Eastern Europe and the Baltic States are changing -- and a raft of investments by seafood industry heavyweights in the past couple of years is testimony to the revival of European processing.
In the past year alone, three whitefish industry big guns announced plans to ramp up their processing in the country: McDonald's Europe supplier Espersen revealed in September it will pull out of China, and is currently upgrading its processing plant in Lithuania to pick up the volumes.
"We have for quite some time known – and publicly expressed – that production in China for the European market would lose its competitive moment within some years," Klaus Nielsen, CEO at Espersen, said at the time.
German frozen food processor Frosta revealed at the beginning of the year it will be investing in its fish processing facility in Bydgoszcz, Poland.
And more recently, Lucky Union Foods told IntraFish it is adding a new production line to its factory in Poland, increasing capacity at the plant from currently 10,000 to 18,000 metric tons.
But that's not all: In early 2015, a new fish processing plant operating under the name Vesvela Group -- backed by Russian investors -- started processing cod, haddock and saithe from Klaipeda, Lithuania.
So what are the reasons for this growth momentum?
In short: Higher labor cost, oil prices, higher interest rates, currency fluctuations and technological changes are all favoring the region. China's processing sector is moving away from cheap and is simply becoming less attractive to European processors.
In the short term, Poland and the Baltic States will be the top destinations for whitefish processors, Thomas Farstad, CEO of whitefish supplier Norway Seafoods, recently told IntraFish sister publication Fiskeribladet Fiskaren.
Areas such as Lithuania's Klaipeda Free Trade Zone, where Espersen's Lithuanian operations are located, lure foreign processors with low labor cost, tax incentives and their proximity to major European markets.
Industry watchers also believe the growth in Europe's seafood market will come from Eastern Europe, backed by the rise of big retailers and no-frill supermarkets -- so closeness to these markets is definitely a plus.
Does all this sound too good to be true? Well, there is a risk -- but isn't there always?
Joining the European Union in 2004 has certainly done a lot for the development of these countries, but is also means that they are now entangled in Europe's difficult political and economical environment.
But let's be honest: Which country in the world can actually claim it's complete economic and political stability at this point in time? Yep, not many.
So do keep a close eye on Eastern Europe and the Baltic States because one thing is for sure -- those countries and their seafood processors are going to grow in importance in the international seafood industry.
--
IntraFish's Eastern Europe Seafood Industry report examines the trends influencing both the markets and production of one of the world's most interesting industrial regions. It also looks at the species coming out of key countries and at the biggest companies operating in the region. For more info click here.
---
For more seafood news and updates, follow us on Facebook and Twitter or sign up for our daily newsletter
