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Denis Sarana: prepare the refrigerator in winter!
Denis Sarana, Chairman of the Public Council for Economic Policy of the Primorsky Territory Administration, member of the Board of Directors of Vladivostok Sea Fishing Port OJSC, speaks with EastRussia correspondent
Vladivostok's free Vladivostok resident's certificate, numbered "1", was received back in March 2016 by Vladivostok Fish Terminal LLC. The project of this enterprise of Vladivostok Sea Fishing Port Group became a kind of "first pancake" (and not at all coma) in a pile of appetizingly smelling investment projects and applications on the table of new initiatives in the development of the Far East. The Chairman of the Public Council on the Economic Policy of the Primorsky Territory Administration, a member of the Board of Directors of Vladivostok Sea Fishing Port OJSC, told the EastRussia correspondent about how the business is progressing with this project, as well as the problems of infrastructure development in the fishing industry of the Far East, the investment potential of the logistics of bioresources. Denis Sarana.
- Denis Viktorovich, at what stage is the project for the construction of a new refrigeration complex in Vladivostok now?
- The idea of building a refrigeration and storage complex on the basis of the Vladivostok Sea Fishing Port was not new in itself, but it so happened that the final decision on the implementation of this project became possible thanks to the preferences that the law on the Free Port of Vladivostok provides us. According to the project, the new refrigeration and storage complex in the fishing port of Vladivostok will be able to provide the possibility of simultaneous storage of up to 40 thousand tons of products and, if necessary, significantly increase the amount of overloaded fish. We signed the first investment agreement at last year's WEF, in March we received a certificate of a resident of the Free Port, and a month later in Moscow we signed a loan agreement on financing the project by the Far East Development Fund.
- The Fund has listed its funding?
- The Fund is fully prepared to finance this project, in the amount of up to 1,2 billion. But to date, not a single ruble has been spent from public funds. The project of the refrigeration complex is at the final stages of development and this year it is planned to submit it for state expertise. Perhaps at the beginning of next year we will receive a construction permit, start dismantling the old cold storage in the port and erect a new building.
- What determines the market need for a new refrigerator?
- I cannot say that this market immediately requires such an infrastructure, rather, while experts are assessing and expecting demand for it in the future. In the meantime, few people want to pay more for the services of ports and refrigerators, rather they demand discounts even today. Therefore, of course, these are difficult investments. Formally, there are enough capacities and storage space in Primorye. The question is, in what condition are they, who modernized them?
In the 1980s-1990s, in three ports of Primorye (Zarubino, Nakhodka, Vladivostok), more than 58 million tons of fish products were handled on three refrigerators with a total capacity of 3 thousand tons. This high efficiency was due to the planned work, an excess of refrigerated railway trains, the lack of commercial storage in port refrigerators, and even the specialization of railway stations. Today, for comparison, we have more than 80 thousand tons of refrigeration capacities in ports, but in reality, only about 800 thousand tons of fish products are transshipped per year. By the way, in Primorye there have appeared operators with refrigerators of 1,000 tons, or without them at all, who transship up to 50,000 tons per year, mainly according to the direct ship-wagon option. Nevertheless, we have a regular overstocking of port refrigerators in the summer, and from year to year fishermen face this problem.
- And what do you see as the reason for overstocking?
- It is generally accepted that all the problems here are related to the railway, its throughput, timing and high cost of transportation, and so on. This is not entirely true. Competition to railways is already provided by road transport, and even the transportation of fish products by a roundabout route (both northern and through sea container lines).
Now, on the railroad alone, we have quite an impressive fleet of 1,600 wagons in sections, about 1,500 thermos wagons, about 6,000 insulated wagons and up to 4,000 refrigerated containers - the most modern type of this transport. Even without taking into account the aging insulated wagons from the old refrigerated sections, 260,000 tons of capacity remains. It should be borne in mind that insulated wagons can transport fish products only in winter, and thermos wagons in summer "reach" only approximately to Yekaterinburg. That is, in the summer, the supply for transportation is reduced and prices naturally rise. The change in the cost of delivery by one and a half times in summer and winter is primarily due to the seasonal use of the most efficient and cheapest resource - thermos cars. The railway tariff itself also differs for different types of transportation and exacerbates this difference. At the same time, transportation can no longer become cheaper - in winter, refrigerated sections are already operating at the limit of profitability, and containers are generally “in the red”. And only in the summer, after competitors leave the market, their owners start making money. So the reason why traders store fish on refrigerators in ports - including to wait and "leave" for 8 rubles, not 12, is one of the important factors, because 4 rubles can store a kilogram of fish products for 3-4 months.
- Why in the summer the cost does not rise above 12 rubles in the conditions of seemingly deficit?
