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SH 223 C2923 no.83-01
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DFO ilii~H~I~~''"' 12000208
STOCKFISH TECHNICAL MISSION TO SCANDINAVIAN COUNTRIES (JUNE 14-18,1982)
MAJOR FINDINGS
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T~lt: LIBRARY BL::DFORD INSTITUTE OF CCEANOGRAPHY BOX '006 DARTM OUTH, N.S. B2Y 4A 2
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STOCKFISH TECHNICAL MISSION TO SCANDINAVIAN COUNTRIES (JUNE 14-18,1982)
MAJOR FINDINGS
Dr. Chand Passey, P. Eng. Senior Marketing Planning Adv i sor Marketing Directorate Department of Fisheries & Oceans Ottawa, Canada
Rev. Dec. 8, 1982
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TABLE OF CONTENTS
Page 1. EXECUTIVE SUMMARY . . . . . . . . . • . . . . . . . . . . . • . . . . . . . . . . . . . . . . . . . . . . . . 1 2. PURPOSE OF THE MISSION .....•..•...•............................ 2 3. SPECIFIC OBJECTIVES ............................................ 2 4. MAJOR FINDINGS . . . . . . . . . . . . . . • . . . . . • . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4.1 General ..................................................... 4
4.2 Cost of Factor Inputs ••........................•.......... 6 4.3 Machinery to Prepare fish for Drying ....•....•............ 7
A) Fish head cutting machines ....................•........ 7 B) Fish tying machines ...........•.................•...... 8 C) Baling machines •.......•..........•.....•.............. 8
4.4 Open-air Drying of Stockfish .....•........................ 9 4.5 Mechanical Drying of Stockfish ............................ 14 4.6 Products, Markets and Marketing of Stockfish .............. 24
5. RELEVANCE OF FINDINGS TO CANADA ................................ 28
APPENDIX
I LIST OF MISISON MEMBERS ....•................................... 29 I I GENERAL APPROACH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 III ITINERARY . . . . . . . . . . . . . . . . . . . . . . . . . • . . . . . . . . . . . . . . . • . . . . . . . . . . . . 31 IV BACKGROUND OF PERSONS/FIRMS VISITED .. .. .. . . .. .. .. .. .. .. . . . .. . . . 34
ATTACHMENTS
1. Union of Stockfish Producers, Iceland. "Laws of the Union of Stockfi sh Producers. 11 Trans 1 ated from the most recent ed i t i on av a i l ab l e . . . . . . . . . . . . . . . . . . ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 9
2. Anonymous. 1982. "It is not economical to sell highly processed fish products today." Translation of an article which appeared in the June 18, 1982 edition of 11 FISKARIN 11
(received from the Oslo Post) ...........................•........ 46
1. EXECUTIVE SUMMARY
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STOCKFISH TECHNICAL MISSION TO
SCANDINAVIAN COUNTRIES
MAJOR FINDINGS
We are pleased to report that the fact-finding stockfish Technical Mission organized and mounted by the Marketing Directorate has been quite successful in probing the technical and economic aspects of stockfish production/marketing options in Norway, Swe1jen and Iceland ..
The insight gained by the Mission should help the Marketing Directorate to develop policies, programs and initiatives, based on
distinctive domestic competence and strengths to help Canada become a major force in the production and export of stockfish and related products. We trust the information will not only be helpful but will also be utilized by others in government and industry.
The mission was comprised of Chand Passey of the Marketing
Directorate, Wally McDougall of Scotia-Fundy Region, Bruce Chapman of Fisheries Council of Canada and Philip West of Fisheries Products (as
listed in Appendix I). The group met with key stockfish producers/exporters, equipment manufacturers and stockfish export
associations.
The results of the mission indicate that because of the Scandinavians' more favorable weather for open air drying, and their lead in the development of mechanical drying of stockfish, Canada. may not be able to achieve significant penetration of the stockfish markets in the absence of an expeditious development of a responsive production and marketing capability.
In what follows, the purpose and some of the major findings of the
mission and their relevance to Canada are summarized.
The itinerary and other housekeeping details are appended to the
Report (Appendix II and III).,
- 2 -
2. PURPOSE OF THE MISSION
The purpose of the mission was to probe the production and marketing environment and attitudes of stockfish producers/exporters and mechanical drying equipment manufacturers with a view of gaining
insight into the strengths and weaknesses of stockfish production and
marketing approaches and systems in Scandinavian countries. Another purpose was to identify how Canada can secure and maintain, over the
long term, a distinct marketing edge over the competition and take
full advantage of stockfish marketing opportunities.
3. SPECIFIC OBJECTIVES
The following were the main objectives of this fact-finding mission:
A) To assess the views of Scandinavian stockfish producers, traders and others on the traditional and emergent methods of stockfish production.
B) To probe what the Scandinavian producers and/or traders perceive as their major strengths in the production and marketing of
stockfish.
C) To learn what the Scandinavian producers and/or traders consider
to be major problem(s), if any, in servicing the stockfish
markets, seasonality of production, lack of synchronization
between timing patterns of demand and timing patterns of supply.
D) To probe what the Scandinavian producers and/or traders have
experienced as the major production related problems, e.g.
inadequacy of drying leading to product loss in storage, long drying periods, product loss during drying due to vagaries in the
weather, and/or environmental contaminations.
E) To assess the current status of and future directions for
development of mechanical drying in Scandinavian countries to
overcome production and marketing related problems.
-3-
F) To probe what equipment manufacturers see ats the major problems
facing stockfi sh producers and traders in production and
marketing of stockfish. To further probe how their equipment is
likely to help overcome these problems.
G) To the extent possible, probe into the production costs of
stockfish in the Scandinavian countries, by various cost
components: e.g. raw material, labour before drying, labour
during drying, energy and capital component of drying costs,
labour for packaging, and production overhead.
H) To assess what the producers, traders, officials, and equipment
manufacturers feel would be the likely impact of mechanical
drying on the product quality, product acceptability, production
costs and marketability of stockfish.
I) To learn about the stockfish grading practices used in Scandinavian countries by exploring this matter in the official
circles, talking to private inspection agencies, graders, and
exporters.
J) To obtain first hand knowledge about how the processing
requirements and Scandinavian practices differ in the drying of
cod vs. other ground fish species (e.g., haddock, pollack, cusk,
and hake).
K) To investigate why relatively little stockfish is produced in
sp 1 it form even though reportedly it commands a premium price.
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4. MAJOR FlNDINGS
4 .1 General
A) Market specifications stipulate that the fish must not have been frozen while being dried as the freezing leads to easily-identifiable defect (porosity). While at one time Nigerian market accepted the porous dried stockfish (commonly known as "bread" stockfish), this market has now almost disappeared. This does not mean, however, that frost-damaged fish cannot be sold at reduced prices.
B) Fish which has been previously frozen is suitable for making good quality stockfish provided it is completely thawed out before being dried.
C) It appears that it is necessary to bleed fish while it is still alive in order to produce good quality stockfish.
D) Members were told that long-lined fish makes the best quality stockfish.
E) In Norway, we were told that as a general rule the top quality raw material is allocated for the production of frozen fillets, salt cod and Italian grade stockfish. Whatever is not directed towards these product forms is allocated for the production of stockfish and frozen blocks.
E.1) In Norway, the stockfish producers prefer to leave the napes attached to the body of the fish as it increases the yield of stockfish per fish.
F) The predrying processing and handling methods for the production of stockfish do not generally differ from species to species. However, it was mentioned that cusk should be held on ice for at least 1 week (in Norway they hold it for as long as 4 weeks) before the start of drying.
F.l) Fat content of fish for mechanical drying should not exceed 6-7% (e.g. in case of Blue Whiting).
..,. 5 -
G) The yield of stockfish from headed and gutted fish depends
upon the species, moisture content of finished product, and
any production losses. For cusk the yield was reported to
be 24%, and for cod and haddock 26-27% (seems high).
