Investment helps upgrade fleet, promote Russia’s Arctic fishery

JSC Sevryba of Russia, Orskov Christensen Skibsvaerft A/S of Denmark and Royal Greenland A/S of Greenland have entered into two joint ventures to help upgrade Russia’s fleet and market its catch. The first joint venture, Sevryba International Ltd., seeks to modernize JSC Sevryba’s 240-ship fleet by adding four new trawlers. The second joint venture, Royal Ryba A/S, aims to share Royal Greenland’s knowledge in production, quality control and sales of Russian products.
Two joint ventures between Russia’s JSC Sevryba, Denmark’s Orskov Christensen Skibsvaerft A/S and Greenland’s Royal Greenland A/S are modernizing Russia’s northern fishing fleet based in Murmansk and developing sales and marketing for the fleet’s catch.

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All three companies have joined in one of the joint ventures, Sevryba International Ltd., which plans to upgrade JSC Sevryba’s 240-ship fleet with modern vessels by the year 2000. Additional funding is being sought from the European Bank for Reconstruction and Development, the 10 (Investment Fund for Eastern Europe), the Skibskreditfonden (Danish ship credit fund) and other Danish investors.

Immediate orders totaling DKK 500,000 were placed with Orskov Christensen for four new trawlers, the first of which was to be delivered by the end of 1996, for operations in the Barents Sea. JSC Sevryba and Royal Greenland, meanwhile, formed another joint venture, Royal Ryba A/S, to share Royal Greenland’s know-how in production, quality control and sales with the Russians and ensure effective management and sales for Russian products.

JSC Sevryba is based in Murmansk, where the Russian fleet is based; Orskov Christensen in Frederikshavn, Denmark, where the new ships are being built; and Royal Greenland in Nuuk, Greenland, source of the coldwater prawns that account for much of its business. Sevryba International is domiciled in Cyprus for legal reasons, but Royal Ryba is based in Aalborg, Denmark – also headquarters of the Royal Greenland Overseas marketing arm.

Sevryba emerged as a joint stock company from privatization of the former Soviet Union’s Arctic fisheries. Today it accounts for about 25% of all Russian fishing activities with a catch last year projected at 750,000 tons, including 330,000 tons of cod. Besides cod, Russia’s northern waters harbor extensive resources of pollock, haddock and redfish. Unlike many of the world’s overfished resources, they appear to be stable and thus inspire buyer confidence.

Orskov Christensen has already been doing repair work on the Russian fishing fleet for several years, while Royal Greenland has been involved in modernization of the Greenlandic fleet. Initial capitalization of Sevryba International is DKK 200 million, but that could increase with additional financing. JSC Sevryba and Royal Greenland each have a 50% stake in Royal Ryba, which is chaired by Jorgen Fossheim, already manager of Royal Greenland Overseas.

The 58-meter trawlers are being equipped to process 150 tons of fish a day to produce 50 tons of frozen finished products, plus 15 tons a day of shrimp.

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