Russian Friends Capital, a Moscow-based investment fund, is planning an Atlantic salmon aquaculture farm in Kazakhstan to target prospective markets in the country, as well as markets in Russia and China.
Russian Friends Capital Partner Dmitry Perman told SeafoodSource the farm, named Tuloma Salmon, will be located in the Khorgos Eastern Gates special economic zone at the border between Kazakhstan and China, providing a short transport leg to the three key markets.
The output of the first phase will launch in the middle of 2023 with a planned annual production capacity of 2,500 metric tons (MT) of salmon, with the potential to scale up to 10,000 MT in subsequent development phases.
“After first sales, we’ll review the result, the market, and the business model to see if there is room for expansion,” Perman said.
The final cost of the first phase is still to be calculated, as several factors might move the price tag up or down, Perman said. One of the factors is currency fluctuations: part of the expenses are in U.S. dollars, while remainder in the Kazakhstan tenge. Perman's current estimate puts the price of the first phase of the project somewhere above USD 12 million (EUR 9.8 million).
The Kazakhstan market targeted by Tuloma Salmon has the potential to be lucrative, Perman said. Kazakhstan is undergoing a generational shift in consumer behavior, with more eaters looking for healthier choices – increasingly favoring fish. The farm’s location is near the three most-prosperous areas of Kazakhstan – the Almaty, Astana, and Сhimkent regions.
Additionally, Russia can be reached within 24 hours post-harvest, making it possible to deliver fresh products to end-consumers in both countries, Perman said.
China, also geographically close, may turn out to be a challenge for the farm due to required certifications and other procedures, but in terms of competition, it also looks promising, according to Perman. China and Kazakhstan both import Atlantic salmon, and while Russia is developing its salmon aquaculture infrastrusture, its imports also remain high, leaving space in the market for cheaper and fresher fish.
“There is a clear trend toward localization, more and more farms are being built close to consumers,” Perman said.
Russian Friends Capital hired Israeli-based AquaMaof Aquaculture Technologies as its technological partner.
“They provide a disruptive approach, that enables year-round farming, recirculating aquaculture system (RAS), the full control of production,” Perman said.
At the moment, the company is getting permission to start construction, and is in talks with financial institutions over their involvement in the first phase.
“We see an interest from banks and funds in financing the farm,” Perman said.
Kazakhstan’s government announced late last year it hopes to grow its aquaculture industry. The government's Fishery Development Program 2030 was adopted to fill a gap between the country’s seafood needs and local production. Another goal of the program is to grow fish consumption in Kazakhstan from four kilograms eight kilograms per capita.
Kazakhstan Prime Minister Askar Mamin is pushing for the establishment aquaculture farms across the country, offering subsidies as incentive. In 2019, Kazakhstan's wild-caught seafood haul was 45,000 MT, and its aquaculture production totaled 7,400 MT. By 2030, the country plans to farm 270,000 MT of seafood.
