Arkhangelsky Algae Plant

History

Inctica bought the Arkhangelsk Algae Plant

In early February 2023, it became known that the largest Russian producer of salmon and trout Inarctica (PJSC Inarctica) entered into a deal to buy the Arkhangelsk Algae Plant (AVK LLC).

As noted, AVK is the only enterprise in Russia for the extraction and deep processing of brown algae of the White Sea (kelp, fucus, anfelium). The deal will allow Inarctica to diversify its business amid the expected decline in demand for red fish. In particular, Inarctica will be able to enter the growing market of algae and their processing products, develop in the field of biotechnology, aquaculture of algae. The financial terms of the contract were not disclosed, but it is said that under the terms of the transaction control over 100% of the authorized capital of AVK was obtained.

The deal will allow Inarctica to diversify its business

For more than a century of history, AVK has developed a unique production base: the plant has no analogues in Europe in terms of the depth of processing and extraction of useful substances from algae, Inarctica says.

The Kommersant newspaper, citing data from the National Rating Agency, reports that due to disruption of supply chains and currency fluctuations, the Russian market for red fish in 2022 could decline compared to 2014-2015. Against the background of macroeconomic difficulties and a high level of inflation, fish consumption in Russia may decrease by 5-7% per person per year with a decrease in the share of salmon in the demand structure. In such a situation, the acquisition of AVK may become a new promising area for Inarctica. The company already has established contacts with the largest networks, which will allow, if necessary, to expand the distribution of the algae plant. On the other hand, competing with Chinese suppliers of algae products will be difficult in price. In addition, this industry requires significant investments, including in scientific developments.^[1][2]

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