Russian startup Strizh-Aqua HUB, in partnership with Israel-based AquaMaof Aquaculture Technologies, signed a memorandum of understanding (MoU) in early March to establish a recirculating aquaculture system (RAS) growing Atlantic salmon in the Krasnodar region, aiming primarily at the booming market of southern Russia.
Strizh-Aqua HUB Founder and CEO Victor Popolitov, who has 25-years of successful entrepreneurial experience under his belt, told SeafoodSource the first phase of the farm will be completed in 2023 or 2024, with a planned annual output of 5,000 metric (MT). The capacity can then be further expanded to 10,000 MT a year.
AquaMaof will oversee the technical side of the project, including design, equipment, maintenance, and other operational necessities. Strizh-Aqua HUB is in charge of construction, government relations, marketing, sales, and other commercial activities.
AquaMaof may also invest in Strizh-Aqua HUB, should the parties find it necessary and appropriate, according to the agreement.
Popolitov said AquaMaof was selected due to the company’s approach to RAS technology. The company’s Minimal Liquid Discharge (MLD) approach enables reduced energy costs and water consumption, using several patented processes for water purification and filtration. The process also allows antibiotic- and chemical-free operations, thanks to strict biosafety protocols and monitoring. All these factors contribute to a higher return on investment compared with similar equipment providers, he said.
Locating the farm in the Krasnodar region also provides upsides for the business. The area is home to the cities of Krasnodar – with its million inhabitants – and Sochi, the hosting city of the Winter Olympic games in 2014. The region, as well as other territories of southern Russia, have increasingly become a destination for Russians looking to relocate thanks to its warmer climate, sea resorts, and other benefits.
The region’s draw is highlighted by the number of residents in the region, which has been steadily increasing in recent years despite overall population declines in Russia. In 2021, the area has 5.7 million residents, making it the third biggest region in the country after Moscow.
The area has also become something of a tourist destination for Russian residents. In summer, and during the long May holidays, the area is often crowded with sun lovers and beach-goers, while in winter, it’s visited by downhill skiers that fill local hills – and premium restaurants.
The proximity of the planned farm location to these domestic markets is supplemented by fast and easy logistics to countries on the Black Sea like Turkey, Bulgaria, and Romania, along with other countries that are accessible by sea routes. The Russian South is also home to multiple ports, including Novorossiysk, Tuapse, Kavkaz, and Taman.
Another benefit of the location is that aquaculture is historically well developed in the region, resulting in a sufficiently skilled labor force.
Other than logistic ones, there are also marketing factors to favor Strizh-Aqua HUB’s concept. In 2018, Russia consumed 87,000 MT of Atlantic salmon, with 90 percent of this volume having arrived from abroad. RAS farms now in operation and under construction in Russia will not be able to produce enough Atlantic salmon to fill the gap between the local consumption and production, leaving a gap of up to 80,000 MT a year through 2030 for newcomers to the industry.
As an additional factor to driving the prospects, Popolitov refers to the incentive measures the Russian government has recently introduced to boost aquaculture. Coupled with reduced tax rates, subsidies, and other steps to help develop fish farming, the favorable location of Strizh-Aqua HUB, and RAS technology, put the company’s products in a good competitive position, Popolitov said.
Photo courtesy of Victor Popolitov/LinkedIn