The Russian Far East Salmon Industry

1. The Russian Far East Salmon Industry Initial Observations and Strategies for the Wild Salmon Center

2. World Wild Salmon ProductionU.S. Leading Producer

3. Russian Wild Salmon ProductionPink Salmon is Predominant Species Metric Tons Source: FAO FIGIS

4. Global Salmon Markets

5. Relative Salmon Values Average Alaska ex-vessel value per lb

6. Initial Observations: Production • Russian salmon production seems relatively stable if data is correct but poaching is a problem and likely results in production being under-reported • Fish traps seem highly efficient and quality of the salmon is good • By-catch from traps is minimal and traps can be removed or disabled as necessary • At sea salmon fishing less than 10% of total production and declining • Run forecasts often highly inaccurate as government survey resources are limited

7. Russian Salmon Trap Net “fence” anchored from the beach Entrance Holding Pen Trap

8. Sakhalin Salmon Trap

9. Emptying the Trap

14. Initial Observations: Processing • Considerable investment in new plants and equipment • Many plants also own salmon traps • At plants visited processing is basic, i.e. whole gutted, roe and/or canning • Plants generally modern and clean • No plants visited that have U.S. HACCP certification

15. Salmon Processing

16. Salmon Roe Processing

18. German Plate Freezers

19. Processing Salmon at Sea

20. At Sea Salmon Processing 20 kg bag for frozen whole salmon Salmon line on processing ship

21. Initial Observations: Markets • Smaller processors selling to middlemen (traders) in Vladivostok and have minimal knowledge of end markets • Current markets are primarily Japan (sockeye) and domestic (canned, roe and frozen whole) • Japan imports almost 100% of Russian sockeye • Some shipments to China for re-processing and sale of value-added products in U.S. • Domestic seafood market is growing by 15-20% per year • Russian consumers wanting more value-added but industry lacks sufficient capacity

22. Initial Observations: Markets • Moscow sees salmon resource as important to domestic food supply and tightening regulatory process to control quota and fight poaching • Pink and chum salmon least valuable species in world markets and often used for value added products • Strong interest in market expansion Europe and U.S.) and value-added • Little awareness of ecolabels and MSC

23. Domestic Roe Market $18.00

24. Fresh Whole Salmon in Local Market Coho $5.40 per kg Chum $3.60 per kg King $7.20 per kg

25. Some Key Issues Affecting Russian Salmon Industry • Limited government resources for monitoring salmon runs and forecasting • Extent of poaching and under-reporting is not known and likely varies greatly from river to river • Anti-poaching forces are limited and underpaid • Quota holders often subsidize • Lack of end market information • Length of quota period being debated in Moscow

26. Potential Market Incentives • MSC certification of “model” rivers • Pre-assessment to address needs • Collaboration with major buyers in key markets to feature sustainable RFE salmon • Preferential purchasing agreements • Support for regulatory reform • Training programs with U.S. experts • Develop better monitoring and forecasting • Market information/education for processors

27. Potential Market Collaborators • Metro (German retailer with markets in Russia) now sells Russian canned salmon • Trident Seafoods – Major U.S. processor now buying Russian salmon for value-added plant in China • Cerena Holding AG – Swiss group planning Kamchatka investment of up to $400 million for fishing fleet modernization, processing facilities and international marketing network. “Fresh salmon for Europe.” • Japanese markets for MSC certified Russian sockeye (e.g. Aeon)