Increased interest from Russia
AKVA group has worked strategically with the Russian market for years. The efforts have paid off and the company is reaching a total turnover of 170 million over the last 3-4 years.
"Russian Norwegian Business Forum" was held at the Russian Embassy October 22. The purpose of the event was to promote economic cooperation and trade between Norway and Russia. Christen Mordal has been concellor of fisheries in Russia and knows the market very well. It is said that his Russian is more fluent and accurate than that of native Russians. Christen now works as an independent consultant for AKVA group and is in charge of sales in Russia, CIS and Eastern Europe. He spoke during the Russian Norwegian Business Forum and told the audience that AKVA group still experiences a high level of interest from Russian companies, and that the influx has continued to increase after Russia introduced sanctions on imports of seafood in August 2014.
AKVA group has worked strategically with the Russian market for years. The efforts have paid off and the company is reaching a total turnover of 170 million over the last 3-4 years. Four complete cage farms has been delivered to salmon farmers in the Murmansk region. Russian Salmon and Russian Sea – Aquaculture (Now Russian Aquaculture) are the main customers. "We are now experiencing an increase in demands from other parts of Russia and the Far East," says Mordal. The majority of the current revenue comes from cages and cage technology solutions, but AKVA group is also experiencing a breakthrough in interest for recirculation and land based projects. The challenge here is that these projects require more pre-planning and major investments, it takes more time to realize these initiatives. "We hope to deliver the first complete land based recirculation fish farming plant during 2016," says Christen.
Companies often turn to AKVA group with the intention of buying a complete large-scale fish farm, but being a professional supplier and partner means they sometimes have to refrain from doing business.
"We consider whether the customer has the expertise, management and the financial backbone required to run a successful large-scale fish farming operation. We often see a gap between the level of ambition and the actual abilities they have to succeed. It is important that we as a partner function as an advisory and stay honest in our intentions. We are most successful if our customers succeed! It is important for us that the customer understands both the economic and the environmental risks in fish farming. If we see that a potential customer does not have the abilities to succeed, whether it is their lack of expertise, financial strength and/or necessary frameworks needed to run a sustainable fish farming operation, we turn down the opportunity to work with them, "says Christen.
In Russia, most of the revenue comes from the salmon industry, but AKVA group is experiencing increased requests from farmers producing other species such as freshwater trout, catfish, sturgeon, tilapia and seabass and seabream.
Christen was clear in his recommendations. He explained what an enormous asset the biomass is and how important it is to safeguard it by investing in the right technology and tailored solutions. He emphasized that it poses a high risk not to focus on quality and dimensioning. He illustrated this message by showing the audience images of a cage that had been destroyed during a storm. "If one chooses to be cheap and not invest in quality, but buys non certified and poorly tested copies that are not designed to withstand the actual environmental conditions at the site, one could risk losing a biomass worth 10 million EURO in less than half an hour! To save on success critical inputs, such as technology, consultancy and equipment is not good business. It is not possible to save up to profitability in the aquaculture industry, the key is to be smart in your investments, Christen concludes.