Murmansk Sea Fishing Port: investments in success
Privatization process of 1990-ies featured too many excesses. Lots of enterprises sank because of unprofessionalism of their new owners with tens of thousands of people having lost their work. However, there are some positive examples of that privatization. Murmansk Sea Fishing Port is certainly among them.
The company, once a trademark of Murmansk, was in its darkest period at the turn of this century. Part of its assets was sold or leased out, the fleet of handling equipment and the refrigerating terminal required an emergency repair and modernization, the berths required reconstruction, the workforce shrank, the fishers were concerned about idle periods and delays. The port’s auction sale in December 2015 was understood by many Murmansk citizens as the final point of the company’s destiny. Yet, two years following the privatization showed that it was a starting point towards renovation and development. New owners not only managed to preserve the cargo base of the port but proceed considerably in terms of modernization.
In 2017, MSFP handled 333,000 tonnes including 208,000 tonnes of fish, 105,000 tonnes of oil products, 20,000 tonnes of other cargo. In the first half of 2018, throughput of MSFP totaled 208,400 tonnes with the annual result expected to reach 360,000 tonnes mostly due to expansion of fish handling to 238,000 tonnes.
“This result is quite achievable, - commented Eduard Malashenkov, head of MSFP transshipment complex. – In 2017, refrigerating terminals of MSFP used to accept 14,300 tonnes of frozen fish per day, which is 38% of their maximum capacity (37,000 tonnes). In the first half of 2018, average daily loading of refrigerators was as high as 26,400 tonnes. It should be taken into consideration that fishing companies are primarily focused on export. If capelin is excluded from total volumes of frozen fish, average daily storage of frozen fish is 12,300 tonnes which is less than in 2015-2017”.
The number of calls in 2015-2018 was stable at 1,294 units per year while the speed of loading/unloading increased considerably. In 2015, average handling time of one large-capacity vessel was 1.8 days, in 2016 – 1.7 days, in 2017 – 1.6 days. In the six month of 2018 it was flat, year-on-year.
Having its facilities underloaded, AO Murmansk Sea Fishing Port has to attract alternative cargoes including oil products and general cargo. In 2017, Murmansk Sea Fishing Port established partnership with a company supplying Arctic drilling platforms, OOO “Sakhalin-Shelf-Service” and started handling general cargo supplied for Sakhalin-Shelf-Service.
In 2018, the company implemented two projects to transship oversized cargo for AO Apatite and to dispatch pipes of different diameter by railway transport. Besides, MSFP won a competition of PAO Novatek to become its sub-contractor for transshipment of general cargo under the project on creation of a center for construction of large capacity offshore facilities in the Murmansk Region.
MSFP shareholders are implementing an investment programme for an optimal and efficient loading of the port’s facilities. “In the three-year period investments will total RUB 574 million. In 2016, the company invested RUB 166.2 million, in 2017 – RUB 176.3 million. In 2018, we are going to spend RUB 231.5 for port modernization and development”, - said Oleg Kreslavsky, Administrator of AO MSFP. According to him, the company's portfolio of other investment projects totals RUB 196.2 million. Some of the projects are already under implementation with financing ensured by performance improvement.
To compare, between 2010 and 2015, when the state held 100% of MSFP shares, investments in the port totaled RUB 58 million: 2010 – RUB 9 million, 2011 – RUB 2 million, 2012 – RUB 5 million, 2013 – RUB 27 million, 2014 – RUB 7 million, 2015 – RUB 8 million.
The fleet of small-scale mechanization was retrofitted to almost 70% in 2016-2017. In 2017, the company purchased 12 electric loaders and 4 fork-lift trucks. For the first time over 20 years the company acquired a portal crane, Albatros. Besides, two ТЭМ2У locomotives underwent capital repair.
In 2018, the company continues purchasing new equipment and upgrades its production facilities. This year has seen modernization, certification and commissioning of the sanitary-ecological laboratory fitted with state-of-the-art equipment and serviced by high class professionals. Kurs-Nord, training center of MSFP has moved to a new building and has expanded the list of offered trades.
The shareholders invest resources into expansion and modernization of closed and open storage facilities in the Southern cargo area and in the Coal Base area. Refrigerating terminal No 3 is under modernization. Its capacity is 20,000 tonnes. New refrigerating system being developed today will feature high energy efficiency.
From 2016, the port’s northern area has been heated by electricity which has let reduce heating expenses. According to Oleg Zayets, Chief Engineer of MSFP, the northern area has seen modernization of transformer substations and water supply system.
Modernization of port infrastructure has let decrease considerably consumption of energy resources for the company’s main activities. In 2015, energy consumption for transshipment of one tonne of cargo was 0.055 Gcal. In the first half of 2018 – 0.023 Gcal/tonne. Electric power consumption from 27.7 kWh in 2015 to 24.6 kWh in the first half of 2018.
In 2017, MSFP paid RUB 188.7 million of taxes to the budget and non-budget funds of different levels. The activities performed in the first half of 2018 resulted in charging RUB 105 million. When speaking about budget efficiency per employee it was RUB 367,000 in 2016, RUB 369,000 in 2017 and RUB 204,000 in the first half of 2018, showing a 11-pct growth.
It should be noted that the company has managed to keep its budget efficiency at the level of 2015 despite the decrease of throughput by 16.7% in 2016, and by 10.2% in 2017 with the growth of 11% seen in the first half of 2018.
AO Murmansk Sea Fishing Port makes all investments without attracting public capital. “Unfortunately, MSFP’s projects requiring state participation have not been supported so far, - said Oleg Kreslavsly. – The project on berths suggested in 2017 and supposed to be implemented through public private partnership was approved by the Ministry of Economic Development. MSFP was not only going to invest over RUB 9 billion in the concession (including RUB 7 billion of own resources and RUB 2.5 billion of raised funds) but it was also ready to make annual payments to concedent. Over the entire period they would total RUB 763 million.” However, Rosimushchestvo (Federal Property Management Agency) canceled the agreement on the fiduciary management of berths and handed them over to FSUE Natsrybresurs. “In the result, possible investments in modernization and possible budget revenues under the public private partnership were replaced with one more claimant of budget financing”, summarized Oleg Kreslavsky.
However, the port hopes that the concession project will be revived. The more so as the changes happening in Murmansk Sea Fishing Port prove that all activities of the company to facilitate investments and to develop public private partnership are not only focused on both improvement of the sea terminal efficiency and increasing its contribution in the economy of Russia. Besides, they comply with the state economic policy followed by the federal government.
Detailed report on MSFP activities is available in Russian >>>>
Aleksei Bakumenko, Sergei Plisov.