The operating conditions of Russian pollock producers continue to deteriorate, and they are deeply in debt of nearly 2 billion US dollars

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Published Mar 21, 2024

Tridge summary

Russian pollock fishing companies are experiencing a decline in net profit despite a 24% increase in total revenue over the past five years, due to a 37% rise in production costs. The industry is facing challenges such as the blockade of Western markets due to Russia's actions in Ukraine, rising costs, global supply chain disruptions, and a 'flexible' tax rate linked to the ruble-dollar exchange rate. The industry's debt has reached 168 billion rubles (approximately 1.6 billion euros / 1.8 billion US dollars), exacerbated by the COVID-19 pandemic and sanctions on Russian fishing. Additionally, the price of Russian pollock fillets has dropped by 36% in the past year.

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Original content

Alexey Buglak, chairman of the Russian Pollock Fishing Association (PCA), disclosed at the recent Far East Fisheries Seminar that although the total revenue of pollock fishing companies has increased by 24% in the past five years, the expansion of production costs has reached 37%, and net profit shrank by 12%. The PCA revealed that the declining trend in the pollock industry stems from multiple factors, such as the blockade of Western markets in retaliation for Russia's military actions in Ukraine, rising costs, and other disruptions to the global supply chain, which together constitute a factor in the profitability of the pollock industry. There are many obstacles on the road. In addition, Russia has launched a national investment quota program since 2017 to update its fishing vessels and land-based fish processing infrastructure. The funds required for this program come from corporate loans from banks to build new vessels and processing sites. According to PCA data, as of the ...

Source: Foodmate