H) Norwegian regulations stipulate a moisture content of 16% in
exported finished stockfish. However, it was reported that
most of the product has a moisture content of about 20%. It is difficult to reduce the moisture content below 22-24% when drying the fish outdoors in open air. An additional
period of 4-6 weeks for finish drying in well ventilated warehouses is necessary to reduce the moisture to 20%. Good ventilation for stockfish being finish-dried or stored in warehouses is extremely important. There are also
advantages of placing stockfish on pallets in criss-cross rows.
I) While a premium was paid for ''split" stockfish over the
"round" in Nigeria before the civil war, such difference in prices has since disappeared. We were told that there is still some premium received for split stockfish in Cameroon.
J) Stockfish reprocessed into "Lutefisk" for the Swedish and other ethenic markets has to be of high quality and in the split form. Such stockfish commands premium prices.
Usually ling is used.
K) Producers saw merit in mechanical drying of stockfish, especially during summer. They felt that labour savings, the reduction of raw material costs in summer (since the hanging of fish outdoors ceases in May/June), and improved
cash flow possibilities should pay for the cost of
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mechanical drying equipment. According to the two Norwegian producers who have installed mechanical drying facilities, the Nigerian consumers have not expressed any concerns about mechanically dried stockfish. There was some question raised by an Icelander, however, about the market acceptance of mechanically dried stockfish especially in times of good supply. This concern may have been expressed for strategic reasons, e.g. to discourage Canada from entering the stockfish business in a big way.
4.2 Costl of Factor Inputs
A) Labour (Norway) engaged in stockfish production is paid
about NKr 40./hour plus about 40% in benefits, corresponding to a total of about C$ 12./hour.
B) Transportation cost from Norway to Nigeria is about NKr
85./bale (of 45kg), corresponding to about C$ 0.18/lb of stockfish.
C) RawMaterial:
In Norway, the price paid for headed and gutted cod averages about NKr 6.00/kg (C$ 0.59/lb). Price paid for frozen (imported) headed and gutted cod averages about US$ 1.00/kg (C$ 0.58/lb.). A leading stockfish producer estimated that it further
costs them about NKr 1.00/kg (C$ 0.10/lb.) to carry the raw material inventory for 1 month.
D) Energy:
1 Exchange rates
In Norway, fuel oil costs about NKr 1.80/litre (C$ 0.39/litre).
1 NKr = C$ 0.2160 1 SKr = C$ 0.2252 1 !Kr = C$ 0.1196 1 US$ = C$ 1.2690
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In Norway, electriicity costs about NKr 0.14/KWhr (C$ 0.03/KWhr).
E) Interest Rates
One leading stockfish producer in Norway estimated that while their own interest costs were about 17%/year, the interest cost to smaller producers was about 20-24%/ year.
F) Finished goods inventory
Some exporters have to hold stockfish in storage for as long as 6 months. While the reason given was need for
consolidations of shipments, it is likely that the real cause may be the tendency to avoid spr"ing shipments for the fear that inadequately dried product may spoil in the hot and humid summer in Nigeria. J\nother reason
may be inadequate stockfish production in summer months
(hanging for outdoor (i.e. open air) drying ceases in
May/June). The demand of fall and winter months must
therefore be met from the previous winter/spring
production cycle.
4.3 Machinery to Prepare Fish for Drying
A) Fish head cutting machines
Traust Company of Reykjavik, Iceland, manufactures a
fish head cutting machine that 11tears 11 the head complete
with the nape from the body of the fish. Traust's machine can handle a maximum of 40 fish per minute and requires one
operator per machine. It costs about US$ 12 000.
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In Iceland, cod heads from frozen blocks and fillet operations are used for drying. The Nigerians seem to
prefer dried cod heads with the nape attached as it· increases the edible yield.
There is a fair size market in Nigeria for dried cod
heads. During 1981, Iceland produced about 7 000 tonnes of dried cod heads for Nigeria. (Dried head of other species of fish are not yet so much in demand).
B) Fish tying machines
Two ready-to-dry fish are tied together to facilitate
hanging. Traditionally, this used to be done manually but
is now more and more being done by machines.
There are essentially two types of fish tying machines.
i) Those that stitch the ends of a piece of nylon or fibre glass string (about 411 -6 11 long) to the tails of the two
fish which are tied together; and
ii) Those that tie the two tails in the knot of a piece of nylon or fibre glass string.
The first method is growing in popularity and is used for stockfish production destined for the Nigerian market. The second method is used for stockfish production destined
for the Italian market since this market does not yet accept stockfish with the string stitched on to it.
C) Baling machines
Stockfish is graded by size and quality and must be baled to prepare it for export. A standard bale of
stockfish destined for the Nigerian market measures 45 cm x
50 cm x 70 cm and weighs 45 kg.
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The bale is strapped tightly in 2 or 3 places with steel wire by a strapping machine before the! bale is packed in a burlap bag.
Traust Company of Reykjavik, Iceland, manufactures a completely automatic baling machine. A worker dumps a pre
weighed quantity (45 kg, arranged head and tail) of stock
fish from a magazine into the loading section of the machine. At the push of a button the machine presses the
stockfish into proper bale form, ties it with a wire, and discharges the bale into a burlap bag, resetting the machine
automatically for the next cycle.
The Traust machine can pack 40-60 bales/hour, requires
one operator and an additional 4-5 workers to keep the machine fed and to remove the bales from the machine. Such a baling machine costs about CS 25 000. The strapping machine costs an additional CS 15 000 approximately. Traust has sold some 30 of these machines in Iceland, 2 in Norway,
and one each in Sweden and Alaska.
4.4 Open-air Drying of Stockfis~
A) The climate along the entire West Coast of Norway
(from Lindesnes to Lofoten - the main areas involved in stockfish production) is exceptionally mild with mean
temperatures of 1-2 deg.C. Similar mild weather prevails in parts of Sweden and Iceland, engaged in stockfish
production. These countries can therefore hang the fish outdoors to dry in fall, winter and spring, without the risk
of freezing damage. Weather on the Canadian Atlantic Coast, on the other hand, is not so ideal.
B) During the summer months (May/June to September), there is
the ever-present risk, even in the Scandinavian countries, of fish spoiling before it is fully dried if the weather
were turns warmer or if it rains soon after the fish is hung
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outdoors to dry. The problems of stockfish production in
warm humid or misty weather are further aggravated by the
risk of fly-infestation. While visiting an open-air drying facility, the team members saw some inadequately dried fish (one among the 5-10 fish inspected) that was infested with maggot-like creatures. The infestation is likely to spread
when the affected fish is placed in contact with other stockfish during finish drying or subsequent baling and distribution.
Use of an approved insecticide (Pyrethrum) can deter the flies from laying eggs on the partially driE~d or re-wetted
fish. However, the chemical is easily washi:d off in the rain. Therefore the fish must be resprayed immediately
after rain to ensure continued protection. This adds to the cost of production. Moreover, the treatment leaves an
undesirable distinct yellow colour on the dried fish.
C) The risk of product loss is so great in summer months that
no one ever hangs the fish outdoors between May-September
(with the exception of Finnmark region of Norway where fish can be hung to dry as late as June); hangin9 again starts "in
September. In fact, in Iceland the banks refuse to finance
fish which is hung outdoors to dry in summer. The banks' position is based on the poor Icelandic experience in 1981. That year, Icelanders produced some stockfish by hanging the
fish outdoors in summer. The product was infested with fly eggs despite the use of insect repellant (killer) and
the contaminated fish spoiled after being shipped to Nigeria.
D) Another quality problem associated with open air drying is
the blackening of fish surface in the foggy weather.
E) Open air drying takes too long (2-4 months outdoors, followed by additional drying of 1-2 months while piled up
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in warehouses for finish drying before packing) even in the Scandinavian countries. This can tie up significant capital in the work-in-process inventory.
F) The team members also learned that seasonal production of stockfish causes a mis-match of the timing patterns of
supply and demand; the latter usually tends to peak around the December-February period.
G) Drying times necessary for open air drying depend upon the weather and size of fish. For drying to about 24% moisture along North-Western Coast of Norway between October and
April, following drying times were often mentioned.
Small fish 20-40 cm
Medium fish 30-50 cm Large fish 50-60 cm Extra large fish 60+cm
1-1.5 months 2.5 months
3.4 months 5+ months
H) The fish removed from drying fields at about 24% moisture
requires further drying for about 1-2 months in well
ventilated warehouses in order to reduce the moisture
content to about 20% before baling.
