Agama Group of Companies bought out the share of Royal Greenland, which suspended work in the Russian Federation, in seafood production

Having suspended trade with the Russian Federation, a major supplier of northern shrimp to the world, Royal Greenland, headquartered in Greenland, has left the local business. The group sold its 50% stake in production near Moscow to its partner, Agama Group of Companies, which has probably already found new suppliers of raw materials. The presence of such a foreign participant in the capital could greatly complicate the business, experts say.

The structure of the Royal Greenland group, owned by the government of Greenland, withdrew from the joint venture with the Agama Group for the processing of fish and seafood, Agama Royal Greenland LLC, where it owned 50%. In December 2023, as follows from the Unified State Register of Legal Entities, 100% of the company was received by Agama Group of Companies. The general director of the group, Vladimir Gorelov, declined to comment; Royal Greenland did not respond to Kommersant.

“Agama Royal Greenland” produces frozen and chilled products from fish, crustaceans, and shellfish under the Agama and “Bay of Plenty” brands in the Moscow region. In 2022, the enterprise produced more than 9 thousand tons of products; it is planned to increase capacity by one and a half times, the regional Ministry of Agriculture and Food reported. “Agama” also owns a factory in Murmansk with a processing capacity of 500 tons of cod fish per month, and “Fish Manufactory No. 1” stores. And in 2022, the group bought the Russian production of frozen vegetables from the Polish Hortex.

Royal Greenland is considered a major supplier of northern shrimp and halibut in the world, uniting 49 factories in Greenland, Europe and Canada. In the joint venture, Royal Greenland was responsible for the supply of raw materials, and Agama was responsible for distribution, The Fish Site wrote. After the outbreak of hostilities in Ukraine, Royal Greenland announced the stoppage of supplies to the Russian Federation, the annual cost of which was estimated at 100 million Danish kroner (1.3 billion rubles at the Central Bank exchange rate). After this decision, a Kommersant source in the market says, Agama’s relationship with Royal Greenland became complicated, and as a result, the Russian group agreed to buy out the former partner’s share.

Natalia Abtseshko, head of the international projects group at Vegas Lex, says that in addition to suspending supplies to the Russian Federation and fulfilling other obligations under internal corporate agreements, a foreign participant could block the adoption of key decisions for the company, especially when owning 50% of the shares. According to her, there were examples when the suspension of the activities of a foreign participant in Russia actually meant the stop of all the main commercial activities of the local subsidiary. atLegal partner Andrey Toryannikov points out that Agama Group of Companies has been systematically expanding its business lately, so buying out a share from a former foreign partner seems logical. Investment banker Ilya Shumov believes that the presence of an owner from an “unfriendly” country among the participants could hinder the development of business in the Russian Federation. In his opinion, the value of Agama Royal Greenland most likely does not exceed the amount of the company’s capital and reserves – about 300 million rubles. by the end of 2022.

Executive Director of the Association of Production and Trade Enterprises of the Fish Market Alexander Fomin notes that until 2014, northern shrimp dominated the Russian market, and after the Russian Federation restricted food imports from Western countries, the share of “king” shrimp, grown mainly in Asia, began to grow. According to him, farmed “king” shrimp today account for about 80% of the Russian market. Such products cost one and a half to two times less than wild shrimp and are usually sold in peeled form, which is why they are in demand, he points out. The Perekrestok online store sells Agama Royal Greenland’s Bay of Plenty king prawns, imported from Ecuador, judging by the packaging.

According to the calculations of the Fisheries Union, imports of fish and seafood in January-October 2023 year-on-year increased in volume by 26%, to 465 thousand tons, and in money by 15%, to $1.9 billion rubles. “King” shrimp accounted for 9% of import volume. The product’s share of imports is declining, likely due to declining demand in favor of cheaper alternatives such as giant squid, analysts said.

Anatoly Kostyrev