Russia's Fisheries Agency to hatch government and private capital partnership as key player on seafood market
Russia's Federal Fisheries Agency has worked out an investment project on establishment of a public limited company to be engaged in transportation, storage and sales of fish products, reports www.fishnet-russia.com (www.fishnet.ru) with reference to RIA Novosti.
More specifically, the projected company is supposed to consolidate purchases of seafood products from the fishermen, products' storage at ports, their delivery to the regions and sales, including sales in the Ocean affordable seafood chain now revived in large cities of Russia under the Agency's initiative.
The new company will be established as a partnership of the government and private capital. Implementation of the project will attract banks, leasing companies, fish ports, cold stores in large cities, forwarders (OAO Refservice (plc), OOO Agentstvo Refperevozok (ltd)), retail chains including the Ocean chain. According to the project, the founders will participate in the authorized capital with land, property and money assets.
The investment project has been released for public discussion. In early August the concept of the project is to be finally approved and after that the new company will be registered according to the Russian legislation.
Earlier the Federal Fisheries Agency planned to establish OAO Russkyi Kholod (plc) to be engaged in construction and management of coldstores in ports and a separate transport and logistics company to be engaged in optimization of seafood shipments. But now the Agency has changed its mind and decided to create a single company to be engaged in the whole complex of services on the ways of seafood from the fishermen to the end consumers.
According to the expert estimates, in 2009 the seafood volumes entering the Russian trade chains have jumped at least by 20%. In the following years the consumption is expected to grow further.
In this connection the need in modern infrastructure for seafood storage and delivery to consumption regions has grown extremely strong.
Under the investment project, in 2009-2011 about 20 coldstores of the total capacity of 140,000 tonnes will be built in Russia, namely in Moscow and the surrounding region, Saint Petersburg, Kaliningrad, Sochi, Makhachkala and Nakhodka. The total volume of investments is estimated at more than 255 million USD.
Implementation of the project with the attracted investments of 8 billion RUR for the period of 5 years would produce positive cash flows in 2012. In the meantime, realization of the project with 100% borrowed capital would result into accumulation of losses of 4.5 billion RUR in 2013. The negative financial result by the end of the year leads to the lack of working capital, and it also implies continuous conversion of the credit portfolio for debt services.
The key operator in the system of seafood shipments from ports to coldstores and from the coldstores to consumers will be FGUP National Fish Resources.
The transport and logistics company is established in order to force intermediary wholesalers out from the commodity-money turnover. Plans also provide for transfer formation of prices letting all the participants of the process to get extra deposits to finance the programs aimed at renewal of fixed assets.
Thus, the idea of the project is to create a vertically-integrated system for seafood transportation from producer to consumer in order to guarantee the product quality and raise its competitiveness in the quality-price balance.