Big investment project to boost output of kelp salads and convenience products

Fish Processing Combine No.1 is to extend its plant's area in Volkhov by 5 times. The shareholders of this enterprise have found a new niche for a further development of the plant, and now at this regional plant the salads from laminaria and convenience seafood products are to be produced. The project investment cost is 600 million RUB (more than 24 million USD). In the market players' opinion, this decision comes at the right time, as the both market segments are growing and highly profitable.

Forty per cent of OAO ROK-1(plc) (Fish Processing Combine No.1) belong to the European Bank for Reconstruction and Development (EBRD), while CEO of the enterprise Mikhail Soshnik holds 22% of the shares. The remaining shareholders are physical persons. The capacity of the plant allows to produce 20,000-30,000 metric tons per annum. In 2006 the plant's sales volume by value amounted to 4.2 billion RUB. In 2007 it is expected to reach 5 billion RUB. In Saint Petersburg the company's market share is 30-50%.

OAO ROK-1 is also the largest producer of crab sticks and crab meat in Europe. It has 10 subsidiaries in big Russian cities, such as Moscow, Krasnodar, Kazan, Samara, Volgograd and so on. The production facilities of Fish Processing Combine No.1 are located in Saint Petersburg, and the adjacent towns Gatchina and Volkhov.

At present the daily capacity of the subsidiary in Volkhov is 15 tons of different finished products. The initial investments in this project totaled 150 billion RUB. Laminaria and convenience seafood products under TM Marine Planet are only produced at the other plants of OAO ROK-1(plc).

Now the company's share of the market of laminaria based products is estimated to be 30% and according to the company's figures, for the current year it increased the share of the Russian market of laminaria salads by 7%. Laminaria is a promising market segment, the range of the products from it is expanding. In addition in such a big city as Saint Petersburg this product is especially of much importance. But as this product is produced by many companies, OAO ROK-1(plc) is likely to increase its share at the expense of other market players.

The market of convenience seafood products is also considered as promising. The share of frozen processed products in the total volume of fish products has reached 25% and the average annual increase of the Russian fish products output amounts to 12-13% in value terms and 10-11% - in volume terms.