner significant benefits from the

growth in global trade flows and from these

rising economies.

Other countries and regions see these

same opportunities and are developing

focused global trading strategies – this is

what Atlantic Canada needs now.

Our Record – Dead Last in Total Economic Growth vs ROC

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BUT

Today, approximately 75% of all Atlantic

Canada’s regional international exports are

to the USA and are accounted for by fewer

than 500 companies.

Even with an improving U.S. economy, we

can no longer afford to be so reliant on one

market.

Canadian industry and assets, such as

energy, mining, agri-food, information and

computer technology, aerospace,

education and tourism can all be positioned

to garner significant benefits from the

growth in global trade flows and from these

rising economies.

Other countries and regions see these

same opportunities and are developing

focused global trading strategies – this is

what Atlantic Canada needs now.

Our Record – Value of NS Exports 2003 – 2012 : -30%

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Learn more about emerging market countries and their economies.

Organize or attend a “reverse trade mission”, where key foreign companies come to

Atlantic Canada.

Do a strategic competitive assessment of your company. Is it ready to compete

globally? Can you benefit from:

Rapid economic expansion in emerging economies?

Greater regional focus on champion industry sectors?

The +$100 billion in major capital project investment in Atlantic Canada over

the next 20 years?

Mentor/Hire a new immigrant to Atlantic Canada.

Participate on a industry sector/chamber of commerce task force to develop regional

economic and export strategies.

If you are already global, offer to help someone or a company that’s not.

If you aren’t already global, find someone to help you get there

How Can We Get Started ?

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Going Global - a Local

Example

@

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Wild Catch + Aquaculture Growth will be Insufficient to Address Supply-Demand Imbalance

Source: FAO – Fisheries and Aquaculture Information and Statistics Service; OECD-FAO Agricultural Outlook 2011-2020; Moody’s Economy.com; Moody’s Investors Service estimates.

Seafood Supply-Demand Imbalance

26%10%

38%

20%

23%

59%

7% 6%4% 4%2% 1%

2009 2030

North America EuropeAsia Pacific Central / South AmericaMiddle East / North Africa Sub-Sahara Africa

Powerful Industry Fundamentals Will Continue In Our Favour

Asia-Pacific middle class sustainable growth provides a stable

source of long-term demand (six-fold growth in consumer

spending forecast through 2020)

Growing incomes have increased demand for high-capacity

premium products

Increasing adaptation of premium priced western-inspired

products

Robust Emerging

Market Demand

Source: OECD, FAO Secretariates and PricewaterhouseCoopers.

Growing focus on health and wellness driving interest in

“higher-quality” protein

Increasing consumer willingness to pay a premium for

“sustainable” , traceable, safe food

Desire for “authentic” taste experiences (wild-caught vs. farm-

raised) and scarcity premium (the seafood connoisseur)

Compelling

Market

“Mega Trends” in

Advanced

Economies

Supplier Pricing

Power

Global demand outstripping finite wild-caught supply sources

Regulatory bodies managing wild-caught fisheries

conservatively to protect long-term supply

Declining growth of both wild-caught and aquaculture

production

Customers willing to pay a premium for high-quality

sustainable supply

19%23%

30%

43%50%

Fish Oil Capture/Wild

Traded/Export

Fish Meal Aquaculture

Projected 2000-2020 Price Growth

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Source: APEC and OECD

Growth Opportunity - A Healing Global Economy

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Source: APEC and IMF

Growth Opportunity: Emerging Markets – Led by China

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0

50

100

150

200

250

300

350

400

450

2001A 2002A 2003A 2004A 2005A 2007A 2010A 2015P 2020P

Annual per capita seafood consumption

Historical Disposable Income in China

Per Capita Seafood Consumption in China

6,280 6,860 7,703 8,4729,422

10,49311,760

13,78615,781

17,17519,109

2,253 2,366 2,476 2,622 2,936 3,255 3,587 4,140 4,761 5,153 5,919

0

5,000

10,000

15,000

20,000

25,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Urban Rural

China has become a key

seafood growth market

Processed seafood, amongst

other nutritional sources,

meets the consumer’s

demand for a healthy and

convenient diet

China is expected to double

its per capita spending on

seafood products from 2007 to

2020

Advancing lifestyles and rising

disposable incomes support

strong long-term demand

Source: Wall Street research and 2011 Global Seafood Outlook report.

