Lithuania

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Key findings - Lithuania

Composition of the Lithuanian seafood sector

In 2015, Lithuanian fishing companies generated EUR 58 million in landings income. Fish processing companies generated EUR 464 million in production revenues in 2016.

Lithuania had a trade surplus of EUR 46 million in fish products in 2016. The country exported EUR 531 million in fish products and imported products with a value of EUR 485 million. 71% of Lithuania’s fish imports originated from the EU. Its main import partners were Sweden (44%), Germany (10%), and Norway (10%).

96% of Lithuania’s fish exports in 2016 were destined to other EU countries. The main export destinations for Lithuanian fish products were Germany (36%), Italy (13%) and Belgium (12%).

There were 154 registered commercial fishing companies in Lithuania in 2016. These were owned by 69 enterprises. 29 enterprises (42%) owned more than one vessel. The average gross tonnage per vessel was 355 GT or 777 GT per enterprise. This high average is due to several larger pelagic freezer trawlers registered in Lithuania.

The fishing segment in Lithuania employed 463 FTE in 2015. The fish processing segment employs a far larger workforce, 5,240 employees.

Table 53: Lithuanian seafood sector key figures

Table 53: Lithuanian seafood sector key figures

A number of brands are marketed in Lithuania. The Abba brand of Norwegian company Orkla is relatively new to the Lithuanian market. It markets various seafood products (Orkla Lithuania, n.d.). Viciunai Group, which markets the Viči, Esva, Columbus brands in Lithuania and Europe, is also an important brand owner. It is mainly engaged in surimi production (Viciunai Group, n.d.). Finally, South African Bidvest markets the leading Lithuanian frozen fish brand Nowaco (Nowaco, n.d.).

Producer organisations

There are three recognized producer organizations in Lithuania. All represent a diverse group of fishermen and fishing companies. The largest is Žuvininkystės įmonių asociacija Lampetra (see Table 54). Due to lack of data availability, the number of vessels is not provided.

Table 54: Lithuania: Recognized producer organisations

Company analysis

Table 55 lists the largest fishing companies incorporated in Lithuania on the basis of gross tonnage and number of vessels. The figures are from 2011, more recent Lithuanian fisheries reports do not provide company level details. Therefore, it is likely that these figures are not an accurate reflection of the current state of these companies. The purpose of this list to identify companies whose company structures are analysed in the sections below. The companies Baltlanta, Atlantic High Sea Fishing and Banginis were mentioned as three of the biggest fishing companies in Lithuania today, by two Lithuanian fisheries experts (Lithuanian Fisheries Expert 1, 2018; Lithuanian Fisheries Expert 2, 2018).

Table 55: Lithuania: Largest fishing companies by gross tonnage (2011)

Baltlanta

Baltlanta is a Lithuanian fishing company established in 1996 (Baltlanta, 2018a). It is focused on fish catching and processing in the Baltic Sea and the Atlantic Oceans. Its processed fish and fishmeal are mainly distributed to Eastern European countries and Commonwealth of Independent States (EMIS, 2018). Its main fishing grounds are Morocco and Mauritania. Fish caught off the coast of Africa is sold in West African countries (Baltlanta, 2018a). Baltlanta’s main products from the Atlantic Ocean are mackerel and sardines (Baltlanta, 2018b). It is the largest fishing company in Lithuania by gross tonnage and number of vessels (Vaitkevičius et al, 2011).

In 2014, Baltlanta was sold by two Panamanian registered companies to Spanish Lispa Holding (Baltlanta, 2018b). As Figure 76 shows, Lispa is a subsidiary of Three Towns Capital, owned by Swedish Magnus Roth and Russian Vitaly Orlov. These two investors are also the ultimate owners of the large fully integrated Russian fishing group NOREBO. NOREBO’s brands include: Glacialis, Ocean Spirit and Borealis (Glacialis, 2018; Ocean Spirit, 2018; Borealis, 2018).

There is no consolidated financial information available for both Three Towns Capital and Lispa. However, there is financial information available for Baltlanta at the company level from 2015 and before. In 2015, the company generated revenues of EUR 46 million, down from approximately EUR 71 million in 2014 (Orbis, 2018m). Baltlanta had total assets worth approximately EUR 73 million in 2015, down EUR 11 million from EUR 84 million in 2014. Apparently, there has been a significant decrease in employees working for Baltlanta, from 255 in 2014 to 136 in 2015 and 96 employees in 2016.

Figure 76: Baltlanta company structure

From the company structure and description above it is clear that Baltlanta is both vertically and horizontally integrated. The company has fishing activities both in the Baltic Sea and the Atlantic. This indicates international structural horizontal integration. Baltlanta itself operates freezer trawlers which are themselves steps in vertical integration. However, the ultimate owners of Baltlanta also own a large fully integrated seafood company that operates in fish catching, processing, trade, distribution and wholesale globally.

Atlantic High Sea Fishing Company

Atlantic High Sea Fishing Company is a large Lithuanian fishing company. As Figure 77 shows, it is a subsidiary of Dutch PP Group (see section 18.3.1). Atlantic High Sea Fishing Company operates two large pelagic fishing vessels.

In 2016, Atlantic High Sea Fishing company had 79 employees. It generated EUR 16.4 million in revenues, with EUR 14.8 million in total assets in the same year. In 2015, the company had the same number of employees. That year, it generated EUR 17.3 million in revenues, and held total assets worth EUR 16.8 million (Orbis, 2018n).

Figure 77: Atlantic High Sea Fishing Company structure

As part of the PP Group (see section 18.3.1), Atlantic High Sea Fishing Company is part of a fully integrated seafood company.

