Arctic Fish received final approval from Chinese regulatory and customs officials to send its first batch of salmon to China earlier this week. The company has been navigating the challenging approval process for the past five years, explains Arctic Fish’s Founder and current Head of Business Development, Sigurður Pétursson.
“This has been a long time in preparation and I first went as a delegate of the Icelandic Ministry of Foreign Affairs on behalf of the Aquaculture Association in June 2014 for the signing of the free trade agreement between Iceland and China,” explains Pétursson to High North News.
Iceland goes to China
Aquaculture products have not previously been traded between the two countries, requiring a number of certifications and registrations in order to begin exporting farmed salmon. Over the past five years it required several visits and inspections to secure the necessary permits. Pétursson highlights that it took the combined efforts of Icelandic Ministries, Iceland’s Food and Veterinary Authority (MAST) and the country’s embassy in China to receive formal registration of Arctic Fish’s products. The first shipment will be done via air transport and Pétursson left open the possibility of utilizing the Northern Sea Route for future deliveries.
The company did not disclose how many tons of fish it aims to export to China annually. “We don’t know yet as we are only sending our first shipment this week,” Pétursson explained.
Joint-venture with Norway Royal Salmon
Arctic Fish will rely on Norway Royal Salmon (NRS), a Norwegian salmon farmer generating annual sales of 5 billion NOK, for the sale of its product in China. In fact, NRS acquired a 50 percent stake in the company in 2016 valued at 29 million Euro, making Arctic Fish a defacto Icelandic-Norwegian joint venture.
The company expects other Icelandic salmon farmers to also begin shipments to China as early as this week. The country is the largest consumer of fish in the world and represents a major opportunity, Pétursson said.
The expansion into China follows serious setbacks in October 2018 when Arctic Fish and one of its competitors, Arnarlax, lost their licenses to farm salmon in the Patreksfjordur and Talknafjordur area worth more than 17,500 tons of fish. Following new aquaculture legislation both companies had their licenses revoked but were able to operate under temporary exemptions this summer following significant protests from the affected communities and companies. Just last week Arctic Fish successfully renewed both licenses for ten years.
Norway exporting Salmon to China
Exporting salmon to China has been part of political disputes for much of the past decade. Following the awarding of the Nobel Prize to Chinese human rights activist Liu Xiaobo in 2010, Chinese-Norwegian relations deteriorated and salmon exports to the country plummeted. Following the normalization of relations beginning in 2017 salmon exports are now steadily increasing again with more than 20,000 tons making their way to China from Norway during the first seven months of 2019.
China is expected to become the world’s largest consumer of salmon within the next decade, overtaking Japan. Meanwhile, salmon is Norway’s second-largest export after oil and gas creating the potential for large-scale exports to China. By 2025 China is forecasted to consume 240,000 tons of the fish, up from around 100,000 tons this year.
Norway hopes to deliver 65 percent of the country’s future salmon needs, up from 30 percent in 2018. Russia’s Northern Sea Route may play a vital role in the future in delivering product to China. A delivery of frozen fish from Vladivostok to St. Petersburg was carried along the route by Danish shipping company Maersk just last year.