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Fresh fillets are profitable

NORWAY - According to Fiskeriforskning's Profitability Survey for 2005, fillet companies that have focused on fresh fillets have far better financial results than fillet companies that primarily product frozen fish.

The fillet companies that manufacture fillets of whitefish, where the most important species are cod, saithe and haddock, had an operating result of 0.2 % in 2005 and sales of almost 1.6 billion kroner.

For the fillet industry, 2005 was the first year with a positive operating result since 1998.

Fresh strategy best

"The better results in the fillet industry are partly because a number of companies in recent years have reorganised their production from frozen to fresh fillet products. This has been important for the improvement in profitability", says Scientist Bjørn Inge Bendiksen.

He is responsible for Fiskeriforskning's annual Profitability Survey of the Norwegian fishing industry.

The fillet industry is doing so well also because some companies that had huge deficits in 2003 and 2004 have now shut down their fillet production.

Lacking raw materials

Bendiksen has analysed the economic development of the fillet companies based on which strategies they choose concerning product types.

"The figures for the six years clearly show that the companies that are focusing on fresh fillets are doing best. The companies that have most frozen products have weaker earnings, with the exception of a couple of companies", he says. "Even though the positive development can't only be explained by the focus on fresh fish, this is an important reason".

"According to the industry itself, the demand for fresh fillets is greater than it can supply. The problem is that the industry doesn't get enough raw materials. Also, the quality of some of the fresh fish from the fleet isn't good enough to be suitable for production of fresh fillets", says Bendiksen.

Fiskeriforskning's annual Profitability Survey comprises the entire Norwegian fishing industry, but for 2005, so far only the figures from the fillet industry are available.

Key figures

The survey of the fillet industry is based on accounting figures from 11 companies with 784 man-labour years and total sales of 1,579 million kroner.

Other key figures for the fillet industry that manufactured whitefish in 2005 (2004 in parentheses):

  • Operating result: 3 million kroner (- 20 million)
  • Operating result in percent: 0.2 % (- 1.2 %)
  • Ordinary result before taxes: - 4 million kroner (- 35 million)
  • Ordinary result in percent: - 0.3 % (- 2.1 %)
  • Return on total capital: 2.6 % (- 1.1 %)
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