October 2005 1 Eurofish presentation 28 October 2005 Reykjavík, Iceland by Victor Hjort Ann-Mari...
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Transcript of October 2005 1 Eurofish presentation 28 October 2005 Reykjavík, Iceland by Victor Hjort Ann-Mari...
October 2005
1
Eurofish presentation
28 October 2005Reykjavík, Iceland
byVictor Hjort
Ann-Mari Haram
October 2005
2
Survey of the Fish Industry in Russia
October 2005
3
Terms of Reference
Harvesting
Farming
Imports
Raw materials
Production/Processing
Fleet
On-shore plants
Exports
Markets
I n v e s t m e n t sEquipmentDistribution
QualityThe legal framework
Insights
Consumption
Retail/Catering/ restaurants
October 2005
4
The Team + IFC
October 2005
5
The Report and this Presentation
• The report follows the ToRs closely• This presentation: 60 minutes in
total. Our objective is to present some highlights and some details from the report
• The presentation complements the report
October 2005
6
Statistics & Data
• Sources
• Accuracy and relevance
• Annexes
October 2005
7
FISH HARVESTINGOne of the world’s 10 top producers
October 2005
8
Fish and seafood harvest in 1999-2004( million tonnes)
Source: Rosstat
October 2005
9Source: FAO *Mackerel catches: Atka mackerel included
The main species (in 2003, '000 tonnes)
October 2005
10
Fish and seafood harvestby zones in 2003, %
66.8%7.6%
15.7%
10.0%
Russian Economic Zone
Inland waters
Economic zones of foreign countriesOpen ocean areas
Source: VNIERKH
October 2005
11
Primary fish production (in ‘000 tonnes) * Estimate
2004* 2003 %, 2004/2003
Far East Basin 1 730.2 1 972.3 87.7
North basin 673.2 729.5 92.3
West Basinof which:
Kaliningrad region 327.6 333.6 98.2
St. Petersburg and Leningrad region
29.4 30.5 96.4
South region Basin
37.1 59.6 62.2
Caspian region Basin
52.2 65.5 79.7
Other (including inland and fresh water)
63.5 62.2 102.1
Catches total 2 913.2 3 253.2 89.5
5 MAIN FISHING ZONES/ BASINS
October 2005
12
Total Allowable Catch (TAC) – Utilisation of resources (2003)
Zone Volume(mln tonnes)
% TAC
Russian Economic Zone
2.21 58.6
Inland waters 0.25 53.0
Foreign Economicalzones
0.52 25.4
Distant waters 0.33 20.2
Source: VNIERKH
October 2005
13
Poaching“Over 75% of Russian Far East seafood smuggled”
Intrafish, 22.09.05
“Russia, South Korea mull co-operation to fight illegal fish trade”Intrafish, 28.09.05
“Russians admit grand-scale fishery fraud –Groups of fishermen in north- west Russia admitted they fish much more cod than their quota allow” Intrafish, 19.08.05
“Illegal cod fishing a growing problem in Barents Sea”Intrafish, 12.08.05
October 2005
14
ICES – unreported catches of cod
“Estimates on unreported catches of cod in 2002- 2004 indicate that this is a considerable
problem. Unreported landings of cod are estimated at 90 000, 115 000, and 90 000 tonnes in 2002, 2003, and 2004, respectively, i.e. 20% in addition to official landing statistics.”
October 2005
15
THE NEW QUOTA SYSTEMThe Federal Law “on Fishery and Conservation of Aquatic Biological Resources” No.166-FZ of 20 December 2004 (the law on fisheries)
Quota auctions(2003)
- Allocations based on 5 year track record- Quotas used less than 50% over 2 years are
withdrawn and reallocated through auctions- Auctions for new fisheries- Resource fees introduced
Multiannual quotas of at least 5 years (2004)
October 2005
16
Likely developments in the quota system
• Simplification of quota procedures
• Regulations for implementation for quota transfers -2005? 2006? In the meantime, the quotas are sold unofficially
• Foreign access to Russian quotas
October 2005
17
Key issues
• Better use and better management of fish stocks in the Russian EEZ?
• Better fleet management?
• Consolidation of the fishing industry?
• Degree of foreign ownership?
