Seaweed Feeds Arkhangelsk Plant

MTA couple of men harvesting seaweed off Bolshaya Muksalma Island in July.
SOLOVETSKY, Arkhangelsk Region -- Consider this as a summer job: Your accommodation is a rusty shack on the coast of the White Sea and your equipment a long scythe for reaching down into the water to cut off kelp leaves and drag them into a rickety rowboat.

After spending six hours working this way, you need to hang leaves on shoreline racks to dry and load them onto a ship that will take them to the Arkhangelsk Seaweed Factory.

If you are lucky enough that the sea stays calm and rain does not rot the seaweed, you can make a 11 rubles (45 cents) per kilogram for your hard work, and a total of some 35,000 rubles ($1,430) over the summer.

The Arkhangelsk factory has been using kelp and other types of seaweed since 1918, employing seasonal workers to gather the raw material for iodine and other pharmaceutical and food ingredients. For years, it produced only mannitol, a sugar alcohol diuretic that has many medical uses, and agar, a kind of vegetarian gelatin. These ingredients were sold in bulk to the pharmaceutical and food industries.

The Solovetsky islands have always provided at least half of the raw materials for the small Arkhangelsk industry 300 kilometers away.

With the Soviet distribution model collapsing in the early 1990s, the factory diversified, reaching out into food supplements and seaweed-based cosmetics. "We needed to survive," said factory director Yelena Bokova in a recent interview, as she leaned on a weathered boat in Solovetsky village.

"So we came up with these small retail items," she said, as she nodded in the direction of the factory's store nearby, where tourists stock up on masks, creams and shampoos. Now beauty products make up almost one-quarter of the factory's output, and it also sells to cosmetics firms across the country.

But even though the economic climate has improved, unpredictable and thoughtless government policies are hampering the factory's development, Bokova said.

In 2005, the factory was turned into a 100 percent state-owned joint stock company. It is now controlled by a board of five bureaucrats who rotate every year and don't have any knowledge of the industry.

"It's a perverse setup that only exists in Russia," Bokova said. "They are not interested in sustaining the business and just slow the decision-making process."

Bokova's team, which has no say in the factory's business strategy, has to send mountains of paperwork to the directors, who mostly reside in Moscow.

The factory was appraised in January with the prospect of being privatized in an auction. The starting price was set at 160 million rubles ($6.6 million), but the auction fell through three times and the process has now stalled.

"There is no other industry like it in Russia," Bokova said proudly, but with a hint of exasperation. "The government talks about pharmaceutical self-sufficiency, but our factory is not recognized as unique or strategic."

Bokova fears that the eventual investor will only be interested in the Arkhangelsk factory's property and use the land plot for an auto repair shop: Such a fate has already overtaken a fish-processing plant across the street.

The factory's fate currently remains unclear, since the $6.6 million asking price expired in June.

Bokova estimated that the factory made 63 million rubles ($2.6 million) per year but worried that investors might not have the patience to make it pay.

"In Russia, investors want to get their money back in three years, and they have no long-term goals in mind," she said.

Climate change has been giving Bokova headaches as well. "There has never been a July like this year," she said, "it's raining more than ever, and we harvested a record low."

There used to be four harvesting sites on the Solovetsky islands, including one in the village of Solovetsky. It closed a few years ago, as tourism started to pick up. "Workers would use our boats to take tourists around for quick cash instead of working," Bokova said.

"Now we make sure the sites are as far as possible from all this tourism hubbub," she added, waving her hand in the direction of the port, where yachts were pulling in for the Solovetsky Regatta, starting the next day.

Out of 100 workers, there were 70 locals harvesting seaweed in the 1980s. Now there are only a few diehard enthusiasts who are prepared to put in the hours of tough labor.

The Arkhangelsk factory also had a local plant here that produced agar, where locals worked over the winter. For five years now it has stood empty, surrounded by grazing goats and carcasses of rusting machinery. Electricity and water on the islands were getting too expensive, and locals were no longer interested in factory work, Bokova said.

"Tourism and production are incompatible," she said. "People simply forgot how to work."

While tourism hinders production, it definitely helps sales. The store stays open until 11 p.m. in high season, and beauty products and food supplements fly off the shelves like hot cakes. "We sold 85,000 rubles' worth yesterday," store manager Tatyana Sidelnikova said.

Though the products enjoy a local following, they are virtually unknown beyond the region. Visitors from Moscow stock up on creams, face masks and bath salts, because finding them in the capital is next to impossible.

Attempts to launch an Internet store failed, and large distributors need an expensive television advertising campaign. "We limited our most of our marketing to word of mouth and distribute through a mail-order catalog," Bokova said.

For the moment, the factory has a clunky web page with links that lead to nowhere.

Sidelnikova agrees that more advertising would help. "For now we just distribute fliers on tour boats and paint signs on cardboard," she said. The storefront is currently decorated with a fishnet and a traditional harvesting boat, called a karbas, acts as a prop.

The factory's only distributor in Moscow identifies himself as Vladimir and takes occasional calls in an office that sells auto parts. "Customers know about the factory's products because they have all been to Solovki," he said over the phone. "I distribute them as a hobby. Suppliers and stores don't seem to be interested."

Natalya Beskhlebnaya, 26, a customer of Vladimir's, said other, more expensive products could not compare with the Solovki seaweed.

"Imported beauty products have pretty packaging and much more variety, but they feel artificial, whereas the Arkhangelsk products clearly have natural seaweed in them, which is apparent from how they look and smell," she said.

"Many [friends] would purchase them if they were available more easily in stores," she said. "But wider distribution would probably make them more expensive, and this way I feel like I use something exclusive."