A comprehensive restructuring by Iceland's fishing industry a few years ago is now starting to pay substantial dividends, a recent report on the nation's seafood sector has concluded.
The Reykjavik-based bank Islandsbanki, which specialises in seafood matters, has highlighted the huge influence the industry has on the national economy and how it is certain to contribute to economic growth in the years ahead.
Fishing was one of the few activities in Iceland left relatively unscathed by the banking collapse in 2008 although there were overhang debt issues with some of the companies. In 2011 fish related exports totalled 252-billion Icelandic kroners (ISK) - or US $1.964 (Ł1.22 bn and euro 1.47 bn) - or some 38 per cent of the country's total value in exported goods.
Europe was the most important market, taking 72 per cent of fish shipped from Iceland with Britain the largest country within the EU taking an 18 per cent share, followed by Spain at nine per cent. Surprisingly Norway, which would seem to have enough fish of its own, shares third place with France at seven per cent. Cod remains the most valuable species accounting for 31 per cent of all seafood exports.
But it is easy to see why Iceland is fiercely resisting EU arm twisting over mackerel because mackerel is now the most valuable pelagic species in export terms with its value increasing by 158 per cent in the past few years.
The report states: "The EBITDA margin of the companies has been quite high during the past three years, and the EBITDA margin of fisheries has reached ISK 36bn. This achievement has been attained despite a reduction in fishing quotas, high oil prices and increased levies on the industry. It is therefore quite clear that the extensive and comprehensive restructuring activities that the seafood industry companies have undertaken in recent years are beginning to show results in improved operations.
"Today, approximately 9,000 people are employed directly in the seafood industry in Iceland – 5,200 in fishing and 3,800 in fish processing. Over the past four years, however, the number of jobs in the industry has been on the rise Altogether, jobs in the fisheries industry are approximately 5.3 per cent of the total workforce in Iceland. Approximately 80 per cent of jobs in the fishing industry are outside the greater Reykjavík area."
The report says there has been a strong trend towards consolidation over the past 20 years after quotas became transferable between companies with economics the driving force. Islandsbanki says its is important for the country to ensure the industry remains competitive. It touches on Government plans to reform the fishing management system which will mean increased fishing fees for companies and says: "Islandsbanki has grave doubts about the changes that are envisaged by the proposal."
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