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Russian billionaire eyes fish hatchery venture

Russian billionaire Ara Agalarov is entering the aquaculture and hatchery business.

Known for his luxury retail empire in Russia, Agalarov looks to expand his portfolio with the purchase of aquaculture enterprise, Lotoshinsky fish factory. The announcement of this new business venture came from recent statements made by representatives of the businessman and some Russian aquaculture analysts.

The fish factory was purchased at RUB130 million (US$2 million) – a big sum for the Russian aquaculture industry, which has valued the facility as significantly lower than those of other local fish producing sector.

The Lotoshinsky fish factory, located in the Volokolamsk district of the Moscow region, was founded during Soviet times and was one of the major producers of crucian carp and trout during the 1980s. In 2010, the plant declared bankruptcy, which resulted in the suspension of its operations.

According to a spokesman of Agalarov, the businessman plans to invest at least RUB200 million (US$3.24 million) to restart the enterprise. It is expected most of these funds will be allocated for growing fry for its needs. At the same time, part of the breeding material will be imported.

At the initial stage, the company will focus on growing trout and carp, with the possibility of expanding to other species in the coming years.

The company plans to sell most of its future produce in the European part of Russia which traditionally experiences a shortage of fresh fish. Most of the fish supply in that region are caught in the far east part of the country, and takes seven to 10 days to be delivered to the central part of Russia.

The Russian government has welcomed Agalarov’s latest project, believing that its successful implementation will help address the shortage of breeding materials in the Russian aquaculture industry.

Ilya Shestakov, head of the Russian federal fisheries agency (Rosrybolovstvo), said that despite several investment projects that have been implemented in the domestic industry in recent years, the Russian aquaculture industry continues to be heavily dependent on imports of fish breeding material.

The agency is looking to support a number of facilities (including those of Agalarov’s), specializing on the production of fish breeding material that will be commissioned across Russia.

So far, plans for building large-scale facilities to grow smolt have been announced for the Russian Northern regions, such as the Murmansk region and Karelia. The projects will be implemented by local investors.

In addition, Shestakov said Russia plans to accelerate research and development activities in fish hatchery. The government has already approved the establishment of three research centers that will specialize on the growing and breeding of fry, to be located in the Karelia, Siberia and one of the southern regions of the country.

According to data from Rosrybolovstvo, the annual volume of production of fish breeding material in Russia is currently in the range of 30,000 to 33,000 tonnes.