Fishy Happenings On Russia’s Briny Deep
Last year on the island of Sakhalin I took on a fixed-term contract job as CEO of a Russian/Singapore start-up. This settled any doubts in my mind that Adventure and Russia are synonymous. While the main office was established in Yuzhno-Sakhalinsk (the capital city), all operations happened at the little port of Shakhtersk located on the Tatar Straits. Several hours on a very bumpy dirt road leaves lasting impressions. Saying it is at the ass-end of nowhere is being kind, it truly is in the boonies. That being said, it is a place at the cutting edge of Russia’s energetic infrastructure development, and the visionary use of innovative, highly efficient technologies for mining, movement, and trans-shipment of ore. The contrast of old and new is surreal, especially in the context of that out-of-the-way port village. It is there that I was also introduced to local fishermen, their vessels, life, and most importantly their catch. Tasty is an inadequate word!
This was also my first real exposure and immersion into the world of ships, barges, tugs, and offshore transshipment terminals as I was responsible for eight to ten seagoing vessels and their crews. This also was a world of the rusty, creaky ‘old’ working in tandem with the fast shiny ‘new’, with all of the frictions and incongruencies associated with that. It is then that I noticed even over the space of only one year, a very visible upgrading of vessels under the Russian flag. Everything from cargo ships, self-propelled barges, to the many commercial fishing vessels populating Russia’s waters are being replaced. The coastline of the Russian Federation is the fourth-longest in the world, and the Russian fishing industry has an exclusive economic zone (EEZ) of 7.6 million square kilometers that includes access to twelve seas in three oceans. With all that, you can imagine how many fishing vessels (and not only) are needed to work the briny deep of that neighborhood.
The Russian ship fleets have been plagued with bad PR since the fall of the Soviet Union. Old vessels, rustbuckets not up to current safety norms, little care about ecology, leaky, and so on. This was largely true, mostly due to the lack of capital in the late 1980s and 1990s during the dog days of Perestroika. What has steadily evolved since then, and shifted into high gear since 2010 is the rebirth of shipbuilding in Russia and the significant upgrades to the various fleets both commercial and military. The fishing fleet is a good example and one which may surprise some as it is a subject that is not exactly front-page press when there are pandemics, trade wars, currency wars, war-wars, rioting, and election wars for media to salivate over.
Today there are over thirty fishing ships contracted and being built in Russia with more than 120 ships to be built by 2025. They will replace half of the fleet in this segment. These are vessels that do just about everything in one place, from trawling to processing, packaging, and freezing on board.
Among these new vessels, the largest is called the ‘Victor Gavrilov’, known as a freezer-trawler, whose length is 121 m, width – 21.6 m, displacement – about 13,000 tons. The ship will be equipped with a pelagic trawl and will have a fish processing plant and freezing holds for keeping ready-to-distribute products in tip-top shape. Multifunctional modern fish processing plants installed on these and similar new trawlers allows for the production of fillets frozen at the sea, canned cod liver, fish meal, and several other by-products. In short, nothing is dumped overboard, everything caught is utilized – wasteless and Eco-friendly. These new-generation Russian fishing trawlers are notable for their capacity of making products with high added value which has been more than doubled when compared with the existing ships. In addition, almost all of the new ships are ice-capable to one degree or another, keeping the Arctic fishing fields in clear commercial sight.
Sanctions served to kick-start Russia’s recent policies of import substitution, emphasizing ‘Made in Russia’, and the large-scale renovation of Russia’s fishing fleet is well on its way. New state support measures have begun in 2017 in compliance with the fishery law – fishing quotas for investment purposes. These recent Investment quotas are to apply for construction of more than 40 vessels and over 20 plants, thus renovating about 65% of the fishing fleet operating in the Northern Basin and 25-30% of the Far East fleet. Together with the new fish processing plants, this measure will allow for an increased share of products with high added value by up to 40% of total production. In addition to this, there is a new measure of state support currently under development which is financial subsidies to cover capital expenses for the construction of midsize and small fishing vessels. These new measures will allow for a further 120 vessels to be built by 2025, replacing 50% of the old.
Then we come to the new fishing trawler called the ‘Captain Sokolov’, a truly innovative vessel dreamed up and designed by the company ‘Nautique Rus’. Since its launch in August 2020, the ‘Captain Sokolov’ has been dubbed as one of the most modern trawlers not only in Russia but in the world. This is the first that was launched in a series of ten which are in the shipbuilding pipeline. The hull of the vessel has a capsule shape with streamlined contours, which gives the trawler increased seaworthiness (including the ice) and additional energy efficiency. It has a length of 81.6 m; width – 16 m; displacement – 5500 t; speed – 15 knots; main engine power – 6.2 MW; total productivity – 150 tons of fish per day; and a freezing capacity – 100 tons of fish per day.
The vessel has a state-of-the-art unique fish-processing factory, which will not only shorten the time from the fresh fish catch to the manufacture of finished products but also has zero waste by converting waste into usable processed fish meal. Thanks to the onboard preservation of raw materials after the catch, the products retain all their tasty and health-useful elements. Another non-fishy aspect is that this (and similar) new vessels make use of an automated palletizing system, which not only reduces labour costs of the crew, and reduces the time for unloading the catch, but also prevents damage to the products.
So how do these new fishing vessels Russia is now building play into the bigger economic picture? They play a key part in the fast-expanding trade tapestry in China’s search for reliable agricultural imports, giving Russia a major opportunity to expand trade relations with China beyond oil and gas exports and a reliable partner for China’s food security. China is already the destination for 60% of Russia’s seafood exports, a new fleet should grow the numbers and permit reaching still other export markets, which at initial stages will probably involve countries along the belt & road (BRI) initiative. Speaking of the BRI and the over 2,500 infrastructure projects now on the cusp of completion, the linked opportunities for Russian agro exports will increase dramatically and for many years to come.
China’s decreasing trade volumes with the US due to the current trade wars and sanctions craze has enabled Russian suppliers to increase their share of this market. In 2019, the total Russia-China trade turnover totalled $110.75 billion, showing a modest growth of 3.4% YoY, but now agriculture has established itself as the fastest-growing component of this positive increase. So far 2020 the developing trade and investment Russia is experiencing with China has seen a trade growth increase of about 5-6%, which in any market is not a shabby percentage.
Moscow, October 6, 2020