We can say that the investment process has started throughout Russia. At the moment, over 20 modern fishing plants for advanced processing of raw fish are under construction; more than 40 vessels are being built at Russian shipyards. And 26 August was an important date: we hoisted a flag at the Yantar plant. <…> This means that the process is irreversible, it has been launched. What is being constructed today will dramatically change the whole fishing industry in the nearest future. Both vessels and onshore processing facilities will be created — Sergey Tarusov, Chairman, Lenin Collective Farm Fishery.
In the financial framework the [fishing, – Ed.] industry looks pretty good. Average EBITDA profitability exceeds 40%. Debt to EBITDA ratio is less than 5, which means that an average enterprise can easily settle accounts over the period of five years. And, in general, the fishing industry portfolio is quite healthy, as we finance 70% and lead the largest part of the market — Vladimir Sitnov, Senior Vice President, Sberbank.
This year the salmon capture level has doubled. We have improved the organization, and the financial results of our fishing enterprises have increased fourfold. <…> By 2030, we expect the capitalization of the fishing industry to reach RUB 25 billion, with annual turnover of 8 billion — Mikhail Sobolev, First Deputy Governor – Chairman of the Government of the Chukotka Autonomous Area.
Through investment quotas the state subsidizes these investment projects [in the fishing industry, – Ed.]. <…> In some areas, the amount reaches 40–50% of the total investment project cost. That is why I think that the state has the right to request the implementation of the specified projects — Ilya Shestakov, Deputy Minister of Agriculture of the Russian Federation; Head, Federal Agency for Fisheries (Rosrybolovstvo)..
The regulations for the procedure of providing investment quotas are very strict. In particular, it is impossible to change general construction contractor — Oleg Myachin, General Director, Trier.
We can see three types of serious risks. The first one is related to the fact that a considerable part of vessel construction projects will be a little behind the schedule. <…> There is another one. According to the decree of the Government of the Russian Federation, starting 1 July 2020, only vessels with primary engine produced in Russia will be recognized as built at Russian shipyards. Here is the question: as a result of the auction announced on Monday, 46 crab boats are to be constructed. We understand that for all these 46 crab boats keels are to be laid over the next 10 months, by 1 July 2020. Otherwise there is a risk that this vessel will not be recognized as built at a Russian shipyard. <...> The second <…> risk is about untimely provision of investment quotas. <…> However, the main <…> risk, particularly for investors, is withdrawal of a quota. And the upcoming five-year investment plan can become the period of withdrawals — German Zverev, President, All-Russian Association of Fisheries Enterprises, Entrepreneurs and Exporters .
The first [question, – Ed.] is that people have built plants but have failed to put them into operation; and we are discussing who is responsible for this. As a result, they lost their quotas. It is partially related to the fact that when the commission came to accept the plants, the fishing season was almost over. We had two such cases. And another one, when, for example, investor won a quota for squid, while the Federal Agency for Fishery does not include squid into the fish products category. This means that no quota is issued for squid. As a result, return on investment and plant utilization rate are going down — Leonid Petukhov, General Director, Far East Investment and Export Agency.
It is not only that nobody awaits us; we are pushed out from all markets. We can see a clear collusion on Alaska pollock roe. Unfortunately, that is a fact that I have to acknowledge. We also can see substantial violation of WTO regulations, and even the global trade war between America and China does not help us. Our products can access neither Chinese, nor European markets — Sergey Darkin, President, Pacific Investment Group (TIGR) PJSC..
Five years have passed. What has changed in the Far East? <…> In my opinion, in such areas as infrastructure, producers, educational platforms, there has been no change, unfortunately. <…> If we do not start afresh, do not use some new instruments, I am afraid that we will not have not only equipment producers, but staff in general — Oleg Komarov, General Director, Technological Equipment.
We need to remember that everything is managed by people, and our education facilities are so outdated. People use equipment produced in the previous century. We need to do something to ensure that we train specialists to work with this complex modern equipment — Dmitry Pashov, President, Moneron.
Today we will finance even the auction crab deals for up to 15 years. The good news is that we do have such resources. We have already made a number of decisions concerning 12-year financing, which is a challenging term for the market. And it is crucial that at the horizon of 10–12–15 years the regulatory framework does not change dramatically — Vladimir Sitnov, Senior Vice President, Sberbank.
To provide stable conditions for economy management, including fixed quota shares for extraction of aquatic biological resources for fishing enterprises that have been implementing investment projects since 2016. I think this solution would lay a solid foundation for investment projects — German Zverev, President, All-Russian Association of Fisheries Enterprises, Entrepreneurs and Exporters .
A suggestion or a request for the Federal Agency for Fishery as a regulator. <…> please try to avoid such detailed specifications in normative documents, so that the framework for investors is wider. <…> And also be more flexible about investors achieving the primary goals, which is the construction of the facilities that were the reason for this in the first place — Alexander Efremov, Managing Director, Dobroflot Group of Companies .
We [need, – Ed.] less bureaucratic spokes in the wheel of this type of fishing, as viability is the main property of the product, and it depends on time, including the time for bureaucratic paperwork, – Ed.]: there are many certificates that duplicate each other — Dmitry Pashov, President, Moneron.
We need to create a platform where investors can discuss and resolve their questions and problems. As investor’s obligations are strictly regulated by the terms of putting the facility onto operation, we believe that this question needs to be discussed as soon as possible. If these issues are not resolved, at the moment when the facility is ready for operation, the enterprise can have formal questions: the plant has been built, we have fulfilled our obligations, but some criteria, for example, in our case, change of contractor, are not met — Oleg Myachin, General Director, Trier.
After the division of the Far Eastern Shipbuilding and Ship Repair Centre and creation of the Zvezda project, we had only two enterprises left: Amur and Khabarovsk shipyards. Each of them can easily produce from five to eight vessels, with 53–56-metre segmentation and the launching weight up to 2,500 tonnes. So, we have no doubts that we can do everything needed, for example, for the crab boats construction programme — Alexey Rakhmanov, United Shipbuilding Corporation President .
E-commerce does not depend on regulators or depends less on global regulators. I believe that is how our future looks like. We need to get ready for it, so our colleagues and ourselves need to make products that reach specific consumers and are sold through e-commerce — Sergey Darkin, President, Pacific Investment Group (TIGR) PJSC..
We have an intergovernmental commission with each country, and a few of them with China. <…> I am certain that if the agenda of their meetings that take place twice a year includes a separate section on fishing, this could really help solve problems, as after each meeting telegrams are sent to the President and Prime Minister — Leonid Petukhov, General Director, Far East Investment and Export Agency.
Given that we can see prospects on the market for ourselves and the growing demand, I think that we will continue with this project [for live plaice capture, – Ed.]. At the moment, we have purchased two vessels and are reequipping them; and starting 2020, we will begin active implementation of the new stage of this project — Sergey Sklyar, Vice President, Antey .