Following a long period of stagnation, the Icelandic fishing fleet is now finally in the process of being renewed on a large scale, reports Gudjón Einarsson.
No less than 12 new large pelagic and bottom fish trawlers have been ordered for the total sum of 194 million, most of them built in Turkey.
The first of these vessels, Sigurdur VE-15, a state-of-the-art trawler/purse seiner, arrived for the first time at its home port of the Westmann Islands in late July. The owner is the fishing company Ísfélag Vestmannaeyja and the price for the ship was around 23 million.
The ship, which was built in Celiktrans shipyard in Turkey, is 80m long and 17m broad, powered by a 4.500 kW Wärtsilä main engine. In its 12 RSW tanks there is room for 3,000 tons of fish. The new ship is very well equipped for pelagic fishing such as capelin, herring, mackerel and blue whiting and will target all these species. The catch will be processed in Ísfélag Vestmanneyja’s land-based factories.
Five vessels for HB Grandi
HB Grandi, the largest quota holder in Iceland, has ordered five new ships, all to be built in the same Turkish shipyard as Sigurdur VE. Two of these are trawlers/purse seiners of the same design as Sigurdur VE and they will be delivered next year. The other three are fresh fish trawlers (55m long and 13.5m broad) to be delivered in 2016 and 2017. The price for both of the pelagic trawlers are 44 million and the three fresh fish vessels cost 44.5 million. HB Grandi’s total investment in these five ships is 88.5 million.
Samherji and others
This summer Samherji and its affiliated company Útgerdarfélag Akureyringa, along with the company FISK Seafood, awarded a contract to Cemre Shipyard í Istanbul in Turkey for the building of four fresh fish trawlers (61.6m long and 13.5m broad), designed by the Icelandic firm Skipataekni. The price tag is 65 million for all four.
Finally two more fishing companies, Vinnslustodin and HG, have jointly awarded a contract to Hunang shipyard in China for the building of two fresh fish trawlers (50.7m long and 13m broad) for the sum of roughly 10 million each. The ships are designed by the Icelandic firm Skipasýn.
Why now?
So why the sudden renewal of the fleet at this stage? The vessel owners point out that under normal circumstances this would have happened a long time ago, but the uncertainty caused by the lack of a long term fishery management policy on behalf of the government has stalled all progress. The implementation of a heavy resource tax by the former government threatened the future of the industry, they said. The present government has eased this threat a bit and even though the fishing companies are not content with the situation, they could not wait any longer for the fleet to be renewed.
The fishing sector is still angry and frustrated, asserting that the resource tax is the equivalent of a 48% income tax on fishing companies while other industries in the country pay a 20% income tax. It is estimated that the tax will render about 51 million to the state coffers during the present fishing year. Vessel owners have to pay a license fee for every kilo of quota allotted to them and that applies to all species. For a kilo of cod quota, for example, the tax is 0.08, for haddock 0.10, for herring 0.06 and for a kilo of mackerel quota the fee is 0.05.
The spokesmen of the fishing sector maintain strongly that the tax in its present form will gradually force many smaller operators out of business and leave the quota in the hands of fewer and fewer large companies.
Freezer trawlers give way
Another major shift is now taking place in the Icelandic fishing industry. The production of bottom fish fillets frozen at sea onboard factory trawlers has given way to on-land processing, because the vessel owners consider it more profitable to process more of their fish quota in their land-based factories. At least three freezer trawlers have been sold recently and others converted to fresh fish trawlers.
So why is it not so profitable anymore to operate a freezer trawler, which used to be the most lucrative business in this field? The companies point out a few reasons. Firstly, the price of frozen fillets at sea has dropped considerably during the past two years or so. At the same time, the market demand for fresh fish fillets and bits has increased and these are the products that usually get the best price. Secondly, the cost of operating a freezer trawler is relatively high. The crew gets a percentage of the export value of the fish processed onboard, meaning that the labour cost is much higher than at land-based facilities. And the third reason mentioned is that the resource tax recently imposed by the government hits the freezer trawlers harder than other fishing vessels.