I) In the past, stockfish dried outdoors used to be just dumped
in one corner of the warehouse from which it was baled when
it was judged to be dried enough. Now the stockfish is graded by size and quality and stacked in lots on
pallet-like frames (about 4'x4'x5' stacks) to facilitate finish drying and subsequent baling.
J) Temperatures of about 18-20°C (65-70°F) are~ maintained in
the warehouses. Humidity has to be less than 60%. This
requires very good ventilation through the stacks of
stockfish as well as the warehouse space if build-up of relative humidity is to be avoided. The plants visited made
widespread use of fans and blowers.
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K) While the finish dryin.g in warehouse requires about 1-2
months, the product may have to be held in the warehouse for
an additional period of time for other business reasons. For example, the processor may be waiting to fill an order,.
or may wish to avoid shipping and storing the product during the summer months lest the open air dried stockfish may spoil in hot and humid weather in the importing country (e.g. Nigeria).
L) Labour costs of open air drying have been variously estimated.
i) one processor estimated the labour cost of washing, cleaning and hanging the fish outdoors to dry at NKr
0.70/kg of wet fish (headless and gutted)
ii) another processor estimated the labour costs per kg of
wet fish as follows:
Heading, gutting, washing, Taking down from racks
Packing
Tota 1 1 ab our
hanging NKr 0.4/kg 0.1
0.3
NKr 0.80/kg of wet fish
iii) Another processor estimated the labour cost of washing,
hanging and taking it down at 0.8 NKr/kg of wet fish starting from headless and gutted fish, or 1.2 NKr/kg
of wet fish starting from round fish. The latter includes the cost of heading and gutting as well.
Since the first and the third estimates do not include packing (estimated at 0.3 NKr/kg of headed and gutted wet
fish), the average labour cost for stockfish production is
about NKr 0.97/kg of headed and gutted wet fish. This
average corresponds to a labour cost of about NKr 4.00/kg
(about C$0.39/lb) of stockfish2.
2 Yield of stockfish, 24% of headed and gutted wet fish.
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An earlier study by Norwegian Government3 hatd estimated that about 3 minutes of labour is required to produce a kg of
stockfish. By this standard, total labour cost (including benefits) is likely to be about NKr 2.80/kg (about
C$0.27/lb) of stockfish. This cost is more in line with the estimates (i) and (ii) given above.
M) It could not be acertained what percentage of fish is lost
due to natural causes, e.g. eaten by birds, blown away by
wind, contaminated by bird droppings, infested by flies, washed away by rain, etc. The reason was that most people
we talked to perceived the losses differently. Those who perceived it as product degradation estimated the losses at about 1-2% and also seemed anxious to avoid hanging fish
outdoors during periods prone to fly infestation.
Bruce Chapman visited some processors in Northern Norway and observed the on-site sorting of one lot of production. He
estimated that about 20% of the product was discarded since it was unfit for human consumption.
N) Members did not notice any special devices used for
determining the extent to which the fish hung in the open air had dried. We were told that the decision to bring the
fish indoors (for further drying) is, for the most part, made subjectively by looking at the fish, by how it feels to
touch, and by how much it resists being bent. When in doubt, however, the processors send samples to a laboratory
to have the moisture content determined.
3 SOLA, E. 1970. "Technical/Economic Analysis of the Dried Fish (Stockfish) Industry." Directorate of Fisheries Chemical/Technical Research Institute, Bergen, Norway. CTFAS No. 4760.
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4.5 Mechanical Drying of Stockfish
A) The mission found that despite relatively better weather
conditions in Norway, Sweden and Iceland, producers in these
countries had started experimenting with mechanical drying some 2-5 years ago.
By 1982, at least 3 specially designed mechanical dryers were in use in Norway, 1 in Sweden, and 1 in the Faroe
Islands, with a total production capacity of 2-3 000 tonnes product weight per year (corresponding to about 5-10% of the Norwegian production). These drying plants utilize ordinary or conventional heat pumps.
B) Members visited two mechanical drying installations in Norway, had discussions with a large stockfish processor/exporter in Sweden who operates a mechanical drying facility in the Faroe Islands, and met with
designers/engineers of three equipment manufacturers. These consultations (see details in Appendix IV) have revealed some significant facts, e.g.:
i) Producers now using mechanical drying seem quite
satisfied with the product quality.
ii) The members examined samples shown by an equipment
manufacturer of mechanically dried stockfish that dried (without spoilage) in the open air. One couldn 1 t
really tell the difference in colour, though the smell of open air dried was more pronounced. The Nigerians have not complained about the taste of mechanically
dried stockfish although the Norwegians consider this
product is rather bland compared to fish dried in the
open air. The Nigerians have, however, complained at
times that the mechanically dried stockfish has a darker colour (it is not bleached as much as the fish
which is dried outdoors and exposed to the elements).
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This objection is not heard, however, when market conditions are good.
iii) Producers and the equipment manufacturE~rs maintained that enough savings can be made in labour, material and inventory carrying costs to make the mechanical drying
worthwhile.
iv) The Swedish processor asserted that they need stockfish
of consistently high quality for reprocessing, and that mechanical drying can satisfy this requirement.
v) Producers who have invested in mechanical drying facilities also emphasized that mechanical drying can
help them overcome problems of seasonal production and improve the cash flow (and profitability) of stockfish
operations. Those who have not yet made the investment
seemed somewhat concerned about the market's acceptance
of mechanically dried products.
iv) One stockfish producer emphasized that when hanging the
fish in open air stops in June, the price of raw
material also drops. Therefore, drying stockfish in summer will help improve profits; this, however, necessitates mechanical drying.
D) Most producers and equipment manufacturers also see a m.ajor role for mechanical drying as a way to reduce the marketing
risks, in view of much shorter drying time. They expect a substantial increase in mechanical drying activity over the
next 2-5 years.
E) One large Norwegian stockfish producer/exporter (Oddvin
Bjorge A/S, Ellingsoy), who was quite open and showed us his
modern stockfish dryer as well as open air drying equipment, felt so confident about the future of mechanical drying of
stockfish that he is planning a second mechanical stockfish
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drying facility in Norway. It is reported that he has also
established a mechanical stockfish drying facility for
Alaskan pollack in the State of Washington, and is planning six dryers for drying local species of fish in Nigeria.
F) The following features were noted for the tvm mechanical
drying installations that were visited. Both installations
operate on the principle of ordinary heat pump in that they
require auxiliary heat exchanger(s) for rejecting the excess condenser heat.
i) Oddvin Bjorge A/S, Ellingsoy, Norway
This is a recently installed mechanical dryer. The
firm has used it to dry small (up to 0.5 kg) headed and gutted saithe and cusk from the wet state. This summer
(1982) they intencl to use it to dry cod stockfish.
Loading capacity and drying cycle
The dryer holds 80 trolleys, each of which can be
loaded with 500 kg of wet fish, for a total
capacity of 40 tonnes. It takes about 2 weeks (16
days) to complete the drying of up to 0.5 kg
headed and gutted wet fish as "round" stockfish.
The drying cycle in this installation starts with
a temperature of about 0°C and is raised to l0°C by the end of first week and to 20°C by the end of second week.
All the fish is loaded in a batch .. The flow of
air through the drying tunnel is reversed
every-so-often to help ensure even drying of fish.
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Installed power
The dryer uses a total of about l:~o horsepower or
112 kW (about 80% overall efficiency) of installed power:
2 compressors 40 hp each 3 circ. fans 6.7 hp each
4 fans on auxiliary condenser Tot al
Energy consumption
80 hp.
20 hp. 20 hp.
120 hp. ----------------
On the basis of a 16 day drying cycle, the energy consumption of this dryer is estimated to be about
2 kWhr/lb of stockfish (based on 24% yield).
Cost of the heat pump unit in Norway
About NKr 1 million (C$ 216 000.).
ii) Eric Rolfsen A/S, Kristiansund, Norway
This company installed a continuous mechanical dryer about two years ago to enhance its capability to dry year-round and increase its production. The dryer has
two drying tunnels through which the trolleys loaded with fish move on a mono rail.
