Economic adaption of the Icelandic stern trawler fleet -Reduced TAC and technological changes
IIFET 2018 conference, Seattle USA, July 19th 2018.
Hörður Sævaldsson Assistant Professor University of Akureyri, Iceland [email protected]
Three sections
• 1. Catch and demersal fisheries management
• 2. Trawlers and their share of demersal catch
• 3. Development of the fleet of stern trawlers
Data collected from Statistic Iceland and Fisheries association of Iceland
1. Catch and demersal fisheries management
Catch and management
1988 Shrimp Total demersal quotas
Turning point
1990 1983 Unified MRI System report 1984 Almost full Catch & transferability 1977 effort control 1975 Effort MRI control report
Icelanders
Foreign nations 200 nm EEZ
50 nm EEZ
Source: Hagskinna, Statistics Iceland and ICES
1984 1990 1996 2002 2008 2014 ITQ species 1973 Norway lobster Cod 1988 Northern shrimp 1991 Plaice 1996 Catfish And witch 2005 (1995) A-herring 2010 Mackerel (IQ) Haddock 1974 Inshore shrimp 1997 Dab and American plaice 2013 Blue ling, argentine Saithe 1975 I-herring and norway redfish Golden/Deepsea redfish 1997 Ocean perch 1980 Capelin Greenland halibut 1999 Lemon sole Plaice (withdrawn 1985) 2001 Blue whiting Catfish (withdrawn 1985) 2001 Tusk, ling and monkfish Consolidation of catch share quota (permanent) • Substantial concentration with almost free transferability of quota 1990/1991? • Increased consolidation 1997-2000 • A maximum quota share is in force to restrict a company’s quota allowance • ? Catch quota system
12% max
Source: Dirctorate of fisheries
Ár 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 100% 204,322 218,778 229,187 242,089 255,708 267,809 282,845 299,404 318,452 343,000 70% 143,025 153,145 160,431 169,462 178,996 187,466 197,992 209,583 222,916 240,100 2. Trawler and their share of demersal catch
Side winding trawler Stern trawler • 1940s design • 1970s design • Open processing deck • Shelter while processing • Cabin and living room separated • Cabin & living room combined
Source: Sjómannadagsblaðið Víkingur 34. árgangur 1972, 5 tölublað The fleet • Stern trawlers replace side trawlers in the 1970s. • Decommission scheme active from 1985 to 1999 (size registered with IQ quotas 1984) • Out of the Icelandic EEZ vessel registry available from June 1994 (increased size)
Additional Decommission GRT (Gross Registered Tonnage) registry scheme abolished 140,000 200000
180000 120,000 160000
100,000 140000 Pelagic fleet Below 100 GRT renewed 120000 80,000 100000 Above 100 GRT 60,000 80000
40,000 60000Side winders 40000 20,000 20000Stern trawlers
0 0 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 Trawlers proportion of total demersal catch
• Icelandic stern trawlers replace side trawlers, around 50% of demersal catch since 1980
2005 (53%) 65 trawlers
1980 (56%) 87 trawlers 1990 (54%) 1975 (39%) 138 trawlers 64 trawlers 2000 (53%) 84 trawlers 2010 (51%) 57 trawlers
2015 (49%) 45 trawlers Icelanders
1985 (57%) Foreign nations 109 trawlers
1995 (53%) 112 trawlers
Source: Hagskinna. Hagstofa Íslands 3. Development of the stern trawler fleet
112 stern trawlers from 1970 to 1984
Norway 33 Poland 19 Iceland 18
Spain 11 Japan 10 France 8 Distribution of 112 stern trawlers
Siglufjörður Ísafjörður Súðavík Sauðárkrókur Húsavík Bolungarvík Raufarhöfn Ólafsfjörður Hólmavík Hofsós Suðureyri Þórshöfn Flateyri Skagatrönd Þingeyri Hrísey Bíldudalur Vopnafjörður Tálknafjörður Patreksfjörður Dalvík Akureyri Seyðisfjörður Grundarfjörður Neskaupstaður Ólafsvík Eskifjörður Capital region 17% Fáskrúðsfjörður Stöðvarfjörður Reykjavík Breiðdalsvík Akranes Djúpivogur Hafnarfjörður Höfn
Garður Sandgerði Þorlákshöfn Keflavík Grindavík Vestmannaeyjar 40 villages, majority rural areas Annual average catch 3500 metric tons Statistics and economics of the fleet 9% EBITDA • Frozen at sea with higher EBITDA until 2010
• Fresh fish vessels renewed since 2015 with rising EBIDTA
1990= 138 Total number of trawlers Fresh Frozen at sea AVG 2,700t 2,700t = 371,000t 138 1985= 109 140 AVG 3,100t = 342,000t 2,500t 1995= 112 20% 120 3,100t 112 1980= 87 EBITDA AVG 2,500t 2000= 84 109 112 AVG 4,300t 11% = 278,000t AVG 3,200t = 377,000t EBITDA = 266,000t 100 4,300t 13% 2005= 65 11% 3,200t 1975= 64 EBITDA AVG 4,100t 87 EBITDA AVG 3,000t = 275,000t 2010= 57 84 = 182,000t AVG 4,200t 80 17% 18% = 236,000t 2015= 45 3,000t 4,100t EBITDA 16% EBITDA AVG 5,000t 64 65 = 225,000t 4,200t EBITDA 17% 19% 60 EBITDA 57 23% EBITDA 5,000t EBITDA 30% 16% EBITDA 47 45 EBITDA 19% 24% 23% EBITDA 27% EBITDA 23% 27% 40 EBITDA EBITDA EBITDA 30% EBITDA 22% EBITDA 26 23% EBITDA 23% EBITDA 20 EBITDA 19 Side winders 22% 23% EBITDA 0 EBITDA 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
Source: Hagskinna. Hagstofa Íslands
1970 (17%) 27% 24% 27% 3 stern trawlers EBITDA EBITDA EBITDA
13% 20% 18% 30% 9% EBITDA EBITDA EBITDA EBITDA EBITDA Current vessels renewals following increased profitability
• Minimize haul size and processing time + chilling during processing (extend shelf life of fresh fish) • New trawlers with more space, better working conditions and increased safety • Chilling before storage room, automation in fish grading and fish storage rooms
1989 2017 1977
Onboard Fish-Hold Robotics Comparison old and new trawlers Summary and status
• Excess capacity and overcapitalization in the 1970s and 1980s • Fleet size restricted Decommissioning Scheme Limited renovation • Sharp decline in total demersal catch since from 1990 to 2000 • Transferability eased in 1990, motivating industry optimization
Current status • Highly consolidated industry: Few large vertically integrated companies • Focus on quality instead of quantity in the whole value chain • It took over 30 years to reduce the excess capacity and overcapitalization • Adjustments left to the industry Number of jobs and vessels halved from 1990 The end