Norgertus

Norgertus is a Lithuanian fishing company. It operates one large pelagic fishing vessel. The company seems to be owned by the director, Saulius Staskus. Further information regarding the company is limited. Data service providers estimate that in 2016, the company generated operating revenues of approximately EUR 15,000 (Orbis, 2018o). This figure seems low for a company operating such a large vessel.

Figure 78: Norgertus company structure

From the above information there is no evidence of either vertical or horizontal integration in Norgertus.

Banginis

Banginis is a Lithuanian pelagic fishing company. It operates four fishing vessels (Banginis, 2018). The vessels target herring, sprat and cod in the Baltic sea. The boats land their catch in Skagen, Denmark (Svensson, 2014). The director of Banginis, Algirdas Aušra, is assumed to be the ultimate owner of Banginis.

As Figure 79 shows, Algirdas Aušra is a shareholder in FF Skagen Fond. FF Skagen Fond is the majority shareholder of FF Skagen AS. Through its subsidiary H.F. Industrifiskehandel. FF Skagen has a network of fish sales and distribution affiliates around the world (e.g. Norway, South Africa, China, Mauritania, Chile, Singapore, and Greece) (Orbis, 2018p). FF Skagen AS also holds shares or is full owner of processing, wholesale, trade and distribution companies in Sweden and Denmark.

FF Skagen AS is one of the largest fishmeal and fish oil producers in the world, exporting to over 60 countries (FF Skagen AS, 2018a).

The Swedish fish processing company is owned by an investment company – Västkustfiske. Västkustfiske is a wholly-owned subsidiary of Swedish fishermen’s association Svenska Västkustfiskarnas Centralförbund (Västkustfisk SVC) and invests in a number of companies in the seafood sector in Sweden and Poland (see section 19.3.2)

The minority shareholder of FF Skagen AS, P/F Havsbrun, is ultimately owned by Bakkafrost. Stock-listed Bakkafrost is the largest salmon farmer in the Faroe Islands. It is likely that Bakkafrost sources the fishmeal used for its salmon farming, at least in part, from its affiliate FF Skagen through subsidiary P/F Havsbrun.

Banginis generated revenues of EUR 1.6 million in 2016. This was an increase by around half from the EUR 1.1 million generated in 2015 (Orbis, 2018q). No further financial information is available.

In 2017, FF Skagen AS generated revenues of EUR 309 million, up from EUR 270 million a year earlier. In 2017, the company held total assets worth EUR 233 million, an increase from EUR 201 million in 2016 (FF Skagen AS, 2018b).

Figure 79: Banginis company structure

 

Looking at Banginis’ company structure, it shows that the company is integrated in a large network of seafood companies. As FF Skagen is primarily a fishmeal and fish oil producer, it is likely that Banginis lands its fish in Skagen for industrial rather than human consumption. FF Skagen processes the harvested fish into fishmeal and fish oil used for fish farms, such as those operated by Bakkafrost – part of the same network of seafood companies. Banginis itself is not structurally vertically or horizontally integrated. Its affiliates through FF Skagen Fond are not engaged in fish catching, but primarily in processing and distribution. This indicates a level of structural vertical rather than horizontal integration.

Grinvita

Grinvita is a Lithuania fishing company. It operates two small vessels. The company is estimated to have generated revenues of approximately EUR 15,000 in 2016, up from EUR 14,900 in 2015 (Orbis, 2018s). No further information could be identified for Grinvita.

Figure 80: Grinvita company structure

From the above diagram and description, there is no evidence of vertical or horizontal integration in the company structure of Grinvita.

Senoji Baltija

Senoji Baltija is a Lithuanian fishing company. Table 55 shows that it operates at least two vessels. A more recent source suggests that Senoji Baltija operates six vessels (Orbis, 2018r). In 2015, the company generated approximately EUR 735,000 in revenue (Orbis, 2018t). This was an increase from EUR 555,000 in 2014. The company owned total assets worth EUR 1.4 million in 2015, down from EUR 1.5 million in 2014 (Orbis, 2018t). The size of Senoji Baltija’s workforce also decreased from 51 employees in 2014, to 49 in 2015.

Figure 81: Senoji Baltija company structure

From the company structure and descriptions above, Senoji Baltija has engaged in structural horizontal integration by expanding the fleet. However, there are no indications of structural vertical integration.

Integration

The above analysis has shown that three of the six analysed Lithuanian fishing companies are part of larger fully integrated seafood groups. Moreover, more than 40% of the fishing companies active in Lithuania own more than one vessel. These findings suggest a significant degree of horizontal integration, in addition to international vertical integration.

Lithuanian Fisheries Expert 1 stated that in Lithuania horizontal integration takes place through acquiring more quota and sometimes through acquiring more vessels (Lithuanian Fisheries Expert 1, 2018). Lithuanian Fisheries Expert 2 noted that “usually, but not always, fishing companies buy vessels together with transferable fishing rights” (Lithuanian Fisheries Expert 2, 2018). Informal integration takes place through quota swaps and borrowing.

European policy influences this kind of integration by allowing fishing rights to be transferred. “There is a limited access to fisheries resources. For expanding their activities, fishing companies have to buy available fishing opportunities from other fishing companies” (Lithuanian Fisheries Expert 2, 2018). This leads to monopolisation of fishing quotas. Both respondents indicate that integration limits competition in the country.

The vertical integration that takes place, it is mostly in the small-scale coastal fishing sector (Lithuanian Fisheries Expert 2, 2018).

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