The company has used the dryer for stockfish production
in two ways: for complete drying of fish starting from
wet blue whiting and hake and for drying finfish which
has been partly dried in the open air.
- 18 -
When drying wet fish, a temperature of 7-8°C is
maintained for 3-4f days as the fish moves through the
first tunnel. The material then enters the second tunnel where a temperature of about 15-20°C is maintained to complete the drying.
Loading capacity and drying cycle
About 5 tonnes of headed and gutted wet fish (for
"round" stockfish production) is ·1oaded into the
first tunnel every alternate day. A total of about 10-15 days are required to complete the
drying of up to 0.5 kg headed and gutted wet fish.
Installed power
The dryer uses a total of 124 kW of installed
power.
Compressors unit 2 Pumps 5.5 KW each
Fans (estimated) Total
Energy consumption
97 kW 11 kW
16 kW 124 kW ======;:
On the basis of loading 5 tonnes of wet fish every
alternate day, the energy consumption of this
dryer is estimated to be about 2.25 kWhr/lb of stockfish (based on 24% yield).
G) Members visited three equipment manufacturers. Features of
the drying equipment manufactured by them are briefly
described below. The drying equipment offered by these firms operate on the principle of an ordinary heat pump and
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as such require auxiliary heat exchanger(s) for rejecting the excess condenser heat.
i) Alfsen og Gunderson Als, Oslo, Norway
This firm has designed and supplied several (ordinary)
heat pump equippedi dryers for fish drying. The one it has supplied to SVENSKA STOCKFISH A/B of Stromstad, Sweden is used for mechanical drying of stockfish from the start to finish.
The members were eager to see the SVENSKA plant in
operation, but were not ab le to as the company was very reluctant to show their facilities to prospective
competitors from Canada.
Loading capacity and drying cycle
The stockfish drying plant designed by Alfsen og
Gunderson operates in a continuous manner with the
trolleys loaded with wet fish entering at one end
and leaving at the other end 11 days 1 ater with
fully dried fish. Each trolley can hold up to 500 kg of headed and gutted fish (1 kg or less per fish).
The largest drying tunnel (7 x 22 size) can hold 22 rows of 7 trolleys each at any one time. This
tunnel therefore has a loading capacity of 77 tonnes (equivalent weight) of wet fish.
A set of 14 trolleys, loaded with some 7 tonnes of
wet fish are wheeled-in each day as a
corresponding number of trolleys carrying about
1.68 tonnes of stockfish (24% yield) are wheeled-out.
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Installed power
It is estimated that the a 7 x 22 size tunnel uses a total of 291 kW of installed power:
2 Compressors 220 kW 6 Circulating pumps 22.5 kW
4 Circulating fans Aux i1 i ary fans
Total
Energy consumption
30 kW 18.75 kW
291.:25 kW =====;======
On the basis of a production rate of 1.68 tonnes of stockfish per day, the energy consumption of the Alfsen/Gunderson dryer is estimated to be
about 1.89 kWhr/lb of stockfish.
Cost of the heat pump unit in Norway
About NKr 2 million (C$ 432 000) in 1981, for a plant of 7 tonnes/day loading capacity FOB plant
in Norway. The cost does not include the drying tunnel, trolleys, etc.
Cost of heat pump unit for a drying installation
of about one-half the size (3.5 tonnes wet fish/day) estimated at about NKr 1.5 million
(C$ 324 000), and that of about one-quarter the size (1.75 tonnes wet fish/day) at about NKr 1
million (C$ 216 000).
ii) Kvaerner Kulde A/S, Sandvika, Norway
This firm designs and manufacturers industrial and
marine refrigeration equipment. It was cooperating
with Alfsen og Gunderson as suppliers of compressors,
- 21 -
etc. but recently has severed this relationship and is now trying to develop heat pump equipp~~d dryers of the
same general design and features as those manufactured by Alfsen og Gunderson (i.e. operating on the principle of an ordinary heat pump).
Loading capacity and drying cycle
Kvaerner Kulde drying equipment also operates
continuously much like the Alfsen og Gunderson's equipment, w"ith a loading capacity of about 3 200 kg/day.
Drying temperatures of about lO-l6°C are
maintained with relative humidity of 43% at the wet end and 60% at the dry end. A drying rate of 100-150 litres/hour is claimed.
Drying times for stockfish were stated to be about
2-3 weeks for a 2 kg headed and gutted wet fish in the "round" and about 7-10 days in the "split" form.
Installed power
The team members were told that the Kvaerner Kulde drying plant (3200 kg of wet fish/day) uses a total of 88 KW of installed power:
2 Compressors Circulation fans Aux i 1 i ary fans
Total
70 kW 12 kW
6 kW 88 kW
-----~-------·--
- 22 -
Energy consumption
Members were told that the energy consumption of Kvaerner Kulde dryer was about 1.5-3.5 kWhr per kg of fish dried to 21% moisture. For fish dried to 16-17% moisture the energy requirement would
likely be about the same as (if not more than) the Alfsen og Gunderson system (about 1.89 kWhr/lb or 4.17 kWhr/kg of stockfish).
Cost of the heat pump unit
The cost is about C$ 100 000 (for the direct
expansion type equipment with semi-hermatic
compressors) FOB plant in Norway, not including the costs of the drying tunnel, trolleys, etc.
The indirect expansion type equipment would cost more.
iii) Traust hf, Reykjavik, Iceland
This firm manufactures an assortment of fish
systems. The firm seems very keen and sees future for mechanical drying of stockfish.
an (ordinary) heat pump equipped dryer that
processing
a good It offers
appears to be a smaller version of the Aflsen og Gunderson equipment.
Loading capacity and drying schedule
The tunnel for which Traust's heat pump is
suitable holds 6 trolleys across the width (6.5 m)
and 20 trolleys along the length. Each trolley
can hold 500 kg of headed and gutted wet fish.
The tunnel thus has a holding capacity of about 120 trolleys (60 tonnes equivalent of wet fish).
- 23 -
Although the manufactures claim the tunnel can be loaded with 10 tonnes of fish/dayi, it seems
unlikely because for a drying time of even 10 days, no more than 2 widths ( 12 tro 11 eys or 6
tonnes) of fish can be loaded each day with a production of 1.44 tonnes of stockfish each day.
A 12-day drying cycle will reduce the average
production to 1.2 tonnes of stockfish/day (24% yield).
Installed power
The heat pump equipment for a 6-tonnes/day wet fish loading capacity tunnel (6 x 20 size dryer)
uses a total of about 205 kW installed power: 2 Compressors (100 and 80 HP each) 168.0 kW
Circulating fan 18.5 kW
2 Circul at iing pumps
Auxiliary fans (estimated)
Energy consumption
Total
7.0 kW
11.5 kW 205 kW
-----------------
On the basis of a production rate of 1.2
tonnes/day on a continuous basis, the energy
consumption is estimated to be about 1.86 KWhr/lb stockfish, the same as for the A lfsen/Gunderson system.
Cost of the heat pump unit
The cost is about US$295 000 (C$375 000) FOB
Norway. The quoted price does not include the
tunnel, trolleys, etc. The price is of the same order as for the Alfsen/Gunderson system.
- 24 -
4.6 Products, Markets and Marketing of Stockfish
A) The team members found that diversified production ·
capability and a 11 bid-and-ask 11 system to set fish prices,
allows for theallocation of fish consistent with "best use" in terms of market demand and economic efficiency.
B) All grading, sorting and even loading and shipping of
stockfish products is monitored by certified graders in Norway and Iceland.
In Iceland, the stockfish is graded by quality and size:
Grading by Qualitt
Grades for Nigeria in decreasing order of quality are -
- ASTRA (high price)
- STELLA (medium price) - POLAR (low price)
Grades for Italy in decreasing order of quality are -
- PRIMA
- SAGA - EDDA
Grading by Size Stockfish in each Quality Grade is further graded
by size (lengh in cm) -
20/40
20/50
30/50
40/60
50/70
70/up
In any quality grade
1 owe st price
highest price
- 25 -
The team members were told that the price of stockfish destined for the Nigerian and other African markets is often
determined by the species and not by the quality or·size. For example, the price for cod and cusk was US$ 287/bale C&F and US$ 225/bale C&F for ling and haddock.
