SURVEY OF THE FISH INDUSTRY IN RUSSIA OCTOBER 2005 PREPARED BY FOR MINISTRY FOR FOREIGN AFFAIRS & MINISTRY OF FISHERIES, ICELAND ii Contents Contents .............................................................................................................................. ii Executive Summary........................................................................................................... iv Mandate and background information............................................................................... ix Acknowledgements ........................................................................................................... xi List of abbreviations ........................................................................................................ xii 1 INTRODUCTION ...................................................................................................... 1 1.1 Geographic situation........................................................................................... 1 1.2 Population ........................................................................................................... 1 1.3 Economic situation..............................................................................................2 1.4 Political and legal factors.................................................................................... 2 2 FISH INDUSTRY STATISTICS ............................................................................... 4 2.1 Overview of statistical information sources ....................................................... 4 2.2 Key statistical information.................................................................................. 6 3 FISH HARVESTING................................................................................................. 7 3.1 Key features........................................................................................................ 7 3.2 Capture fisheries................................................................................................. 7 3.3 Regional fisheries bodies .................................................................................. 16 3.4 Fishing quotas................................................................................................... 19 4 FISH FARMING...................................................................................................... 23 4.1 Key features...................................................................................................... 23 4.2 Overview........................................................................................................... 23 4.3 Main species......................................................................................................24 4.4 Feed for fish farming ........................................................................................ 27 4.5 Fish farming equipment .................................................................................... 29 4.6 Outlook for marine fish farming....................................................................... 29 4.7 General outlook for Russian aquaculture.......................................................... 31 5 THE FISHING FLEET............................................................................................. 32 5.1 Key features...................................................................................................... 32 5.2 The Fleet – vessels, capacity, origin ................................................................. 33 5.3 Purchase and sale of fishing vessels ................................................................. 38 5.4 Fishing gear and fishing methods ..................................................................... 40 5.5 On-board processing......................................................................................... 40 6 THE PROCESSING INDUSTRY ............................................................................ 45 6.1 Key features...................................................................................................... 45 6.2 Total production................................................................................................ 46 6.3 Production capacity........................................................................................... 49 6.4 Equipment and facilities ................................................................................... 51 6.5 The structure of the processing industry........................................................... 51 6.6 Major players.................................................................................................... 51 6.7 How the fish is delivered to the processors ...................................................... 52 6.8 Summary of the state of play of the processing industry.................................. 52 6.9 Future Developments........................................................................................ 53 ii 6.10 Current quality standards .................................................................................. 54 7 TRADE ..................................................................................................................... 61 7.1 Key features...................................................................................................... 61 7.2 Total exports and imports ................................................................................. 61 7.3 Exports .............................................................................................................. 62 7.4 Imports .............................................................................................................. 65 7.5 Major players.................................................................................................... 66 7.6 Import regulations............................................................................................. 67 7.7 Export regulations............................................................................................. 71 7.8 Future developments in trade flows.................................................................. 72 8 MARKET.................................................................................................................. 76 8.1 Key features...................................................................................................... 76 8.2 Consumption..................................................................................................... 76 8.3 Brands ............................................................................................................... 83 8.4 Distribution ....................................................................................................... 84 8.5 Retail sector...................................................................................................... 85 8.6 Catering............................................................................................................. 90 8.7 Price determination for fish and seafood products ........................................... 93 9 INVESTMENT ACTIVITY AND PROSPECTS .................................................... 96 9.1 Key features...................................................................................................... 96 9.2 Introduction....................................................................................................... 97 9.3 Russian and foreign investments in the fish industry ....................................... 98 9.4 Initiatives by major Russian industrial groups to enter the fishing Industry .. 109 9.5 Investment prospects for Icelandic companies in the Russian Fish Industry . 109 9.6 International Financing Institutions ................................................................ 117 9.7 Issues that limit or are needed to encourage private investment .................... 121 Annexes ...........................................................................................................................125 iii Executive Summary This Survey is funded jointly by the Ministry of Foreign Affairs and the Ministry of Fisheries of Iceland, the Trade Council of Iceland and participating Icelandic companies, and supervised by the International Finance Corporation. As one of the world’s leading fishing nations, Iceland offers products, know-how and services throughout the value chain from catches to consumption of seafood. The Icelandic Sponsor Group supporting the Survey consists of companies representing the Icelandic fleet and on shore processing industry, seafood traders, equipment manufacturers supplying gear to fishing vessels, the onshore processing industry and fish farms, as well as financing institutions. The Terms of Reference for this Survey for1, developed by the International Finance Corporation in cooperation with the Icelandic stakeholders, point at areas where the Icelandic industry could get in-depth knowledge about the Russian fisheries sector in order to develop trade, investments, business opportunities and general cooperation of mutual interest for the Icelandic and Russian fishery industry. The Survey responds to this task by providing the latest available information and insight into all the main aspects of the Russian fishing industry, covering fish harvesting, fish farming, the fishing fleet, trade, processing, market perspectives and investment. However, it should also be added that the