Russian investment tycoon AFK Systema has acquired a 49 percent stake in Kamchatka, Russia-based Zarya. Experts have said the deal marks a milestone in the consolidation of the country's fishing industry.
Moscow, Russia-bases Systema has a long record of successful deals in numerous sectors of the country's economy, including telecommunications and oil. It’s run by Vladimir Evtushenko, a prominent Russian investor who started his business activities back in early 1990s.
Dmitry Gabyshev, managing director of Moscow-based investment company Peregrine Capital, said that AFK Systema traditionally enters new a market in order to consolidate it and create a big player – with an eye for an initial public offering in five to six years.
Zarya catches nearly 20,000 metric tons (MT) of salmon annually and manages two processing plants with a combined yearly output of 460 MT of salmon. It has fishing rights for five river spots and 16 spots in the Sea of Okhotsk.
Zarya’s turnover in 2020 was RUB 3.4 billion (USD 47 million, EUR 41 million), 2.7 times higher than in 2019. It recorded a net profit of RUB 1.97 billion (USD 27.5 million, EUR 23.7 million) last year, up by a multiple of 6.1 over 2019.
The other 51 percent of the company belongs to Zarya CEO Evgeniy Shirokov, who owns 28 percent; Evgeniya Shirokova, who owns 3 percent, and Eduard Vasileyko, who owns 20 percent.
Ilya Berezniuk, a managing partner at consultancy Agro & Food Communications, told business paper Kommersant the price paid by Systema is likely between RUB 5 billion and RUB 7 billion (USD 69.9 million and USD 97.9 million, EUR 60 million and EUR 84.4 million).
Alexander Fomin, deputy director of the Association of Industrial and Trade Enterprises of the Fishery Market, said the deal could become the first example of investment in the salmon sector by a company outside of the fishing industry. He said he expected Systema not to change Zarya’s, management, and to increase its share if the opportunity arises.
Both Berezniuk and Fomin said Zarya is an attractive asset for investment. Berezniuk said Russian consumers have increasing interest in eating seafood as a means to live healthier lives, while Fomin said the salmon industry in the Kamchatka region has been stable in recent years.
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