- There is competition, from about this price, transportation by road, sea and mixed (for example, by rail to Yekaterinburg, and then by car) is profitable.
- And the Northern Sea Route?
- While it is exotic, there is no guarantee on the terms, expensive (more precisely, unpredictable for the price) ice wiring, distraction of transport in the hottest time, problems with the return load.
- Optimization of transportation by rail will not reduce the investment attractiveness of your project?
- There is a significant potential for increasing coastal processing of fish products. At the same time, the market rate for transhipment in the port is 1-1.5 p / kg of fish products. Today, the same is worth a month (!) Storage on the port refrigerator. Such tariffs barely cover the operator's current costs, and do not leave money for investments. At the same time, on average in a year, both handling capacities and refrigerators are still only slightly more than half occupied, and a potential investor is compelled not only to compete for the existing cargo traffic, but at the same time to return investments. The way out is either in the modernization and expansion of existing cooling capacities by operating ports, with a steady flow of goods, or the creation of relatively inexpensive logistics. For example, a modern assembly warehouse-refrigerator for 10,000 tons will cost about 100 million rubles. (without a land infrastructure), and it pays off (under normal) load for 3-5 years.
Plus - those benefits that are given to residents of the Free Port of Vladivostok, as well as quite feasible funding from the Development Fund of the Far East, really increase the investment attractiveness of the project.
- Your forecast, the consumption of Far Eastern fish in the country will grow?
- We have achieved the recommended level of consumption of fish products in the country, there is a market equilibrium, dynamic during the year. Russia consumes an average of 24,8 kg per capita per year, Moscow and Primorye - 30 kg / person, Chukotka - almost 60 kg, Kabardino-Balkaria, Dagestan, etc. regions - 5-7 kg. For comparison, Europe - 22 kg, USA - 11 kg. At the same time, all products per capita average per capita in the country are consumed more than 800 kg, sugar alone - 40 kg per person per year. That is, all fish in the diet occupies about 3% in terms of consumption, and the Far East - less than 1%. We consume palm oil in the country more than the Far Eastern fish. The demand for our fish and seafood depends significantly on the prices of substitute foods, poultry, meat etc., and this must be taken into account in the development of livestock and agriculture in general. The federal programs to support agriculture will allocate more than 200 billion rubles. annually (237 billion rubles in 2016 year), and this, let's say, unequal competition with fish products. Therefore, in order to implement plans to increase the consumption of Far Eastern fish in the domestic market, it is necessary to use a number of measures and factors, but we hope for the best.
- What other implementation risks do you see?
- Unequivocally a negative factor for making a decision on investing in port refrigerators, in these costly and long-paying projects, is the inability to fully access, own infrastructure in the form of berths in our ports. We have repeatedly called for, and we already meet understanding at the highest level, to privatize berthing facilities in our fish terminals, just as our fellow fishermen own their own ships, as well as shore bases and structures. The state should be a regulator, but not a participant in commercial and property relations, this is my well-founded and proven conviction.
- That is, the fact that the berths are in your lease, rather than property - is it a risk?
- Definitely. It is not even leased yet, still in limbo.
- There were proposals on the transfer of port facilities from the property of National Fish Resources JSC to the balance of Far Eastern Development Corporation JSC, the managing company of the Free Port. Would such an approach reduce the risks?
- Definitely, we understand much better how and for what the KRVV works. I think many problems would have been solved long ago.
- Is there a certain scenario, how it is possible at once, in a complex way, to solve the accumulated problems with the logistics of bioresources from the Far East?
- The fish logistics industry and its constituent parts are in a normal market situation today. They require modernization, but not at the expense of the budget, and do not require additional government intervention.
In case of the need for an accelerated modernization of the industry, the total investment costs are estimated at an annual volume of 3-5 billion rubles - here, and doubling the number of ref. containers, and the corresponding replenishment of the fleet of service wagons - up to 10 billion rubles. for 2-3 years. Construction of about 100,000 tons of refrigeration capacity in ports and in the rear - up to 3 billion rubles. - also for 3-4 years. Modernization of the refrigerated fleet is impossible to do in a short time, we can assume a maximum of 5 billion rubles. on 3-4 new ships per year, but this is already the task of large fishing companies with their resources. For today in the branch of fish logistics, we do not see a consolidated financial result, such money, which allows enterprises to independently make such investments. Therefore, in the end, all of them will be included in the cost of delivery and in the cost of the fish products themselves.
- What measures of state support could give a result?
- Theoretically, the option of support (tax, interest rates, etc.) from the calculation of 1-3 ruble per kg of fish products using modern means of delivery and storage to the Russian market (ship, refrigerator, container) can be considered theoretically. The total amount of such measures could be up to 1-3 billion rubles a year, which is insignificant on the scale of agricultural support, for example, but would initiate an early update of the industry infrastructure.