October 2005
18
FISH FARMING Strong potential?
October 2005
19
Dynamics of Russian fish farming (1991-2003, ‘000 tonnes)
0
20
40
60
80
100
120
140
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
1,00
0 m
etri
c to
ns
Mariculture Freshwater culture
Source:Victor V. Ivin, Institute of Marine Biology,Vladivostok
October 2005
20
Species
Freshwater culture• Carp, rainbow trout, whitefish, sturgeon.
Mariculture
• Molluscs, seaweeds and other organisms. Main species: mussels, oysters, scallops and kelp.
• Marine farming of finfish is not widely developed but can become more important.
October 2005
21
Fish feed imports (tonnes)
0
2.000
4.000
6.000
8.000
10.000
2002 2003 2004 2005, Estimate
ton
nes
Total
Rehuraisio
Biomar
Kraftfutterwerk
Aller Aqua
Source: GTK
October 2005
22
Fish farming equipment
• Today: out-dated and non-specialised equipment
• The need /demand for foreign equipment is there. Price?
• Second-hand equipment from abroad. (2004:4.3 million USD)
Demand for: • equipment for aeration• isothermal tanks for live
transportation• feeding equipment• basins
October 2005
23
Key issues • Production target 2006: 600 000 tonnes ?
• Legislation?
• New equipment?
• Financing and foreign investors?
• Competition from other fish farming countries?
• Market demand?
October 2005
24
THE FISHING FLEETOld and outdated or dynamic?
October 2005
25
Key figuresBeginning of 2005: 5 531 units with a total capacity of 4 939 600 hp
Structure of the larger fleet by type of vessel
12,4% 1,6%
84,7%
1,3%
Fishing vessels
Factory vessels
Freezer vessels
Other
Source: Russian maritime register
70 % of total processing capacity is on-board
October 2005
26
Old and Outdated?
Table 9: Age of fishing vessels, year end
Age of fishing vessels, year end(number of large vessels over 55 kW)
1999 2000 2001 2002 2003
Total fishing vessels/age
2529 2596 2607 2571 2533
0-5 years 38 60 67 57 82
5-10 years 360 305 214 155 113
10-15 years 457 477 446 425 413
15 years or older 1674 1754 1880 1934 1925
Source: VNIRO
October 2005
27
Equipment & Manufacture
• Processing technology– 70% share of capacity declining, partly due to age– 25% domestic origin– Imports 2004: 4.3 million USD (Germany, Korea, Japan,
DK, N, ISL)
• Fishing gear – Competitive domestic net industry– Asian and European suppliers
• Coastal vessels– Potential developments
October 2005
28
Key issues • Ship-owners confident in future?
• Potential for modernisation/renewal?
• Demand for new processing technology
• Distant fisheries costly to operate
• Financing and foreign investors?
October 2005
29
TRADEA Big Player
October 2005
30
Seafood exports from the Russian Federation( '000 tonnes )
2000 2001 2002 2003 2004
Live and chilled fish 103.8 65.8 137.7 81.2 45.2
Frozen fish 817.9 947.4 948.4 991.2 1041.5
Fish fillet 138.7 103.8 58.0 67.6 49.3
Salted, smoked and other process fish
45.8 24.9 16.0 9.6 16.2
Crustacean product 46.9 38.4 35.2 33.6 26.9
Mollusk product 21.1 12.5 35.8 11.4 12.1
Canned fish and caviar
15.8 16.0 17.7 23.2 31.4
Canned crustaceans 3.1 5.0 4.4 3.6 2.6
Total 1193.1 1213.8 1253.2 1221.4 1225.2
Source: Vnierkh
October 2005
31
Transhipments(fish exports, ‘000 tonnes)
0200400600800
100012001400
1999 2000 2001 2002 2003 2004
Total exports
Declared exports excl.Transhipments
Source: GTK and Rosstat
October 2005
32
Major export markets (%)2000 2001 2002 2003 2004
Europe, incl. 32.3 29.4 30.6 27.5 25.8
