Russian Fishery’s Dmitry Kravchenko: Chinese market, GSSI membership part of “ambitious plan”
Russian Fishery Company has joined the Global Sustainable Seafood Initiative, a step in the Moscow, Russia-based fishing and processing company’s “ambitious plans,” corporate communications director Dmitry Kravchenko told SeafoodSource.
Founded in 2011 as a partnership between Russian private investors aiming to consolidate fishing assets in different regions of Russia, Russian Fishery Company caught 226,300 metric tons of pollock in 2017, ranking it the top pollock harvester in Russia and one of the top three globally. The company also fishes herring, Pacific cod, and crab.
Kravchenko said at Seafood Expo North America in Boston, Massachusetts, U.S.A. on 13 March that his company will be making a major marketing push to expand its pollock sales in Europe, China, and domestically in Russia.
“We have identified those as our key markets, with very big potential to grow,” he said.
Key to this effort, especially in Russia, will be a drive to change the public perception of pollock, which, during the days of the Soviet Union, suffered from quality issues, Kravchenko said.
“The history of pollock in Russia is quite difficult,” he said. “The Soviet Union started harvesting pollock in the 1960s, and back then, equipment for delivery and freezing was not so good. Fish sometimes were defrosted, then frozen again, and that hurt quality, and the image of the fish in the minds of [the] people.”
Russian Fishery Company has completed major investments into fleet modernization and solved the quality problems, Kravchenko said. But the company continues to do everything possible to erase misconceptions about pollock and improve its image, he said. The company has now gone further by aligning with the GSSI, he said.
Through GSSI’s Global Benchmark Tool, which recognizes the credibility of certification schemes, Russian Fishery Company seeks to ensure confidence in its supply and promotion of its sustainably certified seafood, the company’s CEO said in a press release.
“As a global player, RFC believes that joint efforts among seafood companies can ensure that responsible and sustainable fishing be the only way of doing business in the seafood industry,” CEO Andrey Teterkin said. “GSSI recognition of transparent and credible certification schemes allows all companies to deliver high-quality seafood to the consumers.”
In 2016, RFC reported revenue of USD 238.1 million (EUR 192.8 million), and EBITDA of USD 107.1 million (EUR 86.7 million), up from 223 million (EUR 180.6 million) and USD 104 million (EUR 84.2 million), respectively, in 2015. Kravchenko said the company has even bigger financial goals for the future.
“We are growing very fast and we have ambitious plans,” he said.
RFC aims to take advantage of a new program allowing companies building new vessels or seafood processing plants domestically to acquire additional fishing quota. The firm has plans to build seven to nine new 105-meter-long, high-capacity “super trawler-processors” in Russia, as well as several processing plants, which may give the company an additional 200,000 metric tons of quota by 2023 or 2024 – the expected completion date for the company’s shipbuilding program, Kravchenko said.
The last major part of RFC’s plan for growth is increasing its marketing of pollock both at home and abroad, Kravchenko said. The company will continue to sell pollock in blocks, but it wants to move to selling a greater percentage of its fish as value-added products.
“We think that consumers underestimate the quality of pollock,” he said. “[In a] blind test [between] cod and pollock, most European participants chose pollock for quality."
The Russian market is a difficult one, but important to the company, Kravchenko said. The firm has introduced a frozen, one-kilo pollock fillet for the domestic market, he said.
“At this moment, prices in Russia a little bit less than the international market. On the other hand, the transportation costs are in rubles, so it’s quite a balance,” he said. “But we are making a push in Russia. We started this year promoting pollock in Russia. We expect the Russian market will grow and we would like to be part of this growth.”
While Russia and the European Union are important target markets, perhaps the biggest key to Russian Fishery Company’s future will be its ability to gain market share in China, Kravchenko said.
“At this moment, a big part of our catch is going to China for processing. We make it headed and gutted and then sell it to China. Then Chinese companies defrost it, make it fillets, and then sell it as double-frozen,” Kravchenko said. “As soon as we grow in our capacities to process at-sea, to make a fillet, we will reduce step-by-step the volume of headed-and-gutted sales there, and our goal is to replace that with increased sales of fillets.”
The Chinese market is a rich target for increasing direct consumption of pollock, Kravchenko said.
“Consumption habits in China are changing,” he said. “We are seeing a step-by-step change in the perception of this market. Two years ago, no one in China had tried a portion of cod, but now they’re starting to consume cod as a portion. Last year, Trident went to the Chinese market and started to present its products from fillet. So we think we can also provide our fillets to [the] Chinese market.”