Taking Blue Whiting Up the Value Chain

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Varðin makes another major announcement with the introduction of a new facility for mince and surimi from blue whiting, adding significant value to a species that has largely remained under-utilized in the Faroe Islands.

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[By B. Tyril and Q. Bates]

The Varðin Pelagic processing facility at Tvøroyri is set to expand into producing surimi from blue whiting. With roughly a hundred days of the year when blue whiting are close enough in Faroese waters to supply production with the very fresh catch needed for surimi production, the new production line will take Varðin a major step forward in the blue whiting marketing value chain.

From being purely a fishing company a few years ago, Varðin has grown to become the largest Faroese pelagic operator, with its own vessels, processing factory and sales arm.

One of the keys to the new venture is seen in the factory’s location only six to eight hours from fishing grounds.

According to Varðin Pelagic sales manager Bogi Johannesen, the initial challenge for the surimi facility is to obtain catches in prime condition in terms of freshness and quality for processing with two levels of production.

A basic level is block frozen mince, while there are also opportunities for higher levels of production to make crab and shrimp sticks, with markets for both in Europe, Asia and the USA.

“We processed 11,500 tonnes of whole frozen blue whiting in 2015, although the majority of blue whiting landings in the Faroe Islands go elsewhere for fishmeal production,” Mr. Johannesen said.

From the 1st of December this year, Varðin Pelagic plans to be able to deliver both minced blue whiting and higher value surimi in 10kg frozen blocks for manufacturing consumer-ready products such as crab sticks. If successful, the new products will add significant value to blue whiting catches.

“We expect to process between 6,000 and 8,000 tonnes of mince and surimi products per year,” Mr. Johannesen added. “This requires around 25,000 tonnes of fresh-caught blue whiting—moving into surimi products is the next level in the value chain after mince.”

The decision to go down this route was influenced by the number of enquiries they have received for mince, according to CEO Bogi Jacobsen.

“We’re looking at markets in Asia, Europe and North America for this production,” he noted.

Large employer

A subtle change of name, meanwhile, is about to take place. While the processing facility’s company name remains Varðin Pelagic, products are going to be sold under the simpler Vardin brand name—a change announced at the European Seafood Exposition this year (2016).

“Customers all call us Vardin anyway, so this simplifies things,” Mr. Jacobsen added.

Back in 2011, Varðin assessed its position in the fishing business and decided to complement the catch side with processing and sales. The following year the company embarked on building its processing plant for pelagic species and had it completed in only six months. Now with three full years of production behind them, the people at Varðin are sure that they did the right thing, although it wasn’t a risk-free undertaking at the time.

“The first half year we processed 30,000 tonnes, then 100,000 tonnes in each of the next two years and around 70,000 tonnes last year,” Mr. Jacobsen said.

“This venture has proved successful and  the financial results have been positive every year.”

The factory was extended early on and its capacity boosted from the initial 600 tonne daily throughput rate to around 1,000 tonnes of blue whiting or 800 tonnes of mackerel.

At the time the choice of location was a somewhat controversial one. Defying pressure to site the new factory in the Faroese pelagic heartland at Fuglafjørður, Varðin decided instead to build on the southern island of Suðuroy, strategically closer to fishing grounds but further from the company’s roots at Gøta.

In fact, Suðuroy had been a black spot in the Faroes in terms of economic development, with unemployment and a 30-year trickle of people leaving the island for other parts of the country or to move abroad. Now Varðin Pelagic is one of the island’s largest employers, with about 150 people on payroll.

“The outflow of people may not have stopped, but it has at least stabilized,” said Varðin’s administration manager, Tórheðin Jensen.

In 2015 Varðin Pelagic’s exports totaled 78,000 tonnes, at a value of 635 million dkk, (85.4M eur) with 42,500 tonnes of mackerel accounting for more than half of the volume, of which the Nigerian market absorbed 21,000 tonnes. This is now set to change with the country’s buying ability reduced by the falling price of oil, and European and Asian countries, meanwhile—notably Russia, the Faroe Islands’ largest export market—making up for the gap.

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2017-04-20T22:46:41+00:00 May 21st, 2016|Seafood, Fisheries, Aquaculture|0 Comments

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