Karavela can once again export to Russia
Former market has changed in many ways Janis Endele, Marketing Director in the canning company Karavela reckons that the ban by Russia on Latvian canned ďŹ sh was as much a decision to retaliate against EU sanctions as an emotional response to what he considers unnecessary slights inicted by the Latvians. His company is the only ďŹ sh cannery that since the end of last year has been allowed once again to export its products to Russia after a four-year hiatus.
D
uring that period the company has focused on breaking into markets in other countries, mainly in the EU, but also in the United States, and Asia. These attempts have been aided by the EMFF which has supported promotion activities for Latvian products on other markets, such as attendance at trade fairs.
Restarting exports is no cakewalk The approval to restart exports to Russia came as a surprise, he says, however for the first three months we could not send anything there as we had prior commitments to customers in the EU. Instead the company spent this time familiarising itself with the new rules and regulations that had come into force since the ban was imposed in 2014. In April the first shipment was made, but the volumes so far have been very small. Over the next months more activities are planned and in the middle of September the company will also attend a trade fair in Russia. However, Russia has been a tumultuous market for the company with currency crises in 1998, 2008, and 2014-16 and the ban on imports in 2014. This has made Mr Endele and his partner in the company, Andris Bite, wary of investing too
much in to Russia-focused activities. Things can change from one day to the next, he says, and when the environment is so unpredictable one has to be cautious. In addition, the domestic canned fish industry in Russia has increased in size and there are a few facilities producing very highquality products. In Latvia at the same time production costs have increased in particular those of labour which have doubled over the last five years and which are a major component of the canned sprat production. As the only Latvian canning company that is currently permitted to export to Russia, Karavela can choose its partners there. As a Latvian company it also has certain advantages over Russian firms making similar smoked sprats. The experience in this kind of production, the fresh raw material, the quality of which is improving all the time as the fishermen implement measures to preserve the quality, the fact of having sold to demanding western European markets, all give Karavela a lead. Moreover, the ban also suspended supplies of frozen Latvian sprat to Russian processors, so they had to rely on Russian vessels for the raw material. These would then have to start implementing the same kind of quality measures their
Janis Endele, Marketing Director in Karavela, keeps a record of all the trade fairs he has attended. The effort has resulted in customers in many parts of the world.
Latvian counterparts are already very familiar with and this will take time.
The Russian market has changed in many respects Four years ago, spending power in Russia was roughly comparable to what it was in parts of Europe. Since then however the collapse of the rouble has made imported products vastly more expensive. Mr Endele recalls how in 2014 a big supermarket on a Friday evening had 50 check-out counters and the average wait was 20 minutes, while four years later
the number of counters had fallen to 20, shopping trolleys are emptier, and shelves are filled with value products. In other words, the market has changed. If four years ago the Latvian industry was selling 100m cans of smoked sprats to Russia, today Mr Endele estimates it would not be more than 5m cans. The product is premium, the price is higher, and there are fewer who can afford it, he explains. This also contributes to the company’s reluctance to invest heavily in Russia. While Karavela and some of the other companies in Latvia are doing relatively well the
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