The beginning
The first modern freezer trawler was introduced in Iceland in the early 1980s. The number of these ships quickly increased as fillets frozen at sea gained a considerably better price than fillets produced on land. The fish and chips shops in the UK were especially eager customers. The freezer trawler boom’ reached its peak in 1993 when 35 bottom fish filleting freezer trawlers were in operation. In recent years their numbers have been gradually decreasing so now there are less than 20 left in the Icelandic fishing fleet.
In spite of this development, freezer trawlers are still very useful and profitable, especially for catching and processing redfish and Greenland halibut, which are not filleted onboard. Therefore a considerable number of these ships will continue to be in operation in the coming years.
Around 5,000 men are now employed on Icelandic fishing vessels, almost all native Icelanders. Workers in fish plants are roughly 4,000, of which 35-40% are foreigners, many of whom have been working in Iceland for many years. Now that the emphasis is more on fillet production on land than at sea the number of fishermen will inevitably drop while the number of workers in fish plants will rise.
Plenty of big fish
There has been a remarkable turnabout in the development of the Icelandic cod stock in recent years. The proportion of larger fish in the catch has increased dramatically and the abundance of cod on the fishing grounds is almost unbearable for those with limited fishing quotas. The scientists maintain that this is exactly how it should be, but the majority of fishermen do not understand why they are not allowed to fish more.
About 10 years ago the cod stock was in a very poor condition. A drastic plan to rebuild the stock by cutting down the catch from around 200,000 tons to 140,000 tons and then gradually increasing the TAC again has proved to be highly successful. The stock (four year old cod and older) increased from 600-700 thousand tons in 2005 to almost 1.2 million tons in 2013. According to the scientists this increase can mainly be attributed to the fact that the harvest rate has declined from 35-40% of the stock to around 20%. The recruitment during this period has been pretty much average. The TAC now is 218,000 tons and the scientists predict that it will continue to increase.
The relatively low harvest rate has led to a transformation of the cod stock. Now individual year classes last longer so there is a greater abundance of older cod in the sea. Many fishermen are surprised by how large the fish they catch have become. For example, a boat from a fishing village in Northern Iceland landed 12 tons caught by Danish seine last winter and the average size of the fish was 20 kilos. The largest one weighed 41 kilos. This is by no means an exception. Admittedly this boat was on a spawning ground, but on average the cod in the catch are getting larger. It can be mentioned in this respect that around the year 1990 about 50% of the cod caught in Icelandic waters were 3-5 years old. Now it is 25%. Cod eight years and older now represents almost 30% of the catch, but was 10-15% some decades ago.
The authorities have stood firmly by the present management plan, no matter which political parties are in power and in spite of the constant pressure from the fishermen for a higher TAC, so it is probably here to stay without any great alterations.
Cod is by far the most important fish species in Iceland, rendering 543 million in export value last year, or almost a third of the total value of seafood from Iceland. So there is a lot at stake.
The newcomer
Mackerel, the new kid on the block’ in Icelandic fisheries, is also a very important pillar economically, generating 130 million in export value last year, ranking fourth on the list of the top seafood export species, trailing behind cod, capelin and herring but preceding redfish, haddock and saithe.
The mackerel stock started migrating to Iceland by force in 2007 to feed and there is no indication that it is retreating. This year’s quota in Icelandic waters is 154,000 tons and, in addition, several Icelandic vessels are taking part in trial fishing in Greenlands economic zone.
Luckily the fishery in Icelandic waters consists of many fish species so a decline of one stock is often compensated by the rise of another. For example, the mackerel, a warm water species, arrived at a time when the capelin, a cold water species, was retreating due to warmer sea temperature. The capelin stock, which sustained a yearly catch of over a million tons before, now only’ allows a TAC of a few hundred tons at best. So the mackerel could not have come at a better time – for Iceland, that is!
A new fishing year began in Iceland on the first of September. The Minister of Fisheries followed to the letter the scientific advice given by the Icelandic Marine Research Institute for all species.
Mercator Media Ltd 2014