Processing of Pelagic Fish, Trondheim, October 18, 2006 (1)www.sintef.no/ppf

Processing of Pelagic FishPolish-Norwegian Cooperation

Britannia Hotel, Trondheim, October 18, 2006

Organized by:

Aleksandra Buczkowska, Innovation Norway, Poland:Norwegian - Polish trade with fish - trends in the herring market

Norwegian-Polish trade with fishTrends in the herring market

TRONDHEIM 18.10.2006

Aleksandra Buczkowska

Innovation Norway - Warszawa

Processing of Pelagic Fish, Trondheim, October 18, 2006 (2)www.sintef.no/ppf

Macroeconomics

Source: OECD

Area: 312 thou. km2

(9th in Europe, 63rd in the World)

Population: 38.2 million

(8th in Europe, 30th in the World

Currency:

Polish Zloty (USD 1 ≈ PLN 3.14)

Poland’s attractiveness

Processing of Pelagic Fish, Trondheim, October 18, 2006 (3)www.sintef.no/ppf

Macroeconomics

3,2

-7,0

2,03,8

5,27,0 6,0 6,8

4,8 4,1 4,0

1,0 1,4

3,85,3

-8,0

-6,0

-4,0

-2,0

0,0

2,0

4,0

6,0

8,0

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Macroeconomics

6,8

5,9

4,8

4

2,22,9

3,94,3

5,2

1Q 2004 2Q 2004 3Q 2004 4Q 2004 1Q 2005 2Q 2005 3Q 2005 4Q 2005 1Q 2006

GDP per head PPP: USD 11,970 - 46% of EU level

GDP total: USD 293.2 bn

GDP per head: USD 6,336

GDP growth: 5 % (YY 2006)

Processing of Pelagic Fish, Trondheim, October 18, 2006 (4)www.sintef.no/ppf

Macroeconomics

2,13,5

76,8

19,8

45,336,9 33,3

553,6

2815,1 11,7 7,3 10,1 5,5 1,9 0,8

0

50

100

150

200

250

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Inflation in Poland 1990-2005

The situation and outlook on the fish market in Poland

Tradition in herring processing and herring consumption

Modern fish industry with good growth opportunities

Large internal market (38mil) with potential for increase

Good position for entering into big consumer markets in Europe

Export orientation–growth in export of finished products

A variety of products and priority on product development

Highly qualified and cheap labour (technologists, workers)

Positive view on seafood – healthy and right for the environment

Processing of Pelagic Fish, Trondheim, October 18, 2006 (5)www.sintef.no/ppf

Poland - an attractive trading partner for Western Europe

Market development 2005 : IMPORTS

Decreasing supplies of raw material from domestic catches

Imports - the most important source of supplies (60%)

Supplies of fish to the Polish market exceeded 290 000 tons

worth 4 320 529 000 NOK, 540 m EUR

9% increase in volume

30% increase in value

Poland - an attractive trading partner for Western Europe

EXPORTS

138 000 tons, worth 480 m EUR

Expected increase in trade and manufacturing of finished products

(Polish processors benefitting from lower labour costs, upgrading of production facilities, dynamic business environment, good infrastructure ect.)

Fish processing one of the fastest developing branches of agro-food sector ( profitability rather low)

EU accession led to simplification of production profile, specialization, increase in production scale, capital concentration

Processing of Pelagic Fish, Trondheim, October 18, 2006 (6)www.sintef.no/ppf

Poland - an important market for Norwegian seafood

Poland is one of the largest markets for Norwegian

seafood in Central Europe.

Export of fish and seafood make up around 27% of the total export value from Norway to Poland

Norway is still the main supplier of fish and fish products to Poland.

In 2005 the volume of import from Norway reached 86 000 t

(29,5% of total volume of fish import) and the value amounted to 1.457 mill NOK.

Poland - an important market for Norwegian seafood

© EFF, Datakilde=SSB

2005 2004 Diff

Russland 3726 2527 1199

Danmark 3057 2971 86

Frankrike 3013 2437 576

Japan 2592 2604 -12

Storbritannia 2041 1579 462

Portugal 1636 1686 -50

Sverige 1561 1463 98

Polen 1424 949 475

Tyskland 1307 1430 -123

Italia 1188 1202 -14

Ukraina 1143 760 383

Kina 1097 868 229

Spania 1086 934 152

24871 77%

Processing of Pelagic Fish, Trondheim, October 18, 2006 (7)www.sintef.no/ppf

Poland - an important market for Norwegian seafood

020406080

100120140160180

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

1000

tonn

es (p

rodu

ct w

eigh

t)

02004006008001000120014001600

mill

. NO

K

1000 tonn mill. NOK

© EFF, Datakilde=SSB

Poland - an important market for Norwegian Seafood

020406080

100120140160180

1990

1992

1994

1996

1998

2000

2002

2004

200610

00 ton

nes

(pro

duct

wei

ght)

OtherSalmonMackerelHerring

© EFF, Datakilde=SSB

Processing of Pelagic Fish, Trondheim, October 18, 2006 (8)www.sintef.no/ppf

Herring supplies on Polish market, 1990-2005 (live weight equivalent)

