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All Processing Going Overseas?

NORWAY - Norway imports increasingly more of the seafood it consume and new figures from Nofima show that less people are employed in the fish processing industry here in the country.

In 2007, total Norwegian seafood consumption was 104,000 tonnes. Norway imported 38,000 tonnes of processed seafood products, an increase of 46 percent on 1996 figures.

Higher Labour Costs

Photo: Frank Gregersen

Fish processing plants no longer need to be located near the fishing grounds or fish farms. Cheap labour or the protection of tariff walls can be a decisive factor for where processing takes place.

Norway has long had higher labour costs than our competitors, and in recent years labour costs here have risen sharply compared to other European countries.

In comparison to new EU member countries and countries outside the EU, labour costs in Norway are exceptionally high.

Fewer Jobs

From 1993 to 2006, production of stockfish, saltfish and clipfish showed the greatest profitability. At the same time, production of filleted white fish suffered significant losses.

A clear consequence of this development is that the fishery industry employs far fewer today than it did a few years ago. In 2000, around 14,000 were employed in the fishery industry compared to around 10,000 in 2006. Job reductions have been strongest in the production of white fish, particularly in Finnmark where the fillet industry was strongest.

The European Union wants to stimulate and protect its own fishery industry. Above all, this affects salmon, particularly smoked salmon. This explains the lower proportion of processed salmon in the export statistics.

Exchange Rate

A strong Norwegian krone (NOK) also contributed to worsen the competitive situation for the Norwegian processing industry at the start of the decade. Companies with marginal profitability experienced even more problems. A continuing strong NOK reduces the competitive strength of the Norwegian fish processing industry.

Demanding Customers

Another challenge is that there are now fewer but larger players in the grocery trade both here in Norway (Coop, Rema, Rimi etc.) and abroad. As a consequence, Norwegian seafood suppliers meet customers in the export market demanding more competitive process, a greater product range and better security of supply.

The increased import of seafood products to Norway indicates the overseas seafood suppliers are better equipped to handle these demands even on our domestic market.

This project was commissioned by the Norwegian Seafood Association and the Fishery and Aquaculture Industry Research Fund.