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Big chill hits Iceland's fishing industry; 8% loss, massive layoffs are predicted.

Iceland's fishing industry is facing an eight percent loss this year, and a lot of fishermen are going to be out of work, predicts the National Economic Institute (NEI), if nothing is done to rationalize and restructure the industry.

Based on projected catches and current price levels, there is no way the industry can make a profit this year as it is presently organized, the NEI said. From a 2.2% profit for 1991, demersal processing operations went to a one percent loss last year, and will lose 8.5% this year, the group said. Land-based frozen fish plants made a bare 0.3% profit last year, the NEI believes, but will also go in the red this year.

The agency made its bleak forecast after having previously been criticized for fudging projections on freezer-trawler profits, with a claim that freezing cod at sea would be 10-25% more profitable than land-based processing. Arne Benediktsson of Iceland Seafood International Ltd. told the 51st Fisheries Conference that the NEI projected profits "were simply wrong," and that factory trawlers actually lost 4.8% last year and will probably lose 5-7% this year.

NEI projections failed to take into account falling revenues due to trawlers switching from scarce cod to abundant redfish, which isn't subject to quotas, nor did they exclude the impact of subsidies from the Fisheries Price Equalization Fund. Even as he spoke, fish prices were falling 1.5% due to European currency fluctuations; at sea-frozen seafood and peeled shrimp were among the products hit hardest.

Iceland has encouraged processing of seafood at home by reducing the catch quotas of companies that export unprocessed products; for the 1991-92 fiscal year, the penalties totaled 10,000 tons, worth $5.5 million. With 60% of the processing companies running at a loss last year, the government is moving to reduce the industry's debt ($1.465 billion, of which 56% is in foreign currency and 70% indexed to exchange rates) to stave off a wave of bankruptcies and layoffs in a country where unemployment has been virtually unknown.

Samband of Iceland, the biggest player in the industry, was so strapped that it agreed to sell 76% of its assets to the National Bank of Iceland holding company, Homiur hf. That divestiture, which brought in $40 million, included 41% of Iceland Seafood International, 84% of a shipping company, 49% of a coffee company, 33% of an oil company, etc. The sale reduces Samband's assets from $54 million to $16.5 million, but increases its equity ratio to 47-48%. Sigurdur B. Markusson, chairman, and Gudjon B. Olafsson, director of Samband, will leave the company on Jan. 1, 1994.

Meanwhile, the lowest cod catch in 50 years has led to a call for quota cuts of 28-34% to preserve the resource. According to a recent article in News from Iceland, "If developments continue as expected, the number off freezing plants is likely to be reduced, leading to serious unemployment which it is feared could reach as much as 10-20% - in some towns and villages which depend on cod fishing for their livelihood."

Iceland Seafood Debuts

Tray-Pack IQF Fillet Cuts

Tray packs of IQF natural fillet cuts have been introduced for the retail market by Iceland Seafood International Ltd., Reykjavik.

Fillets for the transparent packs are cut from skinless and boneless fillets of Icelandic cod, Greenland halibut, haddock, redfish and ocean catfish. The packaging lets consumers inspect the products at the time of purchase, and the products themselves appeal to health-conscious consumers because they are low in calories and cholesterol.

The tray packs, already carried in private label by Marks & Spencer in the UK, join a line that includes fixed-weight 400-gram packs, 800-gram family packs, and polybags of both fish fillets and prawns.

Seafood Quality in Alaska:

It's Not Just a Fish Story

A promotional poster has been developed by the Alaska Fisheries Development Foundation to carry the story of quality and the factors that affect it to the public.

Available for $5 to anyone in the groundfish industry, the poster outlines the factors (temperature changes, seasonality and biological changes in the fish) that most strongly affect the quality of Alaskan groundfish - pollock, Pacific cod and flatfish - and tracks their changes through the year. It summarizes results of a comprehensive study, the first of its kind, carried out by the Foundation last year.

Copies are available from the Foundation at 508 West Second Ave., Anchorage, Alaska 99501, USA; phone 907-276-7315, fax 907-271-3450.

Loans Benefit Fisheries

In Developing Countries

The Asian Development Bank (ADB) has made a loan of $100 million to help a fisheries project in Indonesia expand production to meet domestic demand and increase exports. In addition, a technical assistance grant of $512,000 was authorized to study development potential in eastern Indonesia.

Meanwhile, the ADB approved a loan of $6.9 million to help the government of the Marshall Islands initiate a domestic commercial fish production and marketing capability, as well as establish the technical, administrative and resource management services needed to support private investment in the fisheries sector.

Elsewhere, the Inter-American Development Bank has lent Mexico $140 million. It will be used to finance the repair and equipping of tuna and shrimp fleets, construction of processing plants and breeding ponds, and the organization of transportation and marketing networks.

The European Investment Bank is finding the modernization and expansion of an industrial shrimp harvesting concern in the northern part of Madagascar. It involves the replacement of three fishing trawlers and the overhauling of a shrimp processing plant.

How to Avoid Fish Fraud

Spelled Out in New Book

Seafood Scams and Frauds and How to Protect Yourself, a new book by Ian Dore, focuses on ways to spot con artists at work and offers tips for businesses to become more resistant to rip-offs.

The 159-page hard cover volume covers financial irregularities ranging from simple cheating on invoices to complex, large-scale scams involving fake companies. Also addressed is the problem of product misidentification that probably costs the industry more money than financial misdeeds. Advice is given on how to guard against paying for improper species, sizes, weights or inferior quality products.

Selling for US$ 49 per copy, the book is available through Urner Barry Publications, P.O. Box 389, Toms River, NJ 08754 USA.

Stop Killing Off Fisheries,

Trade Organization Appeals

Nations of the world should stop polluting the oceans, manage their fishery stocks more rationally, and end politically-motivated restrictions on production and trade, declared the International Coalition of Fisheries Associations (ICFA).

Meeting in Reykjavik, Iceland, Sept. 1-3, the ICFA urged world governments to take immediate in dependent and collective action to preserve and enhance marine resources and their use as a critical food source and economic base.

The coalition represents trade associations in Germany, Taiwan, Canada, Iceland, Japan, the United States, New Zealand, Korea and Norway. Some of its positions are expressed in vague terms; an appeal for "all nations to refrain from imposing their cultural values on other nations" by repealing "unilateral laws" and "illegal trade sanctions," for example, apparently has to do with U.S. regulations against tuna that isn't caught in a dolphin-safe manner. The ICFA also called for marine mammal management to "be conducted on a regional basis and, where feasible, in conjunction with fishery management programs." This evidently has to do with whaling - and perhaps also with control of the seal population, which the organization sees as a growing threat to fishery stocks.

Other ICFA positions are hardly that controversial. The impact of major changes in ocean conditions on fishery stock abundance must be scientifically studied in greater precision in order to more adequately control fishing efforts when climatic changes threaten stocks, the group said, and fishing nations should cooperate in establishing and maintaining effective international management of straddling and migratory stocks. And nobody is going to argue with the ICFA about its insistence that governments take immediate steps to curtail discharges of chemicals into the water, and control coastal development that threatens fishery habitats.
COPYRIGHT 1993 E.W. Williams Publications, Inc.
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Publication:Quick Frozen Foods International
Date:Jan 1, 1993
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