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July | August 2014

Ukrainian Fish Farming:
Opportunities for growth

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The International magazine for the aquaculture feed industry

 FEATURE

Ukrain
ian Fis
Oppor h Farm
tunitie ing:
s for g
rowth
OVER 40 PERCENT OF
UKRAINIAN MEAT PROTEIN
CONSUMPTION IS DERIVED
FROM FISH

O
n June 27, 2014 Ukrainian
president Petro Poroshenko
signed an Association
Agreement with the European
Union. Many Ukrainians are hopeful that the
signing of this agreement will mark a change
in the economic fortunes in a country where
economic growth has lagged behind its
neighbours in recent years.
One sector hoping to benefit from such
providence is the Ukrainian fishing and aqua-
culture sector.
With a population of over 45 million peo-
ple, infrastructure and distribution enhance-
ments in recent years have made Ukraine an
attractive consumer market.
Across the country, the supermarket net-
work has increased exponentially over the
past 10 years. Supermarket retail sales have
trebled in the past 10 years to over US$50
billion per annum.
Food retail sales alone have increase by
160 percent in the past five years.
Ukraine has a largely urban population.
The largest 25 cities have a combined popu-
lation greater than 15 million people. Fifty
percent of current retail sales occur in the five
largest urban markets.
Presently, over 40 percent of Ukrainian
meat protein consumption is derived from
fish.
Ukrainians consume on average 14 kilo-
grams of fish per capita per annum, double
the consumption levels of the 1990s. This per
capita consumption is expected to increase
further to 20kg per capita by 2020.
With a total market size exceeding 600,000
tonnes per annum, Ukraine has a significant
trade deficit in fish.
With an aging fleet and lack of invest-
ment, Ukraines domestic catch has declined
from approximately 350,000 tonnes in 2000
to 200,000 tonnes today. At the same time
demand for fish products have continued to
grow, with fish imports exceeding 425,000
tonnes in 2012.
Whereas the value of Ukrainian fish
exports has never exceeded 20 million
over the past 10 years, the value of imports
has continued to skyrocket. Fish imports
exceeded 650 million in 2013.
Domestic opportunity
The value of Ukrainian fish imports has
increased by 55 percent in the past five
years. 70 percent of these imports consist
of frozen products. However, an interest-
ing trend has been the growth of fresh or
chilled fish imports, the value of which have
increased by close on 300 percent in the
past five years.
Little sourced from aquaculture
Presently, only 13 percent of domestic fish
production is sourced from aquaculture.
Consequently, Ukraine has the opportunity
to expand its fish farming activities to meet
growing market demand. With this growing
demand for fresh quality product, Ukrainian
entrepreneurs have started to look at busi-
ness opportunities for domestic aquaculture
ventures.
One such company, FishFarm Ukraine, is
a Ukrainian start-up whose founders have an

Table 1: Exports from Ukrainian to neighouring countries

Total Fish Fresh Whole Percent of Total

2013
Imports 000 Imports 000 Imports Table 2: Imports of fish into
Ukrainian in value
Million

CEE 2,940 1,063 36 percent

CIS 3,254 913 28 percent

Poland 1,316 649 49 percent

Russia 2,154 734 34 percent

Belarus 317 63 20 percent

14 | INTERNATIONAL AQUAFEED | July-August 2014

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establish track record within Ukrainian busi-
ness circles.
They told International Aquafeed, at the
Future Fish Eurasia exhibition, that working
with international partners who all spotted an
opportunity in the industry and are looking
for investment.
The aim is to help restore Ukraine to be
the bread basket of Europe again.
They are complimenting their local knowl-
edge and experience with international tech-
nical fish expertise and food business know-
how.
Founding partner Petro Berezhnyi explains,
Through our relationship with key Ukrainian
food retailers we discovered that there is a
shortfall within the Ukrainian market for fresh
fish.
We see an opportunity in the market
place to develop an aquaculture business in
Ukraine that is focused on delivering quality,
freshness, and superior customer service.
Ukraine has over 71,000 rivers and lakes.
In particular Mr Berezhnyi sees the opportuni-
ties to locate such fish farms in the western
half of the country where the topography,
infrastructure and water quality is ideal for
aquaculture growth.
For decades Ukraine has had a renowned
reputation as a leading agricultural producer
and exporter.
To put the country into a European
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context, Ukraine has a greater landmass than
France. Fifty-four percent of Ukrainian land is
used for agriculture, ranking it third globally
in this area.
In fact, Ukraines agricultural arable land
area is almost one-third of the existing agri-
culture land area of the entire European
Union. FishFarm Ukraine also plans to take
advantage of Ukraines prowess as a leading
food producer.
Advisory Board Member, Tom OCallaghan
says, Ukrainians traditionally appreciate high
quality food.
Yet, at the same time Ukraine needs to
do more to promote itself across the world
as a country with an abundance of natural
resources that compliment superior food pro-
duction. As we enter into the EU Association
Agreement we anticipate both an overhaul
and modernisation of Ukrainian food legisla-
tion, coupled with a greater awareness across
Europe of the food production capability of
Ukraine.
We strongly believe that these two fac-
tors will also help strengthen and grow our
business.
Regional Growth
Indeed, Ukraines position as one of the
10 designated Central and Eastern Europe
(CEE) countries and traditional relationships
with neighbouring former Soviet Union,
July-August 2014 | INTERNATIONAL AQUAFEED | 15
FEATURE
Commonwealth of Independent States (CIS)
countries facilitate the potential for greater
regional growth.
Neighbours Poland, Russia and Belarus
imported over 1.4 billion in fresh fish in
2013.
Regional demands for fish products with
continue to outstrip supply for the foresee-
able future. This adds to the attractiveness of
aquaculture development across Ukraine.
As illustrated in the table above, CEE &
CIS countries account for about 8 percent
of global fish imports. However, the signing
of the EU Association Agreement will bring
added possibilities for Ukrainian food busi-
nesses to develop business within the worlds
largest import market for fish. Mr. Berezhnyi
concluded, Our existing business model
is initially focused on fulfilling the untapped
demands of the local Ukrainian market.
Nevertheless, looking into the horizon, we
foresee teaming up with international part-
ners to exploit wider export opportunities
across Europe. Their plan is formulated to
start with farming trout due to its adaptabil-
ity on land, the high quality of the product
and because it is a good value for money
alternative to salmon. A leaving hint from
Mr. Berezhnyi at moving to farm additional
species such as crayfish, and cheap sorts of
fish like carp in the future could be an excit-
ing development for this fish farm.
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