Sector’s results 2020 marked by rising investments and revenue

April 2, 2021 01:09

Speaking at a late March press conference, President of VARPE (Russia’s main fishery association) German Zverev summed up the sector’s results for 2020 and voiced investment proposals for the next few years, reports

According to Mr. Zverev, in 2020, the total annual revenue of fishing and fish processing companies increased to 695 billion rubles, or 8% more than in 2019, when the revenue was 642 billion rubles. However, the growth has slowed from 20% in 2019 to 8% in 2020. In the fishing segment the revenue for the year increased by 5% to 390 billion rubles in 2020 from 370 billion rubles in 2019. The indicator in the fish processing segment grew slightly better to 304 billion rubles in 2020 from 273 billion rubles in 2019.

Against the above slowdown, at the end of 2020, the total profit of the industry fell by 17% to 150 billion rubles (in 2019 it amounted to 180 billion rubles). The fall in the total profit also affected the volume of tax with the greatest contribution to the fall made by the reduced profit tax proceeds for obvious reasons.

At the same time the personal income tax and insurance dues, on the contrary, increased by 4% in the year 2020. This suggests that despite the difficult times and the pandemic, there have been neither layoffs, nor wage cuts in the industry.

In 2020, investment in both fish harvesting and fish processing continued to grow. The total volume of investments amounted to 68 billion rubles (about one billion USD), while a year earlier, investments in these segments amounted to 55 billion rubles. Such a large increase is due to the commissioning of several fish processing factories, as well as investment in the fishing fleet renewal, primarily under the investment quota share program.

Summing up the foreign trade results, the head of the country's largest industry association noted a decline in the sector’s export value from 5,381 billion US dollars in 2019 to 5,287 billion US dollars in 2020. The preliminary forecast for exports for the current year was predicted at 4.9 billion US dollars. According to German Zverev, the low expectations are due to a significant drop in the pollock sales due to problems with shipments to China and the lack of progress in this market.

During the briefing, proposals were also voiced for the second stage of investment quotas, which will soon be sent to the Government. More specifically, it is proposed to shift the investment quota provision emphasis from the fleet renewal to the onshore factories construction.

According to German Zverev, out of the 24 fish factories that were declared as part of the first stage of quota allocation, 19 have already been built, while only five of the 56 declared vessels have been delivered so far. Another 29 boats are being built behind schedule, and construction of 22 more ships has not yet started.

According to VARPE head, it is necessary to change the ideology of investment quota allocation at the second stage, giving half of the quotas with an approximate volume of 220 thousand tons of pollock and herring for the construction of land-based processing complexes. At the same time, it is necessary to supplement the requirements with an obligation for such complexes to build a cold store with a capacity of at least 10 thousand tons, as well as to have the plant for the manufacture of products ready for sale in retail networks. The existing quota distribution ratio "15% to fleet, 5% to factories" at the second stage should be divided equally - 10% of quotas for each direction, with the condition that the quotas for the construction of the fleet will be distributed no earlier than in 2025-26.

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