EU 18.7 17.1 17.5 12.1 11.5
Norway 12.4 11.3 11.7 6.8 6.8
Asia, incl. 35.4 49.5 52.8 55.9 57.1
China 1.5 3.4 7.9 3.8 11.1
Korea Republic 11.6 19.5 20.6 24.9 25.2
Japan 18.0 17.6 14.0 15.0 13.2
Africa 0.5 0.4 0.3 0.3 0.3
America, incl. 31.8 20.7 16.3 16.3 16.8
USA 28.5 16.0 11.6 11.6 11.1
Total 100 100 100 100 100
Source: Rosstat
October 2005
33
Booming Imports(’000 Tonnes) 1999 2000 2001 2002 2003 2004* % of
total
Chilled fish 9.3 6.3 8.8 13.3 22.8 35.0 4.3
Frozen fish 264.2 304.1 391.4 414.2 464.7 584.1 71.4
Fish fillets 21.2 10.6 18.2 34.6 55.4 62.2 7.6
Salted, smoked and other processed fish
7.8 8.3 12.2 14.0 12.8 11.8 1.4
Crustaceans 4.4 7.8 12.8 18.0 26.7 35.3 4.3
Molluscs 2.1 0.8 4.4 6.2 8.1 10.8 1.3
Canned fish 115.1 119.1 138.4 94.2 86.0 70.3 8.6
Canned crustaceans
0.4 0.9 1.5 2.1 5.4 8.1 1.0
Total 424.5 457.9 587.7 596.6 711.9 817.6 100
Source: State Customs Committee (GTK) * Preliminary data
October 2005
34
The major import sources
• Norway - 36.0%
• Great Britain - 7.1%
• Mauritania - 5.6%
• Iceland - 4.8%
October 2005
35
The Trade Regime
• Import regulations
- Import requirements - Practical aspects- Current tariffs/future tariffs following WTO accession- ”Imports” of fish caught by Russian vessels- Import measures- The case of Kaliningrad - FEZ
October 2005
36
HS Code Product Description Import Duty
0303.50.0000
Herring (Clupea harengus, Clupea pallasii), excluding livers and roes
10%, but not less than 0.04 Euros/kg
0303.74.3000
Scomber – (Scomber scombrus and Scomber japonicus)
10%, but not less than 0.06 Euros/kg
0303.74.9000
Scomber – (Scomber australasicus) 10%, but not less than 0.06 Euros/kg
0303.79.2100
Fish of the genus Euthynnus – Whole
10%, but not less than 0.05 Euros/kg
0303.79.2300
Fish of the genus Euthynnus -- Gilled and gutted
10%, but not less than 0.05 Euros/kg
Import duties
October 2005
37
The Trade Regime cont.
• Export regulations- Export tariffs
Declared aim: More of the Russian seafood harvest to be processed in Russia! Higher degree of processing of Russian seafood exports!
October 2005
38
Future developments in trade flows
• Exports Asia?
EU? Norway? The domestic market? Processed seafood?
• ImportsThe example of herring?New species and new suppliers?Retail sector?
Globalisation!
October 2005
39
Key issues
• More Russian seafood processed by Russian on-shore plants? Influence on the trade regime?
• WTO-membership? More stable trade regime_
• Free Trade Agreements ?
October 2005
40
BOOMING MARKET
October 2005
41
October 2005
42Auchan, Moscow, March 2005
October 2005
43
Source: RetailPlanet
October 2005
44
Source: RetailPlanet
October 2005
45
13.9
15.014.714.7
12.6
14.2
14.5
11.011.512.012.513.013.514.014.515.015.5
1998 1999 2000 2001 2002 2003 2004
Source: Rosstat
Annual per capita consumption of seafood
Kilo
Year
October 2005
46
Consumption of seafood in Russia per capita in 2002 (round weight, kg)
Seafood Consumption
Pelagic fish (mainly herring and mackerel)
8.7
Demersal fish/Groundfish (whitefish)
5.6
Freshwater fish 3.2
Crustaceans 0.2
Cephalopods 0.3
Molluscs, other 0.2
Total 18.5Source: FAO Nutrition Database
October 2005
47
October 2005
48
October 2005
49
The Russian consumer
• Typical Tatjana and Ivan?• Price versus quality• Urban versus rural• Diversity
October 2005
50
Key issues
•Continued economic growth?
•Continued growth in retail?
•Better distribution?
