Pacific Andes International Holdings will have to demolish its huge pollock plant in Qingdao, China, within five years, sources told Undercurrent News.

Hong Kong-listed Pacific Andes has until now been the world&rsquo s largest producer of double frozen pollock fillets from its plant in Qingdao.

The news follows the forecast by rating agency Moody&rsquo s that Pacific Andes will exit the Russian pollock business altogether.

Asked about this, the company told Undercurrent its subsidiary China Fishery Group would continue to purchase pollock on the spot market, when prices are favorable.

The spokesperson would not comment on information that its large Qingdao plant is due for demolition.

According to sources, this news is &ldquo well known in the industry&rdquo . It is due to a government resolution, which has identified the area where the plant is as a high-class residential area, said one source.

&ldquo Everybody knows this, including the government,&rdquo said this executive, who is based in Qingdao. &ldquo Pacific Andes even has chosen the new place to build a new plant, which is in Jiaonan.&rdquo

This executive said Pacific Andes would receive a generous compensation for the move.

&ldquo We do not have any comment to make on this,&rdquo said the Pacific Andes spokesperson.

Pacific Andes&rsquo latest financial results in May revealed that it suffered a 53% decline in revenue from its Russian supply business to $105.3m from October 2013 to March 2014.

On March 24, the company had announced that it was terminating its long-term supply agreements (LSAs), to buy pollock on the spot market from the Russian Far East instead for its plants in China.

&ldquo Although following the termination of the LSAs, the group participated in the spot market, the group did not trade on occasions when the spot prices of certain products were unfavorable,&rdquo the company then commented in its first half year results in May.

&ldquo In line with its announcements, the current plan for China Fishery Group is continue to purchase products from the Russia Far East at spot prices or on a short term contract basis,&rdquo the spokesperson now told Undercurrent. &ldquo The extent of these purchases will vary dependent on the favorability of prices.&rdquo