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Shrimp turn around in Norway

NORWAY - After years of poor returns, declining business and factory closures, the Norwegian shrimp processing industry is seeing a resurgence. Figures from Fiskeriforskning for 2006 show that the industry is again generating profits.

With the exception of Royal Greenland, which closed three factories in Troms, all the Norwegian shrimp factories achieved profits in 2006.

The Norwegian shrimp processing industry is back in the money.

Total turnover was NOK 710 millions, with profits before tax of NOK 22 millions, or 3.1 percent.

These encouraging figures come after several difficult years with severe falls in the profitability of the Norwegian companies.

The reasons for the downturn were amongst other factors increased competition from the shrimp industry in Canada, Greenland and Iceland, and duties payable on part of the exported volume to the vital EU market.

Between 2001 and 2005 the industry lost more than NOK 160 millions, and 2006 is the first year in which profits have been made since 2000.

The positive figures have been achieved despite the fact that the factories have paid higher prices for their raw materials in 2006.

Several factors

Scientist Bjørn Inge Bendiksen is not able to say with certainty why the industry is now operating at a profit.

"There are probably a number of circumstances that explain this positive development. One possibility is that fewer production facilities has resulted in an improvement in capacity exploitation of those that remain. This results in an increase in production and profitability. Further, Norway has negotiated an increase in the duty-free shrimp quota to the EU, and this improves the margin on export products," he says.

EU is the most important market for peeled, frozen shrimps, the industry's largest product by volume.

The end of an industrial fairy-tale

After a number of years with the closure of factories in Northern Norway, a minor industrial fairy tale has come to an end.

The discovery of the enormous shrimp shoals in the Barents Sea in the mid 1970's resulted in almost explosive growth in the fleet of ocean-going shrimp trawlers. A number of factories were simultaneously established along the coast from East-Finnmark to Lofoten.

At the peak of the boom 25 factories provided employment for 1500 people. There are now just two left, employing a total of 100. There are three surviving factories in Southern-Norway: two in Rogaland and one in Telemark, employing a total of 50 people between them.