Kastrup, Denmark-based Espersen, one of the world’s leading seafood processors, has completed the sale of its plant in Velikiy Novgorod, Russia, to the unit’s local management.
Espersen launched its Russian subsidiary, A. Espersen, in April 2014, with the project touted at the time by local authorities as a significant investment, signaling the promise of the Russian market. Espersen spent RUB 307 million (USD 8.52 million, EUR 6.26 million, at the time) to build the 3,000-metric-ton capacity plant, which created 30 new jobs, a figure that grew to 70 jobs by 2022.
However, the project was completed just a month after Russia annexed Crimea, which resulted in international sanctions that limited trade between Russia and the European Union. As a result, Espersen was forced to shift the plant’s sourcing to local fish, materials, and staff.
Through March 2022, A. Espersen had been supplying pollock to McDonald’s for its Filet-o-Fish sandwich. McDonald’s was the biggest fast food chain in Russia, with 850 outlets as of March 2022, but Russia’s invasion of Ukraine, McDonald’s sold its Russian holdings to local franchisee Alexander Govor, though the U.S. company retained the right to resume operations in Russia under its brand within the next 15 years. Govor renamed the restaurant chain as Vkusno i tochka and had reopened 800 of the former McDonald’s restaurants by September 2022, after making slight changes to their appearance and menu. The former Filet-o-Fish is now sold as a Fish Burger.
Due to the temporary loss of its McDonald’s business, A. Espersen’s production declined significantly, though it remained open due to a diversification strategy the company launched in late 2019. However, in July 2022, Espersen said it would sell its Russian business and officially completed the sale of the plant, to Russia’s company Edelweiss 53, a new company registered on 21 July, 2022.
According to Interfax news, citing Russia’s official ownership database, 60 percent of shares of Edelweiss 53 are owned by Anna Ivanova, Espersen’s previous head of Russia sales, who became A. Espersen’s general director in April 2022, with Irina Morozova and Dmitry Morozov each owning 20 percent of the company.
In an October 2022 interview with the paper Novgorodskie Vedomosti, Ivanova said A. Espersen is now operating at full capacity, having successfully diversified its sales and found opportunity in the free space left on retail shelves that had previously been occupied by Western brands. She said sales to McDonalds – and now Vkusno i tochka – represent around half of the company’s production volume, with the other half of the business.
The company will soon be renamed Aurora Borealis, Ivanova said. Moving forward, it will continue to push production and sales of its newly created brand, she said.
With a lack of access to service or parts provided by companies that have limited their business in Russia, Ivanova acknowledged it will be harder for the company to continue to operate the plant’s equipment, but she said the company has already commenced a search for alternative suppliers.
“We are ready to buy from Russian and Chinese equipment producers, and we have found a few,” Ivanova said. “I think there will be a boost to the industry development in Russia, so we will be able to grow our production and enter new market niches.”
Photo courtesy of Espersen
