1. The Russian Far East Salmon Industry Initial Observations and Strategies for the Wild Salmon Center

2. World Wild Salmon Production U.S. Leading Producer

3. Russian Wild Salmon Production Pink Salmon is Predominant Species Source: FAO FIGIS Metric Tons

4. Global Salmon Markets

5. Relative Salmon Values Average Alaska ex-vessel value per lb

6. Initial Observations: Production Russian salmon production seems relatively stable if data is correct but poaching is a problem and likely results in production being under-reported Fish traps seem highly efficient and quality of the salmon is good By-catch from traps is minimal and traps can be removed or disabled as necessary At sea salmon fishing less than 10% of total production and declining Run forecasts often highly inaccurate as government survey resources are limited

7. Russian Salmon Trap Net “fence” anchored from the beach Entrance Trap Holding Pen

8. Sakhalin Salmon Trap

9. Emptying the Trap

14. Initial Observations: Processing Considerable investment in new plants and equipment Many plants also own salmon traps At plants visited processing is basic, i.e. whole gutted, roe and/or canning Plants generally modern and clean No plants visited that have U.S. HACCP certification

15. Salmon Processing

16. Salmon Roe Processing

18. German Plate Freezers

19. Processing Salmon at Sea

20. At Sea Salmon Processing Salmon line on processing ship 20 kg bag for frozen whole salmon

21. Initial Observations: Markets Smaller processors selling to middlemen (traders) in Vladivostok and have minimal knowledge of end markets Current markets are primarily Japan (sockeye) and domestic (canned, roe and frozen whole) Japan imports almost 100% of Russian sockeye Some shipments to China for re-processing and sale of value-added products in U.S. Domestic seafood market is growing by 15-20% per year Russian consumers wanting more value-added but industry lacks sufficient capacity

22. Initial Observations: Markets Moscow sees salmon resource as important to domestic food supply and tightening regulatory process to control quota and fight poaching Pink and chum salmon least valuable species in world markets and often used for value added products Strong interest in market expansion Europe and U.S.) and value-added Little awareness of ecolabels and MSC

23. Domestic Roe Market $18.00

24. Fresh Whole Salmon in Local Market Chum $3.60 per kg King $7.20 per kg Coho $5.40 per kg

25. Some Key Issues Affecting Russian Salmon Industry Limited government resources for monitoring salmon runs and forecasting Extent of poaching and under-reporting is not known and likely varies greatly from river to river Anti-poaching forces are limited and underpaid –Quota holders often subsidize Lack of end market information Length of quota period being debated in Moscow

26. Potential Market Incentives MSC certification of “model” rivers –Pre-assessment to address needs Collaboration with major buyers in key markets to feature sustainable RFE salmon –Preferential purchasing agreements –Support for regulatory reform Training programs with U.S. experts – Develop better monitoring and forecasting – Market information/education for processors

27. Potential Market Collaborators Metro (German retailer with markets in Russia) now sells Russian canned salmon Trident Seafoods – Major U.S. processor now buying Russian salmon for value-added plant in China Cerena Holding AG – Swiss group planning Kamchatka investment of up to $400 million for fishing fleet modernization, processing facilities and international marketing network. “Fresh salmon for Europe.” Japanese markets for MSC certified Russian sockeye (e.g. Aeon)