Polish salmon smoker, Graal, has eye on salmon-farming

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Vertically integrating could help alleviate challenge of persistently high salmon prices

He has, like other salmon buyers, a hectic program planned for this year’s Brussels tradeshow. Boguslaw Kowalski is chairman of Polish Graal which owns the processor, Koral. Every year, the company buys 15,000 to 20,000 tonnes of salmon. Volume-wise, that places Koral just behind other heavyweight Polish processor players like Morpol, Suempol and Milarex.

“Koral specialises in salmon. We also have hermetically sealed fish. We produce 16 million hermetically sealed cans a month — herring, mackerel, sardines — but also salmon and trout,” he says.

Unspectacular
Kowalski doesn’t hide how challenging recent years of high salmon-prices have been, not just for Graal, but also other processors.

“Continued high salmon prices have done their part so that consumer growth has not been so spectacular. Consumption would have been higher had prices been lower. In my opinion, a salmon price of between EUR 5 and 5.50 would have been acceptable to all players — suppliers, processors, supermarkets and consumers. It’s consumers who, in the end, decide whether they’ll buy the products. We’re just a processor,” he says.

High salmon prices imply that substitutes can appear more attractive to end-customers: “They can choose other fish or other proteins. That’s especially true for countries like Germany or Poland, where meat consumption is decidedly higher than fish. People understand that they have to have healthy food like fish. But, prices restrict greater consumption of fish. When the salmon-price went very high last year, consumption fell 10 to 25 percent in several markets.”

Sensitive
Demand for salmon is subject to significant price sensitivity.

Should the salmon price stabilize at, shall we say one euro lower than what it is now, how much more fish would you have traded-in for?

“Ten to 15 percent, maybe more,” Kowalski submits.

Graal has four factories. Company headquarters are in the village of Wejherowo, just to the northwest of port city, Gdansk. Competitors Morpol, Limito and Milarex share that proximity to Baltic beaches.

Acquisition
“We export to 30 countries in Europe, but also to the USA, Australia and Japan. We have 2,500 staff and saw turnover of EUR 250 million last year. We were listed until last year, when private equity fund, Abris, bought parts of the company. Now we’re two partners instead of many shareholders. I own 50 percent,” Kowalski explains.

With the support from Abris, Graal intends to go on the offensive: “We’re evaluating acquisitions in Western and Southern Europe,” he says.

Last year, it became known that Graal contributed to financing Norwegian company, Nekst, which is planning land-based salmon production. Kowalski won’t rule out deeper involvement in salmon-farming.

“To be vertically integrated could be interesting for us. It might help us from the difficulties that arise during short periods of high prices.”