0

20 000

40 000

60 000

80 000

100 000

120 000

140 000

160 000

180 000

200 000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

[tons

]

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

[impo

rt/to

tal s

uppl

y]

Catches

ImportImport/total

Polish Imports of Herring (volume)

40 %30 %

34 %28 %

50 %46 %

71 %

81 %84 %

0

20000

40000

60000

80000

100000

120000

140000

Herring import total

Norw ay

procent

Herring import total 128640 120498 102117 80856 81945 95822 87107 39289 47970

Norway 107860 97677 72761 37590 40643 27001 29240 11763 19400

procent 84 % 81 % 71 % 46 % 50 % 28 % 34 % 30 % 40 %

1999 2000 2001 2002 2003 2004 2005 Jan-Jul 2005

Jan-Jul 2006

Processing of Pelagic Fish, Trondheim, October 18, 2006 (9)www.sintef.no/ppf

Developments in herring import to Poland, 1997-2005

Iceland succeeded to gain almost one-third of the market for herring supplies to Poland

0

20 000

40 000

60 000

80 000

100 000

120 000

140 000

1997 1998 1999 2000 2001 2002 2003 2004 20050

50 000

100 000

150 000

200 000

250 000

300 000

350 000

400 000

450 000

500 000

NORWAYICELANDTOTAL tonsTOTAL PLN

Production of fish processing plants with more than 50 employees in 2004 and 2005

Fresh and chilled fish 13 660 14 771 8%Frozen fish whole 21 875 27 767 27%Fresh fillets 2 467 4 759 93%Frozen fillets 34 773 47 764 37%Salted fish 13 271 14 486 9%Smoked fish 23 750 36 379 53%Canned and marinated 111 573 118 438 6%

- canned 53 593 56 850 6%-preserved 6 176 6 514 5%-marinated 51 804 55 074 6%-of salmon 1 887 1 222 -35%

-of herring 67 377 78 883 17%-of sardines and sprats 15 074 11 558 -23%

-of mackerel 7 841 6 775 -14%

-others 19 394 20 000 3%Other fish products 8 049 14 989 86%Grand total 229 418 279 353 22%

2004 2005 2005/2004

Processing of Pelagic Fish, Trondheim, October 18, 2006 (10)www.sintef.no/ppf

Value and volume of fish processing production in Poland, 2001-2006

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

2001 2002 2003 2004 2005 2006

[val

ue]

0

50

100

150

200

250

300

350

400

[vol

ume]

Value (PLN, million)

Volume ('000 tons)

2006 – forecast.Source: Rynek Rybny (Fish Market)- Current state and perspectives. April 2006.

Volume and price of exported prepared and processed herring products, 1999-2005

The increase of herring prices had most influenced the domestic market.

Germany - the main country of destination for herring products exported from Poland. Their share in the volume and value of export has exceeded 70%.

5 000,0

10 000,0

15 000,0

20 000,0

25 000,0

30 000,0

35 000,0

40 000,0

45 000,0

1997 1998 1999 2000 2001 2002 2003 2004 2005

[tons

]

0

1

2

3

4

5

6

7

8

9

10

[zł/k

g] tonszł/kg

Processing of Pelagic Fish, Trondheim, October 18, 2006 (11)www.sintef.no/ppf

The fish consumption in Poland

EU - 26,2 kg/ per capita (live weight)

Poland – 11,5 kg

56% lower than the EU average; 35% than the world average

76% of population want to eat fish (test of preferences)

Estimated fish consumption by fish species:

MPR, Rynek Rybny

Processing of Pelagic Fish, Trondheim, October 18, 2006 (12)www.sintef.no/ppf

2,51 kg per capita (2005)

25% decrease

Decreasing share of herring in the total fish consumption

30% in 1999-2001

21% in 2005

Cause of:

high prices of herring

growing interest in white fish, salmon, pangasius

0

0,5

1

1,5

2

2,5

3

3,5

4

4,5

1999 2000 2001 2002 2003 2004 2005 2006f

herr

ing

[kg/

per c

apita

]

5

6

7

8

9

10

11

12

13

14

tota

l [kg

/per

cap

ita]

HerringTotal

Consumption of Herring

Consumption barriers for seafood:

High price on fish products compared with agricultural goods

Only 1,3 mil. households (10%) can be placed as a middle class with income between 7-15 thousand PLN

Weak local distribution of fish, specially fresh

Weak marketing of fish products

Low level of knowledge by the consumers

Quality

Processing of Pelagic Fish, Trondheim, October 18, 2006 (13)www.sintef.no/ppf

Retail sales of fish products :

The sales of fish products are concentrated in modern commercial networks, with a growing share of supermarkets as compared to hypermarkets and traditional food stores. This distribution channel is particularly important for chilled herring products since it generates 70% of the sales value.