In Norway, the various grades of stock fish by quality are:
For the Italian market
-Primafisk (Prime quality)
-Sekundafisk (Second quality) -Afikafisk (Africa quality)
-Vrak (Offal grade)
For the Nigerian market -Afrikafisk (African quality -Vrak (Offal grade)
There are three prices ranging from US$ 169 to $ 189/bale
C&F for cod, pollack and mixed. A document from the Central Bank of Nigeria indicates that the price for offal grade is about US$ 77/30 kg bale.
C) In Norway and Ice 1 and, the stockfi sh producers and exporters
usually belong to associations which arrange export sales on behalf of members for a nominal fee (about 0.75% of sales). There is also a Stockfi1sh Export Committee (an advisory committee of the Department of Fisheries) which issues
export licences to ensure orderly marketing. Although the
Export Association will arrange export sales, members may,
with the Association's approval, sell directly and pay a commission to the Association.
D) Members were told that to produce Italian quality stockfish, the fish must not have been killed while in nets (long-lined fish is preferred), must be properly bled, and must not
- 26 -
freeze during the course of drying. The dried product must not smell or taste sour. Italy seems to prefer Lofoten cod
which is more slender than the cod found in Canadiari waters.
E) Some 1 000 tonnes of high quality split stockfish is
reprocessed into 11 Lutefisk 11 for Scandinavian and other
ethnic markets. A Swedish processor making 11 Lutefisk 11
asserted that they need stockfish of consistently high
quality that only mechanical drying can provide.
F) Iceland has a substantial production (about 7 000 tonnes) of dried cod heads for Nigerian market, with the raw material
coming from the filleting operation of freezing plants.
G) Members also saw a new shelf-stable dog food made by chopping stockfish into small pieces which are frozen to
kill off any infestation prior to packaging in retail size (300 gram) packs (cartons or bags). A NorwE~gian processor
is wholesaling this product at about Nkr. 50.00/kg (US $8.25/kg) in the Scandinavian market (compared with about US $6.38/kg C&F for stockfish exported to Nigeria).
The dogs are said to love it. The housewife may like a less
smelly product made from mechanically dried stockfish. Canada could easily develop the domestic and U.S. market for such a product.
H) The team members were able to confirm that profit margins are highest in stockfish production followed by saltfish and
freezing operations, respectively. Margins in stockfish operations, however, are also declining due to the
cost-price squeeze. Some data on production costs in Norway have been reported in subsections 4.2 and 4.4.
I) Some producers as well as equipment manufacturers view
mechanical drying as a means of reducing production costs, reducing marketing risks, and enhancing profits.
-27-
J) Producers and others knowledgeable about the trade felt that
the buyers in Nigeria have to be "well connected" to obtain import licences. It was generally felt that present
difficulties in the Nigerian market are temporary. Oil
produciton is on the rise in Nigeria. New stockfish import licences are expected to be issued soon with the bulk perhaps going to the Nigeria National Supply Company.
K) The Director of The Icelandic Union of Stockfish Producers
(Mr. Bragi Eiriksson) and Chairman of The Norwegian
Stockfish Export Committee (Mr. Holst-Dyrnes), both felt that there is an immense untapped market potential for
stockfish in the Northern part of Nigeria (Moslem population). The stockfish to date has only been consumed by Southern population around Aba.
L) Asked if there is room for a cooprative marketing effort
among Iceland, Norway and Canada, the sentiment in Norway
(Mr. Holst-Dyrnes) was positive, but in Iceland the spokesman (Mr. Eiriksson) felt that such a move would not be
welcomed by Nigerian government.
M) Mr. Eiriksson (Iceland) confirmed the rumours that Iceland had gained market share partly as a result of their support
(through food aid) of the Lagos regime during the civil
war. (Norway's aid went to Biafra).
N) It appears that Mr. Eiriksson is personal"ly not in favour of
mechanical drying as he stated that his v·iews are not shared
by some stockfish producers in Iceland.
- 28 -
5. RELEVANCE OF FINDINGS TO CANADA
The Mission has identified some areas of relative strengths and
weaknesses of Scandinavian countries vis-a-vis Canada. Their strength lies in a more ideal weather for open air drying and in the expertise
with which they are pursuing other methods for stockfish production.
Norway and Sweden seem to have taken an early lead in developing their mechanical drying capability to overcome problems of seasonality, reduce marketing risks and to enhance profitability. Their weakness
relative to Canada is on the resource side which some producers are
trying to overcome by setting up joint venture mechanical drying
facilities in the USA (Washington State). One major producer is also joint-venturing mechanical drying facilities in Nigeria for drying
fish found in local waters. The latter move has been seen as a way to
increase the access of Nigerians to dried fish and attune them to mechanically dried stockfish.
In view of these findings, it would appear that the Canadian industry needs to adapt appropriate technology to take full advantage of
stockfish production opportunities. Development of economical year-round drying capability in Canada seems to offer an essential
marketing edge to achieve significant penetration of stockfish
markets. It is also necessary to develop suitable marketing planning and market access strategies along with a production capability which
are responsive to changing market conditions.
>< ........ C
l z:
w
0... 0... c:(
- :29 -
APPENDIX I
LIST OF MISSION MEMBERS
Dr. Chand Passey, P. Eng. Senior Marketing Planning Advisor Marketing Directorate Department of Fisheries and Oceans Ottawa, Ontario, Canada KlA OE6 Tel. (613) 995-2177
Mr. W.D. (Wally) McDougall, P. Eng. A/Director, Fisheries Development Scotia-Fundy Region Department of Fisheries and Oceans Halifax, Nova Scotia, Canada Tel. (902) 426-8111
Mr. Bruce Chapman Director, Industrial Operations Fisheries Council of Canada 77 Metclafe Street, Suite 603 Ottawa, Ontario, Canada KlP 5L6 Tel. (613) 238-7751
Mr. Philip West Manager, Resource Development St. Anthony Plant Fisheries Products St. Anthony, Newfoundland, Canada Tel. (709) 454-8804
- 30 -
APPENDIX II
GENERAL APPROACH
The approach and strategy to be followed was finalized by the mission members when they met in Bergen, Norway on June 13th. It was generally
agreed that the team members should:
a) Bear in mind the strategic importance of this mission to the future
development of a viable stockfish industry in Canada.
b) Direct the efforts during interviews to gain an insight into
identifying the strengths and weaknesses of the stockfish production
and marketing approaches and systems in Scandinavian countries with a
view to identifying how Canada can secure, and mainta'in over the long-term, a distinct marketing edge over the competition.
c) Look at things from a broad longer term Canadian perspective relevant to strengthening Canadian fisheries rather than that of an interest group. Avoidance of contradiction and controversy in the presence of
third parties is therefore important.
d) Meet at the end of each day to discuss and summarize major findings,
and to plan for the activities of the following day.
e) The Mission members will also meet before the group breaks up for
return to Canda to finalize the main findings.
f) The Mission Report, representing a consensus of opinion, would be
prepared by the Marketing Directorate.
- 31 -
APPENDIX III
ITINERARY
June 13, 1982 (Sunday) BERGEN
1. All members arrived in Hotel Norge by 18:00 Hr. Tel: (05)233000
2. 19:00-22:00 Mission members met in Hotel NORGE to discuss the
program, main thrust of the mission, confirm objectives,
and develop needed strategy for achieving the objectives.
June 14, 1982 (Monday) BERGEN/AALESUND
1. 07:50 Dep. Bergen BU271 08:25 Arr. Aalesund
2. Bus/Ferry to town of Aalesund.
Met at Ferry terminal by Mr. I. Holst-Dyrnes.
checked-in Hotel Scandinavie Tel: (071) 23131
3. 10:30-12:00 Meeting with
Mr. I. Holst-Dyrnes, A/S Bringsvor Kongensgate 25 Aalesund. Tel: {071) 21324
4. 13:00-22:00 Meetings with M/S Oddvin and Oddvar Bjorge and tour of their stockfish drying facilities in Ellingsoy and
Hjelmeset
Mr. Oddvar Bjorge Oddvin Bjorge A/S 6075 Ellingsoy Tel: (071) 36086
- 32 -
June 15, 1982 {Tuesday) KRISTIANSUND
1. 08:25 Dep. Aalesund BU271 09:40 Arr. Kristiansund.
