Big RAS project for trout farming on agenda in Russian Northwest

June 4, 2021 09:27

Owners of a major fishing company operating from Murmansk have embarked on a big RAS project to farm rainbow trout in Karelia province in Northwest Russia, reports

According to Kommersant, in late May, a major fishery businessman, Igor Zubarev, established "Karelian Trout" LLC for the construction of a RAS trout farming complex with an area of about 20 thousand square meters in the "Kondopoga" advanced territory of social and economic development (a type of special economic zone), General Director of "Karelian Trout" Vitali Markov told the business newspaper.

The planned production volume will be about 4 thousand metric tons of fish per year based on investments of ca. 4-5 billion rubles (around 55—70 million USD).

According to Mr. Markov, RAS systems will be used for trout cultivation, and the fish will be processed at plants already built by the fishing company nearby under the investment quota program as the capacity of the new factories exceeds 100 tons of products per day.

Igor Zubarev is considered a beneficiary of the Karelrybflot (Karelian Fishing Fleet) Group, whose vessels harvest more than 100 thousand tons of cod, haddock, capelin, herring, etc. per year. Fishing is carried out in the Barents and Norwegian Seas, in the zones of Norway, the Faroe Islands, Greenland, etc., the group's website says. In 2020, the "Virma" Fishing Company, a core operation of the Group, made a revenue of 2.24 billion rubles (ca. $31 million) and a net profit of RUB 601.94 million (ca.$8 million).

The bulk of trout production in Russia is concentrated in Karelia at about 20-30 thousand tons per year. Approximately another 30 thousand tons are imported. One of the largest producers of salmon and trout in the country Russian Aquaculture sold 1.3 thousand tons of rainbow trout farmed in Karelia in 2020, earning 565 million rubles.

Managing Partner of Agro & Food Communications Ilya Bereznyuk notes that there is a niche for new producers of salmonids on the market. According to him, the most profitable product in the category is Atlantic salmon, but, on the other hand, the rainbow trout is easier and cheaper to grow, since it is possible to buy Russian fry, which are available in Karelia.

Sergey Sennikov, Deputy Director of the Norebo Management Company, notes that the quotas available to the Karelian Fishing Fleet are not sufficient to fully load the plants with sea fish, and in such a situation it was a choice of either to buy trout from third-party farms for processing, or organize own production.

Soft VAT

Recently, a group of State Duma deputies, including Deputy Speaker Alexey Gordeev, introduced a bill in the Lower House of the parliament that reduces VAT rates for freshwater trout from 20% to 10%. This should make the Russian fish more competitive compared to the imported product and support the development of the industry, the explanatory note says.

According to an industry source, the demand for salmonids remains stable, and world prices are rising after falling due to the COVID-19 pandemic. The Russian Aquaculture LLC in its reports estimates the annual turnover of the Russian salmon market at about 50 billion rubles (ca $700 million), and the volume of consumption by 2025 at 130 thousand tons, against 113 thousand tons in 2019.

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