Grieg Q4 hit by steep rise in production costs
REVENUES for salmon producers may be on the rise, but so too are production costs.The 2022 final quarter trading update from Grieg Seafood showed that costs were up sharply on the same period in 2021.
Grieg reported a reduced harvest from both its Norwegian and British Columbian operations, with Canada down by more than half.
This makes a total of 21,200 tonnes for Q4, against 23,700 tonnes in the same period 12 months ago.
The 2022 Q4 harvest was as follows (Q4 2021 figures in brackets):
• Norway Rogaland – 6,900 tonnes (7,300 tonnes);
• Norway Finnmark – 12,800 tonnes (12,400 tonnes); and
• British Columbia – 1,500 tonnes (4,000m tonnes).
But it is average farming costs per kilo in both countries that are likely to raise a few eyebrows. In the case of Finnmark and British Columbia, they have gone up by around 40% over the past 12 months.The Norway Rogaland increase is less, but still high enough, at round 25%.
While revenues remain healthy, the Grieg figures certainly dispel the belief held in some political quarters that salmon companies are currently raking it in.
Cost inflation, which centres around feed, energy and transport, is becoming a big problem for many breeders with little respite in sight.
The Q4 2022 cost per kg figures were (Q4 2021 comparisons in brackets):
• Norway Rogaland – NOK 54.6 (NOK 43.6);
• Norway Finnmark – NOK 54.1 (NOK 38.1); and
• British Columbia – CA $13.3 ( CAN $9.4).
As this issue went to press, the full Grieg Q4 report, including revenues and operating profit, was due to be published on 16 February.
NORDIC Halibut said it had exceeded its revenue target for last year and was ready to reach its phase one production goal.
The Norwegian-based company produces sushi-grade halibut and claims high-end markets have demonstrated a strong willingness to pay an established price level for quality farmed halibut.
During the final quarter of 2022, Nordic Halibut harvested 195 tonnes, heads on gutted (HOG), taking the total for last year to 537 tonnes.
Nordic Halibut said: “The company will continuously seek to optimise biomass utilisation and boost market conditions towards long-term production targets. Strategic allocation of harvest and sales volumes is key to maintaining high price achievement while building market position in new and existing channels in cooperation with partners.”
The company said the production ramp-up was advancing according to plan, with an all-time high level of 700,800 fish put to sea during 2022. This is equivalent to a harvest volume of 3,500 tonnes (3,150 tonnes HOG) by 2025.
It added: “Through several production cycles, the company has proven stability and predictability in the sea phase production with one fish put to sea equal to 5kg harvested three years after release.”
This year, Nordic Halibut plans to put a million fish to sea, equivalent to 5,000 tonnes, or 4,500 tonnes HOG, by 2026.
BRITISH Columbia’s salmon farmers have produced a report setting out their vision for the transition from the existing open net-pen system of aquaculture.
The BC Salmon Farmers Association report, BC Salmon Aquaculture Transition:
Then & Now, stresses that the interests of the state’s indigenous First Nations must be at the heart of the transition strategy.
In July 2022, the Department of Fisheries and Oceans Canada (DFO) released a framework for discussion regarding the net-pen transition plan for BC.The proposal for transition of the salmon farming sector to be First Nations led is taking place concurrently with the DFO’s development of a new framework.
Diane Morrison, Board Chair of the BC Salmon Farmers Association and Managing Director of Mowi Canada West, said: “Working together with First Nations who are interested in aquaculture is essential to our future on the west coast. These principles will ensure we transition in a way that progressively minimises interactions with wild salmon and be led by the First Nations in whose territories we operate.”
To be compatible with the sector’s vision for salmon farming within the territories of First Nations, BC Salmon Farmers suggest the following Fundamental Principles be included:
First Nations Right to Self-Determination: The Transition Plan must fully recognise and support Indigenous rights to selfdetermination and the rights of First Nations to make informed decisions on matters that impact their territories.
Reconciliation:The Transition Plan must ensure continued opportunity for capacity building within Nations and equitable economic opportunities – as well as establish a framework for enduring long-term relationships. Governance:The Transition Plan must include a governance model based upon tripartite agreement (First Nations, federal and provincial governments) – and provide a robust role in governance and oversight for Indigenous rights holders in whose territories the salmon farms operate.
Sustainable Sector Growth: The Transition Plan must support the creation of an attractive business environment that signals Canada is committed to advancing growth in sustainable salmon farming in coastal BC.A transition growth plan [is needed] that builds towards increasing production volumes.
Alignment with Federal Initiatives: The Transition Plan must support investment into innovative practices and technology, and other federal government priorities, especially the Climate Change Plan and Blue Economy Strategy.
Trust and Transparency:The Transition
Plan must provide clear communication processes and outlets, including engagement opportunities, that will help to foster a better understanding of the industry and create trust and transparency with local First Nations who have aquaculture within their territories, as well as First Nations who have an interest, and the broader Canadian public.
By working through these principles, the report says, the Transition Plan has the potential to create a level of business certainty required for the long-term stability of the BC salmon farming sector and allow the sector to play an even greater role in the ongoing process of reconciliation in BC, community vitality and the restoration of wild salmon. It could also help to advance Canada’s national Blue Economy strategy.
“Transition is not new to our sector,” said Brian Kingzett, Executive Director of the BC Salmon Farmers Association.“Like all farmers, we have been transitioning for decades to adapt to changing conditions.We have been investing in and implementing cutting-edge technologies and innovations to improve our processes, and progressively minimise interactions with the surrounding marine environment, including wild salmon.”
ALTERNATIVE asset investment firm Cadman Capital Group has acquired Quoddy Savour Seafood, a Canadian land-based seafood farming and processing business.
The Quoddy site has the capacity to raise and hold lobsters and urchins, as well as other key local fish species. It is based in Pennfield, New Brunswick, Eastern Canada, and situated on a 33-acre site next to the Bay of Fundy, part of the “golden triangle” of the seafood industry in north-east Canada.The facility provides access to the key seafood markets of New York, Boston, Montreal and the wider North American East Coast.
James Dinsdale, Chief Executive Officer of Cadman, commented: “Quoddy Savour Seafood joins the Group at an exciting time for the business.The acquisition reiterates our continued commitment to developing restorative aquaculture solutions to support the sustainable improvement of marine ecosystems.We look forward to working with the existing team, and local community and fisheries to bring income and jobs to the region.”
The acquisition follows the announcement that Cadman – which is also a family office – has acquired a strategic equity stake in Urchinomics, a pioneering aquaculture venture that makes an ecological threat – growing sea urchin numbers – into a valuable seafood product.
Thriving kelp forests are important not only in terms of helping to protect biodiversity in the ocean, but also because they tie up large amounts of carbon that would otherwise contribute to global warming. Growing sea urchin populations threaten the kelp, however, by overgrazing and creating so-called “urchin barrens”.
Urchinomics, founded by CEO Brian Tsuyoshi Takeda, aims to reverse this destructive process by removing the urchins and raising them in land-based aquaculture facilities, creating employment for local fishers and producing high-value, gourmet seafood as well as restoring the ocean environment.
Giles Cadman, ecopreneur and founder of Cadman Capital Group, said:“Urchinomics is a tremendously exciting business.They share our passion to develop nature-based solutions to tackle the fight against climate change and help heal our oceans.We have long recognised that solutions need to focus on the holistic restoration and the sustainable improvement of marine ecosystems, allowing the creation of stronger biodiversity that helps the planet. Urchinomics’ core model of restorative aquaculture is synergistic to our current operations, particularly within lobster production, and we look forward to supporting Brian and the team to accelerate their operations globally.”