Checked-in Grand Hotel Tel: (073) 73011
2. 10:30-14:00 Meeting and tour of stockfish drying and dog food
production facilities with
Mr. Eric Rolfsen Erik Rolfsen A/S Garveri gaten 6, Kristi ansund N. Tel: {073) 71033
3. Meeting and discussion among members
June 16, 1982 {Wednesday) OSLO/GOTHENBURG
1. 09:00 Dep. Kristiansund BU170
Arr. Oslo
2. 10:00
3. 11: 00
4. 13:00
Meeting with Mr. B.G.R. (Bob) Barton
TCS, Canadian Embassy
Meeting with Mr. Fossdal and other managers of
Alfsen & Gundersen A/S Stalverks veien 1 Os 1 o 6 Te 1: ( 02) 68 19 00
Meeting with Mr. Jens Werenskiod and plant tour of
Kvaerner Kulde A/S Jongsas veien 4 1300 Sandvi ka Tel: (02) 54 49 60
(20 minute drive from Oslo)
- 33 -
5. 16:40 Dep. Oslo SK477 17:15 Arr. Gothenburg, Sweden 18:30 Arr. Hotel Partille
6. Meeting and discussion among members.
June 17, 1982 (Thursday) GOTHENBURG/REYKJAVIK
1. 08:00
2. 15:10 16:00
18:00
Meeting with Mr. Sigurd Wallstrom and tour of the herring
processing and Lutefisk processing facilities of
Franz Witte & Co. Exp AB Manuf akturgatan 2 S-401 22 Gothenburg Tel: (031) 513250
Dep. Gothenburg FI227
Arr. Keflavik airport, Iceland Arr. Reykjavik
3. 19 :00-22 :00 Members 1 meeting to summarize findings and their relevance to date.
June 18, 1982 (Friday) REYKJAVIK
1. 09:00
2. 13:15
3. 16:45
Discussion with Mr. Trausti Eiriksson, General Manager, and
his associate Mr. Sigurlinnason of Traust Ltd., producers of stockfish baling and other machines. Mr. Eiriksson took
the members through his plant and also a stockfish production facility.
Discussions with Mr. Bragi Eiriksson, General Manager of
the Union of Stockfish Producers.
Departure flight FI456 to London (Heathrow) (Dr. Passey and
Mr. McDoug a 11).
June 20, 1982 (Sunday)
17:00 Departure flight FI454 to London (Heathrow) (Mr. Chapman and Mr_ West)_
- 34 -
APPENDIX IV
BACKGROUND OF PERSONS/FIRMS VISITED
1. Mr. I. Holst-Dyrnes, Aalesund, Norway
Mr. I. Holst-Dyrnes is Chairman of the Norwegian Export Committee for
Stockfish. He is also Managing Director, A/S Bringsvor, Aalesund, a
member firm of the above association.
The export committee is an advisory body to the Ministry of Fisheries regarding stockfish and related matters. It negotiates prices with Nigerian government, also sets minimum prices to both Nigeria and Italy. Licenses for export of stockfish must be obtained from
committee.
2. ODDVIN BJORGE A/S, ELLINGSOY, NORWAY
Oddvin Bjorge, President Oddvar Bjorge, Manager
Oddvin Bjorge A/S is a large company processing both salted fish and
stockfish. This firm appears to be very keen in utilizing mechanical dryers for stockfish but its present production comes mainly from outdoor drying. Some quantities of stockfish were still hanging outdoors on racks when members v·isited their Hjelmeset plant (June
14th).
This firm has an ordinary heat pump dryer (recently installed) which has been utilized for drying salted fish and small stockfish other
than cod ( sey and tusk) from the wet state. They i ntiend to dry cod
from the wet state this summer.
The firm is also interested in the supply of dryers to Nigeria. The
matter was still somewhat controversial with other stockfish producers
at the time of the visit.
- 35 -
3. ERIC ROLFSEN A/S, KRISTIANSUND
Eric Rolfsen, Director
This firm was established in 1899 and is a major producer of
stockfish, saltfish, and "stockfish dog food 11• An ordinary heat pump
equipped mechanical dryer was installed by this firm about 2 years
ago. It has since used the dryer in two ways: to dr.Y stockfish 'from
the wet state, and to finish dry the fish partially dried by hanging in open air.
Eric Rolfsen A/S produced about 60,000 bales for Nigeria in 1981.
The firm also produces a dog food utilizing cut chunks of dried
stockfish packaged in laminated bags (300 g.) principally for the Scandinavian market.
Cod is the principal species used for stockfish but tusk, sey
(pollock), haddock and ling also used. Ling used principally for Sweden, U.S.A., and Cameroon.
4. ALFSEN OG GUNDERSON A/S, OSLO, NORWAY
Mr. Helge Lindheim
Mr. Arne Jovik Mr. Sverre Fossdal
Mr. Harald Gunderson (absent)
This firm designed and supplied an ordinary heat pump dryer for SVENSKA STOCKFISH AB, STROMSTAD, Sweden. The people interviewed were
very helpful and very knowledgeable with respect to mechanical drying of stockfi sh.
The team members were told that the SVENSKA plant is drying stockfisn
in the mechanical dryer from wet to finished product in one drying stage.
- :36 -
The drying time is about 10 days for wet fish up to 1 kg size, at drying temperatures of about l0°C.
The dryer has a capacity of 10 tons of wet raw material/24 hours --2
tunnels. Energy consumption is 2.4 Kw. hrs./kg. dry fish. The fish is hung vertically on aluminum trolleys with space for 4 to 6 hanging
racks depending on the size of the fish. The trolleys are moved through the tunnel mechanically. The dryer can also be used for
salted fish. This firm appears to be very aggressive and reputable and will likely be looking to Canada for potential sales of heat pump
dryers for both stockfish and salted fish.
The firm is presently installing a peat moss drying plant in Shippegan, N.B.
5. KVAERNER KULDE A/S, OSLO, NORWAY
Mr. Jens Erik Werenskiold
This firm designs and manufactures industrial and marine refrigeration
machinery. The firm has experience in designing and manufacturing R.S.W. and other refrigeration systems for fishing vessels.
KVAERNER was cooperating with Alfsen Gunderson in the initial work on
heat pump dryers but that relationship has been severed and each company is now operating independently.
The firm has supplied 9 (?) ordinary heat pump equipped dryers
principally for salted fish.
6. FRANZ WITTE & CO. EXP. AB, Gothenburg, Sweden
Mr. Sigurd Wallstrom
Franz Witte appears to be mainly an export company and is a subsidiary of Volvo and part of a very large corporate conglomerate, including
- 37 -
the petroleum industry. This firm is likely in a position to provide and obtain Nigerian contacts for exporting stockfish to Nigeria.
Stockfish is a new market for Witte and its own stockfish exports to
Nigeria have been very limited up to this time.
The Gothenburg plant facility is used by Witte for the production of
lutfisken ("Lutefisk"), a special product primarily for the Swedish market with some export to Finland. This is a very high priced quality product prepared by treating ling dried in the split form with a solution of caustic (baking soda?) and calcium. As a result the stockfish swells to about 6-7 times its dry weight. Lutefisk is
very light in color, and is packaged for sale as a fresh as well as a frozen product. The lutefisk product per ~would have very
limited,if any, potential for exports from Canada.
(Franz Witte has been associated with T.H. Fisheries Limited, Cox's Cove, Newfoundland.)
The firm also has a salted fish operation in France, contacts and a
mechanical dryer for stockfish in the Faroe Islands, and is about to start in Iceland.
