Catching the big fish on the Russian fishery shipbuilding and fish processing markets

Charles F. Waterman, the famous author of many fishing and hunting books, said: “Most of the world is covered by water. A fisherman’s job is simple: Pick out the best parts.”

Let’s pick out the best parts of Russia’s fishery sector!

Russia has a shoreline of 40.000 km, borders 12 different seas and has 102.000 km of inland waterways. You would expect that a country with such characteristics has an impressive fishery sector. Russia’s fishery sector, being the 4th biggest in the world after China, the USA and Indonesia, is impressive in size indeed. However, in terms of technological development of Russia’s fishery sector there are still big steps to be made and western companies can play an important role in making Russia’s fishery sector bigger and better.

The Russian fishery sector offers opportunities in shipbuilding, processing and trading.

In shipbuilding Russia requires over 400 new fishery vessels, 40 of which should be built in the coming five years. Russia’s fishery fleet numbers 2000 vessels but most of these vessels are old and outdated. There are huge fishery companies in Russia like Norebo Group, Russian Sea Fishery Company, Sakhalin-based Gidrostroy and Okeanrybflot. Some of these companies operate well over 40 vessels and they will need to invest in new vessels in the coming years. Many of these vessels will be built on Russian shipyards because of the Russian localization policy. Through this localization policy the Russian government tries to stimulate the Russian shipbuilding industry by providing incentives to Russian fishery companies to place orders at Russian yards like The October Revolution Shipyard, the Vyborg Shipyard (USC) and the Leningrad Shipyard “Pella”.  In spite of this localization policy there is still a strong dependency of foreign know-how and technology.

In fish processing there are opportunities in selling on board and on-land fish processing technologies. Overall, the Russian fish processing sector is underdeveloped. 70% of Russian fish production and almost 90% of Russian fish export still consists of raw and frozen fish. Fish processing equipment in Russia is largely outdated and the need for investments in new fish processing technology is estimated to value around 3 billion Euro. As a result of different state support programs for fish processors the export of processed fish is steadily growing and with it the demand for fish processing equipment.

In fish trading the opportunities for Western companies in Russia mainly concern the sourcing of fish in Russia. Russia is a major exporter of pollock, cod, herring and different types of salmon. According to Russian statistics around 30% of all Russian fish exports are exported to The Netherlands. With fish stocks decreasing in traditional fishing areas, Russia may become a strategic supplier to western fish processors and traders. Because of the Russian boycott most fish exports from Europe to Russia are banned. Only hatchlings, canned and processed fish and seafood is allowed for export to Russia.

In shipbuilding the main foreign companies active in Russia hail from Norway and Iceland. In the Russian fish-processing sector you will find competitors from Germany, Iceland, Sweden, Spain and Japan.  

The Russian fishery shipbuilding and fish processing market is too big to fail –
and big enough to succeed! Whether you get a piece of that pie depends of taking the right steps.

Simply put,the right steps look as follows:

  1. Take your top sellers and make a competitive comparison
  2. Start network, networking, networking
  3. Come to Russia to learn about the market and meet with potential clients, distributors and colleagues
  4. Define your value proposition
  5. Learn about the Russian business practices, rules, regulations and culture
  6. Prepare documentation in Russian
  7. Prepare certification
  8. Start business development and lead generation
  9. Be ready to localize step by step (website, distributor, representative, one-person office, full local office, partnership)
  10. Be regularly present in Russia

Just start by taking the first step and if at any moment or at any particular step you
need a helping hand, then the team at Lighthouse Management is ready to support you.

Jeroen Ketting, Founder, Lighthouse Group

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