It's expected that 60,000 metric tonnes of headed and gutted pollock will be processed in Viet Nam in 2018, up from 10,000 tonnes in 2015. — Illustrative image/ Photo Karen Ducey/ karenducey.com

HA NOI (Biz Hub) — The drift from China to Viet Nam as a whitefish processing hub will increase in pace over the next few years, said Andrey Teterkin, CEO of the Russian Fishery Company (RFC), the largest pollock quota holder in Russia.

Teterkin told Undercurrent News he predicted that 60,000 tonnes of headed and gutted (H&G) pollock would be processed in Viet Nam in 2018, up from 10,000 tonnes in 2015.

He also expected more processing plants for pollock to be built in Russia, driven by lower labor costs, available raw materials and the chance of government support.

"There is resumed discussion on domestic H&G processing," he said.

A plan being looked at by the Russian government would give 5 per cent of the total allowable catch to those willing to build processing plants, with 15 per cent for new vessels built in Russian yards.

"The initiated amendments to Russian law are going to be heard in parliament soon," said Teterkin.

He hopes that by 2018 there will also be a processing hub in the Russian Far East, as well as more volumes going to Viet Nam rather than China.

As Russian fishing companies look to diversify away from processing in China, they are also doing more fillets and whole round, and less H&G, he said.

Both the shift to Viet Nam and the move to more fillets are driven by weaknesses in China's H&G processing sector, said Teterkin.

Espersen's shift to Viet Nam

Teterkin's views are similar to the sentiments of Klaus Nielsen, CEO of A. Espersen, the Danish whitefish processing group.

Espersen has stopped processing in China and has moved its Asian cod production to Viet Nam.

"I see some of my colleagues, the big US and UK brands, looking for capacity," Nielsen told Undercurrent in an interview in February, adding the plan is to produce around 10,000 tonnes of cod for which demand is increasing again, in 2016 in Viet Nam.

The branded players are looking for partners in processing, not to set up their own plants, Nielsen said. "There are quite a few who are a bit worried about China and are looking to Viet Nam."

Viet Nam has signed a free trade agreement with the EU, has close relations with Russia and has joined the Trans-Pacific Partnership. These relations will bring major benefits for Viet Nam. For the Russian market, Vietnamese enterprises have also benefited thanks to the free trade agreement signed between the countries of Southeast Asia and Economic Union Eurasian (EEU). — VNS