7. TRAUST HF REYKJAVIK, ICELAND
Mr. Trausti Eiriksson, Manager
Mr. Sigurlinni Sigurlinnason, Sales Manager
This is a young enterprising firm specializing in the design and manufacture of fish processing equipment such as:
head cutting machines
equipment for automatiic salting of fish
freezing tunnels
container systems automatic stockfish baling machines
capelin roe extraction plants
- 38 -
shrimp roe processing equipment
salmon roe processing equipment
gutting machine for blue whiting bait cutting machine (prototype)
The firm has supplied the follow'ing number of automat"ic stockfish baling machines:
Iceland 30 Norway 2
Seattle (Alaska) 1 Sweden 1
The firm appears to be associated with SOTRA MASKIN A/S of BERGEN,
NORWAY, who in turn appear to have some involvement with the SVENSKA STOCKFISH dryer in STROMSTAD, Sweden.
TRAUST is very keen on the application of heat pump dryers for drying
stockfish. They had a part film of the SVENSKA stockfish dryer operation as mentioned by SOTRA MASKIN during our visit to Bergen.
The film showed frozen blocks being thawed, heading fish, washing and tying fish, hanging fish on trolleys, and moving trolleys to
dryers and dried stockfish to baling machine.
There are 5 traditional mechanical dryers in Iceland used mainly for production of cod heads, whiting, and capelin.
8. UNION OF STOCKFISH PRODUCERS REYKJAVIK, ICELAND
Mr. Bragi Eiriksson, Director
(Also represents Consul of Greece)
Mr. Eiriksson is very knowledgeable on stockfish and has visited
Nigeria many times and has a wealth of experience in the stockfish
markets.
Vl
1-
z lJ..J ::E ::c u c
:( I-~
Section 1.
- 39 -
LAWS OF THE UNION OF STOCKFISH PRODUCERS4
(Union of Stockfish Producers, Iceland)
The Association is named the Union of Stockfish Producers [Samlag
skreioarframleioenda] (abbreviated S .. S.F., in English Union of Stockfish
Producers). Its domicile and venue are in Reykjavik.
Section 2.
The aim of the Union is to sell the stockfish products of the members
of the Union under the most favourable conditions and to work towards a
guaranteed commerce among the members of the Union.
Section 3.
Members can be both individual and institutional (a limited company,
co-operative society and mutual society, shipowners• society of a
municipality of township and so forth), and the relevant party may give
advice about stockfish, the negotiation of the sales of which falls to the
Union.
Section 4.
Anyone who wishes to be admitted to the Union shall send its
directorate [stjorn] a written application concerning that. The
directorate makes decisions about applications but the member, unless the
condition in section 3 is satisfied, will not be a member in full standing.
Section 5.
Without the assent of the di rector ate of the Uni on, members of the
Union are not permitted to sell to other parties stockfish intended for
export and which have undergone some preparation. The members of the Union
are obliged to supply the directorate of the Union with information about
the quantity, quality and curing of their stockfish whenever this is
4Translated from the most recent document
- 40 -
requested. Anyone neglecting to give such information at the stipulated
time has no claim to equal value, in accordance with Section 3, for the
stockfish for which no information was furnished. Anyone who knowingly gives incorrect or misleading information will be assessed a fine in
accordance with Section 17. If it seems to the directorat12 of the Union, that measures about the curing of stockfish of Union members must be taken
urgently in order to ensure the best utilization of the various markets, the members of the Union will rely on its instructions in that matter and also will not be penalized for it.
Section 6.
The pricing period shall be settled by the Union meeting or by the directorate of the Union, and the amount of produce of each shall be
determined by the quanitity of stockfish the members of the Union put up in that period. Each pricing period shall be fixed individually. All stockfish produced during the same pricing period from the same species and of equivalent quality, according to legally established export assessments,
must fetch the same price. There can be no price equalization between species. In addition to the various species of fish, species is considered as an established grade, e.g. Africa stockfish sold to Africa, Itlay
stockfish to Italy, etc.
Section 7.
Each member of the Union will have full responsibility before the
Union for the stockfish which he delivers for sale or he will be obliged to pay reparations to the customer because of defective goods, delay in
delivery or any other unrelated defect; but he has the right of a second claim on a participating member of the Union. Should it be a participant
in a second unforeseen loss, no sum will be paid to the individual members
and each member will bear responsibility for it in direct proportion to the
amount of stockfish he has delivered to the Union for sale.
- 41 -
Section 8.
The value of each stockfish consignment will be paid to each member of the Union as quickly as possible on receipt of payment fom the buyer. The
Union, nevertheless, shall always retain a portion of the purchase money
for the equalization of prices later and also in order to support the
business expenses of the Union, all in accordance with more precise rules
which the directorate of the Union will promulgate; and no more shall be
retained than is estimated necessary at any time. If difficulties in the
Union over sales, export, compensation or other matters ca:use some members of the Union not to dispose of their production for a long time and/or await payment longer than others, the directorate is empo~'ered to balance such a disparity with an increased account at the end of the pricing period. Without the agreement of the lawful general meeting, more than 10%
of the free-on-board [F.O.B.] value of the stockfish sold cannot be kept back for the full provision of this section.
Section 9.
A special fund, to be named the Exraordinary Fund [SE!reignasjoour] is
to be established. The annual members' payment to that fund will be .25% of the free-on-board value of the stockfish which the Union sells on its members' behalf. One percent of this is retained by the Union and applied to the member's debts in commercial accounts. The Extraordinary Fund
constitutes a credit of Union members to their Union: the money can be invested in Union management, market surveys and other arrangements as the
directorate stipulates. Increases to the Extraordinary Fund shal 1 be determined by the directorate of the Union. Increases must be credited
annually to the Extraordinary Fund accounts of the Union members. Three years after leaving the Union or at iits dissolution, the Extraordinary Fund
wi 11 be deposited to members. The same applies, if a member ceases stockfish processing and three years pass after his last embarcation. The
directorate of the Union is, however,, empowered to repay the balance from the Extraordinary Fund, if in their judgement particular grounds recommend
it.
- 42 -
Section 10.
A general meeting [aoalfundur] shall be held no later than in ·November
each year, and an additional meeting may be held when the directorate of
the Union deems it necessary or at least a quarter of the total number of voters or a quarter of the members of the Union (the number of persons)
desire it. Meetings must be announced with at least 14 days' notice in newspapers and over the air. The agenda wi 11 always be recorded according to the order of the meeting. All legal members of the Union shall participate in these meetings, or their representatives, together with the
directorate, managing director and auditors. The general meeting has paramount power over union concerns. It chooses the directorate and the
auditor of the Union, makes financial decisions and takes other decisions that concern the Union. The meetings are 1 awful when delegates with a
plurality of the votes (either they themselves or their deputies) meet. A plurality of votes, except where the regulations specify another condition,
determines the result of business at the meetings.
Sect ion 11.
Each member of the Union has one vote for every five tons (export
weight) of exported stockfish of the production during the year in which
the general meeting occurs. No member of the Union shall have less than one vote if he has an unprocessed catch with the Union. No member of the
Union may have a greater number of votes for himself or others than 20% of that volume of votes which has the right to have a delegate voting at the
Union meeting, when the limits are determined according to this section. If there is a fall in the sales or accounts on the part of the stockfish
processed earlier than that of the most recent year, the stockfish owners can vote there finally even though they may not have any stockfish in the
next year.
Section 12.
The directorate of the Union will appoint eight principals and eight deputies. They will be selected at the general meeting each year, i.e.
their term is one year at a time. The deputies shall be announced at the
- 43 -
directors' meeting. The deputies shall be installed in the same order as that in which they were chosen (the First Deputy will take the place of the
First Principal, etc.) The directorate will choose for itself ann~ally a Chairman [formaour], a secretary [ritari], and deputy chairman
[varaformaour] from its membership. The chairman will convene meetings and chair them; they are lawful when a majority of the directorate is present.
A majority of votes determines the result of business, but in the case of a
tied vote, that of the chairman will be the deciding vote. All proceedings
of the meeting will be entered in a Minutes book and signed by all members
of the directorate present. When the directorate wishes, the managing director shall attend meetings of the union directorate and shall sign the Minutes. The directorate supervises the management of the association and
looks after its interests in all matters. It summons union meetings and prepares the order-paper for the meeting, oversees proceedings according to
the approval of the meeting and submits to the general meeting for its approval the Union's revised accounts for the most recent years. The stipend of the directorate for the most recent year is to be stipulated annually at the general meeting.
