Feed
How the aquafeed sector is adapting to changing markets around the world
Introduction
THE aquafeed industry has seen diverse challenges in recent years and over capacity has forced companies to look for new opportunities. In Scotland, the trend for the big salmon producers to make their own feed continues, led by Mowi, which has had a successful first year of operation at its Kyleakin mill on Skye.
As Mowi managing director Ben Hadfield told Fish Farmer, as well as providing feed for Mowi operations in Scotland, Ireland, the Faroes and Norway – where the company’s first feed factory is sited- third party sales from the plant are also increasing.
Canada based Cooke Aquaculture announced last year that it, too, would be developing its own feed lines in the UK, taking over the Skretting plant in Invergordon. Cooke Aquaculture vice president of public relations, Joel Richardson, told Fish Farmer: ‘We are aiming for a Q1 2020 restart of the Northeast Nutrition Scotland feed mill located in Invergordon.’
And Bakkafrost’s acquisition of the Scottish Salmon Company will bring more change, as the Faroese farmer will use its Havsbrun feed subsidiary to generate ‘synergies’ in Scotland. As Bakkafrost CEO Regin Jacobsen said after the SSC buy-out in September: ‘We can use the excess capacity we already have in place – fishmeal, fish oil and feed.’ Investment at
Havsbrun will increase capacity further, added Jacobsen, and the synergies will take effect within two years, as the Scottish Salmon Company’s existing feed contracts end.
Dutch bank Rabobank pointed out in a report, published last September, that the self-sufficiency of Mowi and Bakkafrost in Norway, Scotland, Ireland and the Faroe Islands reduces the aquafeed market in Europe by 20 per cent. And the report warned that further vertical integration, for example in Chile, could not be ruled out in the future.
The salmon feed sector is also affected by slow production growth in the industry, while there is over capacity in the shrimp market, and the tilapia and pangasius industry has its own problems, with over supply and ‘a lower profit pool for the entire global value chain, including feed production’.
The report, How to Succeed in Aqua Feed, said: ‘After years of growth, the aqua feed industry is experiencing a deceleration, with increasing over capacity in nearly all key markets globally. The causes vary and are often region-specific, but what is clear is that the aqua feed industry will need to think out of the box to find growth.’
But Gorjan Nikolik, senior animal protein analyst at Rabobank, said feed companies that adapt to the new environment can help drive the whole aquaculture industry forward.
‘The feed companies have to do something, the feed market is slowing down and contracting in the commodity end, while in the more innovative end there is so much opportunity. Everyone can’t do everything – the strategy has to fit the company, the core competency, the region and the species.’
He said Cargill has invested in novel technologies and ingredients such as Calysta, and Skretting has ‘shown an appetite to invest in new mills in new regions’.
‘But there are also smaller players, like Aller Aqua, who have expanded into Africa and, for example, teamed up with Yalelo in Zambia to produce tilapia and are a great example of an alternative way to operate.’
Over the next few pages, we talk to some of these companies, as well as to leading researchers, and look at how they are developing new markets, in RAS, alternative proteins and oils, and in regional development.
“We are aiming for a Q1 2020 restart of the feed mill in Invergordon”