Lo k a lis e r in g a v s a lg ( i %) F is k e p r o d u k te r m e d s ild s o m d o m in e r e n d e r å s to f f

2 6 ,43 6 ,1

2 1 ,74 0 ,3

2 0 ,4

3 3 ,63 5 ,6

3 0 ,4

3 2 ,5

3 2 ,6

9 ,57 ,3

9 ,6

8 ,1

1 0 ,9

1 5 ,21 1 ,6

2 3

1 1 ,1

1 7 ,1

1 5 ,2 9 ,3 1 5 ,3 7 ,91 9

0 %

2 0 %

4 0 %

6 0 %

8 0 %

1 0 0 %

Fis ke p ro d u k te r(ko n s e rve rte )

to ta l

Avk jø l tes i ld e p ro d u k te r

F is ke s a la te r S m ørb a rtfis ke p å le g g ,

s ka lld yr

F is ke h e rm e tikk

H yp e rm a rke d > 2 5 0 0 S u p e rm a rke d < 2 5 0 0 S to r m a tva re b u tikk Me llo m s to r m a tva re b u tikk L i te n m a tva re b u tikk

Price indices for selected consumption products in 2000-2005 (2000 =100).

90

100

110

120

130

140

150

2000 2001 2002 2003 2004 2005

[%]

inflation food and non alcoholic beveragesmeat and meat products fish and fish productsfresh and frozen fish

salted herring

canned fish

Processing of Pelagic Fish, Trondheim, October 18, 2006 (14)www.sintef.no/ppf

Reteilsales of Herring

Total HerringTotal Poland

MAT Data

18333 18664 1911719840 20452 19804 20076 20535 20839 20984 20746

21746

21387 21672 22080 22564 23246 22647 22924 23401 23792 24046 23943 24969

49510 50301 51351 52689 53884 52459 53113 54131 54706 54953 54653 56659

0

4000

8000

12000

16000

20000

24000

JJ 2004 AS 2004 ON 2004 DJ 2005 FM 2005 AM 2005 JJ 2005 AS 2005 ON 2005 DJ 2006 FM 2006 AM 20060

10000

20000

30000

40000

50000

60000

70000

Sales Volume in 1000 Kgs Sales Value in 10 000 Pln Sales Items in 1000 Item

FIFG 250 mill EUR – 120 applicationsSectoral Operational Programme –Fisheries and Fish Processing 2004-2006New Programme 2007-2013

Modernization of fish boats

Adjustment and structural changes in fishery capacity

Facilities in fishing harbor

Investment in infrastructure and fish processing equipment

Organization of fish market and marketing of fish products

Implementing of hygiene requirement; quality assurance, food safety

Investments in infrastructure, logistic and technology development

Improvement of competitiveness

Search for new markets

Environment – reduction of emission

Processing of Pelagic Fish, Trondheim, October 18, 2006 (15)www.sintef.no/ppf

Level of investments and investment rate in fish processing sector, 1996-2005.

* total investments/depreciation, 2005 – data for 3 quarters

3,01

2,39

1,86 1,82

2,192

1,25 1,27

3,22

2,14

15,4 15,7 16,8 16,619,6 19,5

12,215,7

44,7

51,08

0

0,5

1

1,5

2

2,5

3

3,5

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

[%]

0

10

20

30

40

50

60

[USD

, mill

ion]

investment rate %*investment (mUSD)

Conclusions

Growth factors for the Polish market of herring products:

Increase of the economic prosperity

Stabilisation of raw material prices

Development of modern trade and adaptation to the value chain in global context

New investments in the processing sector financed by the EU funds

Further positive export growth. Planning towards new costumer groups

Food safety requirements

Programme

Welcome by Karl A. Almås, SINTEF Session 1: Norwegian-Polish trade with fish

Norwegian - Polish trade with fish - trends in the herring market. Aleksandra Buczkowska, Innovation Norway, Poland The European Market for Pelagic Products - Challenges for Norwegian and Polish Fish Industry. Børge Grønbech, Norwegian Seafood Export Council, Norway

Session 2: Technology and processing of pelagic fish The processing and consumption of pelagic fish in Poland – today and tomorrow. Piotr Bykowski, Sea Fisheries Institute, Poland Processing challenges arising from customer/market product specifications. Ragnvald L. Vågsholm, Global Fish, Norway Technological solution and possibilities to create an effective and profitable pelagic food industry. Stig Jansson, SINTEF Fisheries and Aquaculture, Norway

Session 3: Implementation of traceability in the industry

The possibilities and difficulties of implementing advanced traceability systems within the Polish fish industry. Olga Szulecka, Sea Fisheries Institute, Poland The importance in using international traceability standards in production and export of pelagic products. Status of global traceability requirements compared with existing solutions. Eskil Forås, SINTEF Fisheries and Aquaculture, Norway Demonstration of traceability systems based on European standards, by Geir Myrold, TraceTracker Innovation ASA, Norway

Session 4: Industrial cooperation between Norway and Poland

Industrial cooperation between Norway and Poland – what are the main challenges, by Krzysztof Szymborski, Rieber Foods Polska SA, Poland

Summing up. Torgeir Edvardsen, SINTEF

Organizers