Value Regular readers of Navigatio will no doubt be able to remember Royal Greenland’s mission by heart – but just in case, I will repeat it here: In order to maximise the value of the North Atlantic’s natural resources, we cannot simply go out and catch more fish. provement – and thus the chance to get a higher value out of every last kilo of fish or shellfish which we have at our disposal. “We sustainably maximise the value of the North Atlantic marine resources, for the benefit of the society we are part of and for our owners.” That part of the mission which I would like to address in this issue of Navigatio is the line “we maximise the value…” What does it mean, in practical terms, to maximise the value of the resources we have access to? I am afraid that we will have to start with some maths. The total value of the natural resources which a company (or a country or a region) has at its disposal equals: Amount of fish resources X (Sales price per kg – Production costs per kg) The value of the resources can therefore be increased either by more fishing, by selling the products at a higher price or by producing them more cheaply. It sounds simple enough, but it is a little harder in practice. There is also a fourth way to increase the value of the resources, but we shall save that until the end. Increase the amount of fish resources What characterises our products is that they are all, practically speaking, based on wild stock (as opposed to farmed). At Royal Greenland we strongly believe that all fishing should be done sustainably. This means that we would like to see a fisheries management which to the greatest extent possible is based on facts and on scientific assessments of the fish stocks. Sometimes we disagree with the biologists about their assessments. In these cases, we don’t argue that the fisheries management should ignore the scientific assessments, but rather we discuss the data and the models that form the basis for the assessments with the biologists in order to understand why their assessments differ from what we see in the field when fishing. There are two things which we can do however in terms of the quantities we fish. Firstly, we can ensure that the quotas which are given out from sustainable fishery management are indeed caught. This might sound strange, but in most of the areas where we fish, there are unfished quotas remaining in the sea at the end of each year. Secondly, we can do our best to ensure that those resources which are not presently exploited, or which are not exploited sufficiently enough are commercialised. This could be lobsters, sea cucumbers, sea urchins, scallops, capelin or something else entirely, depending on where we are. Produce our products more cheaply Here at Royal Greenland we are experts at efficient production. We are better than most at ensuring high yields with low volumes of working hours, water and energy. We can always perform better – and we shall, every single year. Every last quarter and half a percentage point of efficiency counts. When, like we do, you sell 100,000 tonnes of finished products a year, even small improvements in production can be of significant value to the bottom line. When we talk about maximising the value of our resources, we are naturally talking as well about the many small, ongoing improvements we can make – but also the more radical initiatives. Most important here is the utilisation rate of the fish or shellfish that we catch or purchase. When we fillet a fish or peel a prawn, only 35-40 per cent of the caught weight will become a fillet or a peeled prawn. We can create even greater value if we can also exploit the remaining 60-65 per cent. Fortunately, this is something which we are already good at in terms of, for example, halibut and to a certain extent also prawns, but this is an area where there is lots of potential for im- Sell our products at higher prices Our products are sold on extremely competitive markets against equivalent products from other producers, but the toughest competition actually comes from other fish, including farmed stocks, and from wholly different products such as chicken, pork and even soya protein. When you visit a German supermarket or a Chinese online store, you get a good impression of just how many choices the world’s consumers have. This means – unfortunately for us – that we cannot simply set prices as it suits us. They must be carefully matched against the prices of warm water shrimps, chicken feet, tofu and T-bone steak (depending on where in the world we are). What we can do however, and what we actually do to a great extent, is to ensure that every single prawn, crab, halibut or cod ends up with that customer who believes the product is most worth it. If you look at the products that come from Greenland, 25 years ago pretty much all of them would have ended up on European plates. Today, over a third of it is eaten in Asia. This development has not just simply happened. It has happened because expert sellers and business partners have been able to place our products on growth markets which, both geographically and culturally, are miles apart from the more traditional markets. In this way we have managed to achieve higher prices for our products, thereby generating a higher value. The fourth approach: Produce new and better products We strive to ensure that all the fish that can be fished sustainably are fished. We are constantly streamlining our production. We increase the utilisation rate of the fish and shellfish that we catch and purchase. We constantly ensure that every single prawn or crab will be sold on the market where it is valued most. In general, we do a lot of things right in terms of maximising the value of the resources we have access to. 2 NAVIGATIO NO. 2 • 2017
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