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Composition of the Croatian seafood sector
Croatian fishing companies earned EUR 61 million from landings in 2015. Processing companies in Croatia generated a further EUR 97 million in 2016. Compared to other countries in this study, there is a slightly lower degree of value adding in the Croatian seafood value chain. This is likely because there is less fish processing in the Croatian seafood value chain, as fishermen target mainly demersal species that are generally sold fresh and not subject to industrial scale processing.
Croatia maintained a slight trade surplus of EUR 54 million in fish trade in 2016. It exported produce with a value of EUR 177 million, while imports had a value of EUR 123 million. Croatia’s main export destinations are Italy (33%), followed by Japan (14%) and Slovenia (13%). 66% of the country’s fish and fish product exports were to other countries in the EU. The country mainly imported fish from Spain (23%), Italy (17%) and Slovenia (7%). 80% of Croatia’s fish and fish product imports were from EU Member States.
There were 7,489 registered commercial fishing vessels in Croatia in 2015. These belonged to 6,180 enterprises, with 12.7% of the enterprises operating more than one vessel. Out of 5,280 active vessels, 4,292 vessels are small-scale and 988 large-scale vessels (STECF, 2018).
Fishing companies employed approximately 2,384 FTE, 0.15% of the workforce. In contrast to countries such as Belgium (Chapter 3) and Sweden (Chapter 24), the Croatian fish processing segment employed fewer workers (1,149 FTE) than the fish catching segment.
The European Commission list of recognised producer organisations in the fishery and aquaculture sector mentions three POs in Croatia. However, according to the cooperative Friška Riba these producer organisations function as cooperatives. Friška Riba is a cooperative of over 30 fishing companies. The cooperative is for example involved in the procurement of equipment and tools. In this way fishermen receive the benefits of economies of scale (Zanki Duvnjak, 2018).
Friška Riba is building a fish processing facility for its members. It will operate in the freezing and packing of fish (all landed in Croatia), prawns and mussels for domestic and EU markets – especially Italy, Spain and Slovenia (Zanki Duvnjak, 2018). Another cooperative is Ribarska Zadruga Zadar. It has 15 members with a total of 22 vessels.
Among the member companies is Conex Trade, one of the bigger companies in the Croatian fishing industry (see section 5.3.1).
The selection of companies included in the analysis is based on a screening of the largest companies active in the fish catching segment in Croatia ranked by total assets.
Conex Trade was established in 1989 and is one of the leaders in fisheries and fish processing in Croatia. The company has its own production plant for the processing of tiny blue fish since 2009 and a pilchard canning factory since 2012.
The company owns a fleet of three fishing vessels, and it also cooperates with 25 other fishing vessels in order to assure continuous supply of fresh raw material. The company harvests 8,000 to 10,000 tonnes of fish annually. Its products are mainly sold to the EU market (Conex Trade, n.d.).
As Figure 14 shows, Conex Trade is owned by Croatian businessman and director Mladen Milakovic, and Spanish fish processing company Conservas del Noroeste. Conservas del Noroeste in turn is owned by four Spanish companies and five Spanish businessmen (Orbis, 2018aq). Conservas del Noroeste markets the Cabo de Peñas brand of seafood products (Conservas del Noroeste, n.d.).
In 2016, Conex Trade generated revenues of EUR 9.6 million. A year earlier it had generated EUR 9.8 million. In 2016, Conex trade held total assets worth EUR 11.9 million, a year earlier this was EUR 13.3 million (Orbis, 2018ar).
Conex Trade is integrated both vertically and horizontally. It has a fleet of three vessels in Croatia, indicating domestic structural horizontal integration. Through its cooperation with other fishing vessels in Croatia it is also engaged in informal horizontal integration. Conex Trade has a processing facility, indicating vertical integration. Moreover, it is also partly owned by Conservas del Noroeste, a Spanish processing company. This indicates further vertical integration, as a proportion of Conex Trade’s catch is likely also processed by its parent company and marketed under the Cabo de Peñas brand.
Mirna dd Rovinj is a Croatian fish catching and processing company established in 1877. Today, the company operates a factory that employs 150 workers (Orbis, 2018ar). Mirna targets mostly blue fish from the Adriatic Sea, harvesting approximately 3,500 tonnes per year (Orbis, 2018ar). Mirna’s product portfolio is based on canned products of sardines, mackerel, tuna, fish pate, fish salad and fish spreads (Mirna, n.d.).
As Figure 15 shows, Mirna is a subsidiary of Podravka – a large consumer branded food products company. Podravka’s products include among others, soups, condiments, snacks, children’s foods, beverages, salads and cream spreads (Podravka, 2018b). Its fish products – canned tuna, herring, mackerel, and sardines – are marketed under the Eva brand (Podravka, 2018b).
Podravka is a stock listed company traded on the Zagreb stock exchange. Its shareholders include institutional investors, such as pension funds, asset managers, and insurance companies (Thomson EIKON, 2018). In 2016, Podravka generated EUR 461 million in revenues, the year before it generated EUR 542 million. In 2016, Podravka held total assets worth EUR 698 million, down from EUR 650 million in 2015 (Podravka, 2017).
The above analysis shows that fish catching, and processing company Mirna is part of a large structurally vertically integrated group.
Croatian marine fishing company Peter Pan was established in 1989 (Orbis, 2018as). Peter Pan is a family enterprise (Figure 16 with three vessels: Peter Pan, Sjajni and Tarej (Orbis, 2018at). In 2016, the company generated EUR 2.3 million in revenues, down from EUR 2.7 the year before. In 2016, the company owned total assets worth EUR 2.9, down from EUR 3.1 million a year earlier (Orbis, 2018as).
The above description shows that Peter Pan has engaged in horizontal integration through the expansion of its fleet. However, there a no indications that it has engaged in structural vertical integration.
From the above it appears that there is limited vertical and horizontal integration in the
Croatian seafood supply chain (Zanki Duvnjak, 2018). Fishermen cooperatives have
developed their own processing facilities, allowing members access to processed fish
markets. This indicates a degree of vertical integration, though not driven by individual