Section 13.
The directorate will give advice to the managing director, if it seems
necessary in order to conduct the industry and to take care of day-to-day management. It will negotiate his salary and come to agreement about his
duties, terminable on either side with fixed notice. But the directorate can remove the managing director without notice if it deems it necessary in
the interests of the Union. The managing director will not have a seat on the council of principals or that of the deputies. The directorate is
entrusted with the administration of the products of the union members for the collective enterprise of the fish processors, if it believes it has
good grounds for doing so. Then an annual contract will be drawn up, when it can take the initiative in the sale of the products.
Section 14.
All agreements upon which the directorate enters on the Union's behalf
in accordance with these regulations are binding on the entire membership
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of the Union and on each individual member of the Union. A majority of the
directorate (or four directors including the Chairman) is necessary to
settle on the commerce of the Union, but the directorate is allowed to grant an agency of procuration to the managing director or to another
person it considers necessary. The d"irectorate and the managing director are responsible for their deliberations to the general meeting.
Section 15.
Reviews of the Union's accounts shall have two men present: they will be chosen annually by the general meeting and the second will be an authorized auditor. In the same way, two deputy auditors 'f/ill be chosen.
The accountants shall ascertain that the Union's accounts and its books are in agreement, and they shall have access to all the Union's books and
papers throughout its working hours; the directorate and managing director must furnish all information necessary to the management of the business.
Should they [i.e. auditors--translator's note] be apprised of irregularities, they must immediately take steps to remedy it by their
advice, with the directorate and managing director. The auditors are responsible to the general meeting. The general meeting will determine the
auditors' stipend.
Section 16.
The accounts of the Union will follow the calendar ye~ar. The edited
accounts of the Union shall be submitted to the scrutiny of the members of
the Union 14 days before the general meeting. The directorate and managing director shall print or mimeograph the records annually together with the
accounts of the Union and deliver or send them to all members of the Union.
Section 17.
If a member of the Union sells stockfish independently of the Union
without the directorate's assent, there is an amercement amounting to the full sum of 20% of the value of the stockfish sold. Further contraventions
of these regulations entail a fine which the directorate of the Union
- 45 -
determines each time but he may appeal the penalty levied by it at the
9eneral meeting. Amercements and fines go to the Union.
Section 18.
There will be no change to these regulations except ~ the general meeting and if there is a two-thirds majority of the votes according to
Section 11 in favour of the change. Changes in the rules not announced in
the notice of the meeting, however, need in the same fashion the agreement of a 3/4 majority of the votes to take effect.
Section 19. Every member of the Union has the right to announce his resignation
from the Union. He will give the directorate written notice of it before
1, July, and withdraw as of 31, December that year. A member of the Union
is, nonetheless, discharged from his commitments to the Union in matters concerning the production of the year of his withdrawal before the sale of
that year's supplies and the closure of the accounts (compare Sections 6
and 11). The directorate of the Union will send an acknowledgement of his withdrawal.
Section 20.
If participation in the Union is so diminished th~ it is unable to
work, the Union may be disbanded with a simple majority of votes at the '
general meeting. Its property, which the Union shall make known it has, on the payment of the Extraordinary Fund and other commitments, will be
divided between all of those who have been members for a long or short
time, from the foundation of the Union, proportionally according to the amount of the Extraordinary Fund of the members of the Union. On the
disbursement, they shall adapt their payment to the sum of Krone in the
Extraordinary Fund on each occasion, as if it were paid out without
consideration of the devaluation of the Icelandic Kronur. These are now the regu 1 at ions as they were first agreed upon at the
founding meeting of the Union on 26, January, 1952, with changes and
additions approved by the Union's general meetings up to and including the
general meeting in June, 1979.
- 46 -
IT IS NOT ECONOMICAL TO SELL HIGHLY PROCESSED FISH PRODUCTS TODAY5
The quantity of fish dried by hanging in 1981 was the largest in :~o
years. In the district of Raafisklaget, 31.2% of all fish was hung for drying. The 1982 provisional figures show that the percentage wi'Jl be 38.l this year.
The 1981 tot a 1 exports of stockf i sh amounted to about 30 ,000 tons. An increasing share of fish is exported to Nigeria. In 1979, 65% of stockfish was taken to Nigeria, in 1980 70%, and in 1981 80%. Thus, the fishermen of northern Norway have become increasingly dependent on the politic.:i.l and economic situation of Nigeria. Is this a desirable development and what are the reasons for it?
Director Otto James Olsen from the Export Committee for Stockfish: "The industry would like to have more markets. We have had a number of difficulties, one of them being that prime fish, for which Italy ·is the largest market, is produced in insufficient quantities. Our three stockfish grades are "prime", "second rate", and "Africa" (11 prima11
,
11 sekunda 11,
11 Afrika 11). We sell prima fish for Nkr. 55-60.00 per kg, and the
difference between prima and sekunda is Nkr. 2.00. Afrika fish sells for Nkr. 30.00 per kg.
"The reason for the high production of stockfish is that Raafisklaget has set the price for fish for hanging at Nkr. 4.90 per kg and that for fish for filleting at Nkr. 4.50.
"It is not economical to produce frozen fish, while it is economical to produce stockfish. Therefore, freezing plants have increased their stockfish production as well. The regular conventional plants have increased their stockfish production instead of making salted or frozen fish. The resulting production must go to Africa. The economic situation
5Translated from an article in June 18, 1982 edition of 11 FISKARIN 11 (received from the Oslo Post)
- 47 -
in Norway and the fact that the market in Nigeria is good have resulted in this great increase in stockfish production.
"Also, prices must be subsidized to sell frozen fish. In other words,
the more the product is processed, the higher subsidies the government ·has to pay. It is not economical today to sell highly processed fish. 11
Quality costs
"Better raw material results in better quality, and this also means that the fisherman must be paid better for what he delivers, since quality is costly for the fisherman.
"There are limits for the Central European demand for stockfish. We
think that this year, for example, too much prima fish has been produced. 11
The Nigerian market
"We have had a number of difficulties with the Niger'ian market, because it swings up and down. It is very difficult to convert the
production from hang-drying to saltfish and klipfish, but it is possible, although with great problems. As a rule, government subs'idies are needed.
After a decline, the Nigerian market recovers, since the demand for stockfish is high. Nigeria pays well. A producer of stockfish for Nigeria
has no guarantee in advance that the production will be sold, since there is a risk related to Nigeria. Thus, the question is whether we should produce at cost or produce at prof it.
"Nigeria has begun to import stockfish from Iceland as well. Right now, the Nigerians could buy all that is produced by Norway and Iceland.
We hope that the Nigerian market will become more stable. Up to now, this year's exports have been good, but recently new regulations were issued.
At the moment we are undergoing a stoppage of deliveries. However,
licences are going to be issued. We do not know when we can begin to export again."
- 48 -
Poor markets for frozen fish
"If the Norwegian production pattern is to be maintained, frozen fish will have to fetch better prices, which is not likely at present. The
whole world suffers from a surplus of frozen fish. Frozen fish is produced in increasing amounts, because it can be produced in all countries not
depending on the climate. Stock fish is very much more difficult to make."
Quality of stockfish
Fish that has stayed so long in the net that it has drained of blood cannot be used for frozen fish. This fish can be hang-dried, and it could
fetch as good prices as other fish, but it cannot be delivered to Europe. Central Europeans are extremely quality-conscious about stockfish.
This decides, therefore, what will be done with the fish. If a
fisherman has too many implements in the sea, it may influence the quality of the fish delivered.
The Nigerian housewife pays more for stockfish than the American pays
for frozen fish. The latter is subsidized by several Norwegian krone per kg, when she buys frozen fish. Thus, to make exportation of frozen fish
possible, its price has to be devalued. No subsidies are paid for fish used for stockfish. A housewife in a developing country gets no subsidy,
while one in England or the US gets it. The market cannot pay the price of frozen fish. Therefore, the fisherman cannot get the same price he gets
for fish used for stockfish production.
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