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Revisions to Greenland’s fisheries law, approved on 16 May and enacted on 19 May, have introduced a 10-year transition period mandating that commercial fishing companies operating in Greenland be based there. The new regulations also limit private companies to owning 20 percent of the quota for a given species, while public companies are restricted to 33 percent.
Polar Seafood Greenland has expressed concern over these restrictions, warning of serious consequences for the company. Board Chair Michael Binzer criticized the move in a LinkedIn post, highlighting the potential impact on the company’s operations.
In a recent LinkedIn update, Binzer stated that the board is meticulously reviewing the situation to determine the company’s next steps. He emphasized that this is not due to immediate economic challenges but to prepare for a future where one-third of the company’s quotas will be eliminated.
“At Polar Seafood, we are in the process of mapping out what is needed for our Aasiaat factory to be maintained,” Binzer wrote. “The reduction in our raw material base is a significant concern. However, we are open to exploring alternative options to secure raw materials from other companies on competitive terms, and those discussions must now begin.”
Polar Seafood Greenland reported “unsatisfactory” results for FY2023, attributing the lower-than-expected catch to issues with fishing vessels. With the impending quota reduction, Binzer emphasized the need to determine how to finance the necessary changes to comply with the new fisheries reforms.
Binzer explained that the company must clarify what is permissible under the new law and whether external financing is feasible, considering the stringent requirements on solvency and equity or using the company’s quotas as collateral.
“The latter can be challenging with only a 10-year horizon on the quota allocations when a ship typically has to be financed over a period of at least 20 years, unless you can lease a ship,” he noted.
Despite these challenges, Binzer expressed confidence in the company’s ability to adapt to the new rules as it reevaluates its operations across the supply chain.
“In many ways, it is a relief that the Fisheries Act has now been passed – even though we deeply disagree with its content – because we can now get back to work and do what we do best: run an efficient, vertically integrated fishing group,” he wrote. “In other words: Put on our work gloves.
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