Faroese mackerel processor: factory running at near full capacity

October 17, 2012, 8:14 am

The Faroe Islands’ newly built pelagic factory for human consumption has been running at near full capacity since it opened at the end of July, said Vardin, the Faroe Islands’ largest pelagic fishing group.

“The new factory has been really good,” Torhedin Jensen, administration manager at Vardin, told Undercurrent News. “It’s been producing since the end of July, at up to full capacity – almost 600 metric tons a day [on days of landings].”

Vardin is the majority owner of the new factory, completed in July to compete with Faroe Pelagic (formerly Kollafjord Pelagic), the only other pelagic factory for human consumption in the Faroe Islands.

Before its construction Faroese fishing vessels wishing to target the more lucrative markets of human consumption had to either land at Faroe Pelagic – which is partly owned by the Dutch company Parlevliet & Van der Plas – or rely on foreign transhipment vessels.

Now in addition to Vardin's factory a new export tax imposed earlier this year on fish offloaded to foreign motherships has probably further encouraged Faroese fishermen to land their catch at home.

"We've been using a lot of our herring quota to catch the mackerel"

"Now for the first time we in the Faroes are able to process more or less all of the pelagic fish on our own," Jensen said.

Even though the Faroese quota of 150,000t has not been exhausted yet – official figures said catches totalled 99,000t by Oct. 8, while Jensen estimates catches could be at 115-120,000t by now – Jensen thinks there is definitely room for both plants.

“One factory can certainly not be enough. Also it was certainly not good enough for the fishermen… Now with two buyers, you’re more certain that you’ll get a fair price. The market mechanics don’t work with only one factory.”

Herring woes

Jensen was not able to give any estimate of how much the factory had processed since it opened. However, he said, while fishing is still going on, the catch in recent weeks has been hampered by high levels of herring.

Faroese regulation's small tolerance towards by-catch means the fishermen have had to stop fishing during the height of the mackerel season as a result of the high herring levels, and have therefore not been able to fish their mackerel quota. It has also meant they have had to use their herring quota already now, even though the season for good quality herring only starts around November.

“There's a lot of herring in the Faroese zone. We've been using a lot of our herring quota to catch the mackerel, which is not good as [it means] we have to sell the herring at the wrong quality and price," Jensen said. "We’ve gotten a few krone [Danish currency] less in price on the herring because of this.”

"Now for the first time we in the Faroes are able to process more or less all of the pelagic fish on our own"

The large quotas set by Iceland and the Faroese had sparked fears among European and Norwegian producers that the countries would compete for the Eastern European and Russian markets.

However, although Vardin has a certificate to sell to Russia, most of its catch this year has gone to Nigeria. Part of the reason is that Iceland has been very active on the Russian market, Jensen said. A few days ago a Russian buyer told Undercurrent that prices were down by around 35% from last year due to high supply.

Ominous clouds

Meanwhile, ominous clouds hang over the Faroese industry. Around mid-November, the European Union could seal a new law that could allow it to ban imports of mackerel and whitefish from the Faroe Islands. Talk is that the ban could also affect transfers of fish through the EU.

“I hope it won’t happen," Jensen said. "I can only say that if they’re going to stop transfers, that is very, very extreme. Everyone should be allowed the right to transfer."

In the case of a ban Vardin would possibly be one of the worst hit in the Faroe Islands – in addition to its pelagic operations it is the majority shareholder in the country’s largest whitefish supplier in Faroe Origin, which relies entirely on the EU for its sales.

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