•Regionalism?
•More variety? New products, new suppliers?
October 2005
51
PROCESSINGSMEs show the way
October 2005
52
Total production(source Rosstat)
(’000 tonnes) 2000 2001 2002 2003 2004*
Live fish (excl. herring) 349.6 343.9 287.1 260.0 254.0
Chilled fish (excl. herring) 100.2 104.9 140.1 105.1 75.1
Frozen fish (excl. herring) 1502.9 1675.2 1661.0 1700.9 1678.2
Fillet frozen (excl. herring) 117.9 92.7 49.4 67.7 67.8
Salted herring 32.1 33.4 34.4 41.8 41.9
Herring of all type of processing 411.2 407.1 372.9 374.8 321.0
Smoked fish (excl. herring) 23.6 26.6 28.7 33.5 34.8
Fish dries and dry-cured 8.4 9.1 9.9 10.5 11.0
Spiced and marinated products 1.6 2.4 2.5 3.5 3.7
Culinary products 8.2 11.6 16.8 37.7 47.7
Balyk products 1.1 1.3 1.6 2.1 2.0
Caviar 25.9 28.0 21.7 24.9 23.3
Seafood products other than finfish
96.2 97.5 103.6 93.3 95.2
Canned fish and preserves, million conv. cans
587.3 611.2 629.1 692.5 778.2
Other 110.3 8.9 11.5 34.6 65.0
Seafood products including canned fish
2994.8 3056.6 2961.4 3032.8 2993.1
October 2005
53
Structure of production capacities 2004
Source: Rosstat
Capacity ProductionUse Rate,
%
Fish cans and preserves, '000 conv. cans 965 413 481 354 49.9
of which fish preserves, '000 conv. Cans 62 465 38 444 61.5
Frozen herring, tonnes 207 397 108 945 52.5
Frozen fish (excl. herring – tonnes) 2 520 318 1 050 472 41.7
Fish fillet frozen (without herring – tonnes) 106 567 37 345 35.0
Smoked fish (without herring), dry-cured fish and balyk products, tonnes 70 785 16 803 23.7
of which smoked fish (excl. herring– tonnes) 39 995 9 839 24.6
October 2005
54
SMEs-Rapid growth
• 4 113 small-scale enterprises in the fisheries sector in 2004
• 30% growth since 2003
• Small-scale operators >70% of the total companies registered
October 2005
55
Key issues
• Increased processing at SMEs
• Retail chains change the parameters –raw material sourcing,
deliveries to retailers, the regional focus of the retailers
• On-board versus on-shore production
• Closer co-operation with foreign partners
• Foreign investment?
October 2005
56
FOREIGN INVESTMENTSTake off?
October 2005
57
Access to quotas and the fleet
• Pacific Andes/Tralflot• Archangelsk Trawler Fleet• Other companies for sale (
www.dalryba.ru)• Quota transfers• Distant waters
October 2005
58
On-shore Processing and Distribution
• Demand for technology by Russian investors (ROK1, Ledovo, Viciunai)
• Processing partnerships
• Foreign investments – existing plants and greenfield
October 2005
59
Investment drivers in the processing industry in Russia
• Avoiding high customs duties and other trade barriers
• Positioning the production close to the growing consumer markets
• Ability to react quickly to clients’ demands • Reducing transport logistics and costs• Saving on energy and other infrastructure
costs• Access to distribution throughout Russia• Lower (but rising) labour costs
October 2005
60
Starfrost Director Dave Pearson says:
"The frozen food market in Russia has changed dramatically over the past decade. We believe there is tremendous potential to work with Russian food manufacturers to meet the growing demand for value-added frozen products and convenience foods."
October 2005
61
FLEET
• New coastal vessels• On-board processing – more
potential?• Modernisation (equipment,
Fishing gear)
October 2005
62
FISH FARMING
• Potential: inland/marine• Trout farming
– Karelia, Moscow, St. Petersburg
• Salmon hatcheries• Equipment• Feed
October 2005
63
Facilitating Private Investment
• Transparency of the fish industry• Special Economic Zones, government and
regional programmes• Russian banks more open to SMEs• Financial institutions
– Direct investments– Venture capital
October 2005
64
Thank you for your attention