(Seafood purchased in Yuan per capita)

(RMB per Household)

Attractive Long-Term Opportunity in China

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Source: APEC and Statistics Canada

Growth Opportunity: A Falling Canadian Dollar vs. Major Trading Currencies

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Growth Opportunity: Free Trade with the EU

Source: APEC and Statistics Canada

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USA 62%

CHINA 11%

EU 8%

JAPAN 6%

A/O 13%

2012 CANADIAN SEAFOOD EXPORTS

$2.5 B

$451 M

$328 M

$246 M $533 M

Opportunity – Expand AC Seafood Exports Beyond The US

Source: Agriculture and Agri-Food Canada

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Opportunity – Global Seafood Export Growth

3,948 7,976

25 5,000 3,626 1,654

51,583

4,060

8,376 3,339 4,302

1,497 0

10,000

20,000

30,000

40,000

50,000

60,000

China EU India USA Japan Korea

Seaf

oo

d C

on

sum

pti

on

(kt

)

Proportion of Imports to Total Seafood Consumption

Consumption from Imports

Consumption from Domestic Product

7.1% 66.3% 0.3% 60.0% 45.7% 52.5%

Source: OECD-FAO Agricultural Outlook

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Opportunity – Global Seafood Consumption Growth

7594.1

1947.4

1235.8

256.1 84.7

-336.5 -1000

0

1000

2000

3000

4000

5000

6000

7000

8000

China India EU USA Korea Japan

Tota

l Ch

ange

in S

eaf

oo

d C

on

sum

pti

on

(kt

)

Total Seafood Consumption Growth (2014-2022)

Total Seafood Consumption Growth (2014-2022)13.68 % 23.18 % 10.27 % 3.07 % 2.69 % -4.24 %

Source: OECD-FAO Agricultural Outlook

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Product Current Tariff Eliminated

Scallop 8% Upon ratification

Live Lobster 8% Upon ratification

FAS Shrimp 12% Upon ratification

Snow crab 8% Upon ratification

Clam 13% Upon ratification

C&P Shrimp 20% Eliminated over 7 years, Canada ATRQ in place

of 23,000mt

Raw Lobster 20% Eliminated over 5 years

Value Added 20% Eliminated over 5 years

Europe is one of the world’s top consumption markets for seafood.

It is a significant market for Canadian scallops, cold water shrimp and lobster etc…

When CETA comes into force, almost 96 percent of EU tariffs for fish and seafood products

will be duty-free. Seven years later, 100 percent of these tariff lines will be duty-free.

As an exporter our plan will be to leverage this agreement export more of our Canadian

seafood into this market

CETA Eliminates Millions of $ in Tariffs & Duties on Canadian Seafood Exports and Make us more Competitive

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China, 16%

Japan, 10%

Other Asia 5%

Europe, 34%

United States 15%

Canada

14%

Source: Clearwater Seafoods Inc. Annual Report, 2013 Net Sales

The EU is Already Clearwater’s Largest Market But…

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Key Value Drivers

Value Chain Research

Differentiation

Pricing (leveraging vs. conceding)

Solutions vs. Products

Branding, Innovation, Quality

Improvements

Exporters Must Do Their Homework to Capture Value

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Widest selection of MSC-certified species of any seafood

harvester worldwide

Value Driver : Sustainability

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Value Driver: Food Safety & 100% Traceability

Eliminating our Food Safety Risk

1. “Trust, but Verify” philosophy

Meets or Exceeds

Standards

2. GFSI-BRC Accreditation

3. Enterprise wide buy-in and support

4. Education and training

5. Environmental swabbing

6. Product Micro

7. Positive release protocol

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Value Driver: Consumer Insights & Category Management

Impulse Purchasers

24%

Bargain Hunters

20%

Cautious Loyalists

44%

Seafood-Connoisseurs

12%

4 MAJOR SEAFOOD CONSUMER SEGMENTS

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Value Driver: Customer Co-creation

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Value Driver: New Products, Packaging & Brand Investment

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Does Any of this “Stuff”

Ever Really Work ?

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Clearwater Seafoods - Today (TSX: CLR)

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Thank you