International

from Fish Farmer 2022 Year Book

by Fish Farmer Magazine

Processing

Corporate and political contests produced winners and losers in an eventful year

In January, local government

leaders and representatives of the salmon farming industry wrote an open letter to Canada’s Fisheries Minister to protest her decision to phase out 19 salmon farms in British Columbia.

The decision to phase out all opennet fi sh farming in the Discovery Islands region over the next 18 months was announced by Bernadette Jordan, Minister for Fisheries, Oceans and the Canadian Coast Guard, in December 2020. The letter said the decision puts at risk 1,500 jobs supported by the farms and indirectly threatens the viability of the industry throughout the province of British Columbia. It also asked Jordan: “What is your plan now to help our communities recover from your decision? What is your government This page from top: willing to commit at this stage, and Discovery Islands BC; Brier Island, Nova Scotia beyond, to help us pick up the Opposite from top: pieces for the Brian Perkins; Vega- people who live, Islands work and take care of their families here on our coast?” Announcing the shutdown,

Jordan, Minister for Fisheries, Oceans and the Canadian Coast Guard, in

THE LETTER December 2020.

SAYS THE DECISION PUTS AT RISK 1,500

JOBS is your plan now to help our communities recover from your the Canadian Government said that it had consulted with First Nations representatives in the region, who blame fi sh farmers for the decline in wild salmon. In February, we reported that two leading fi sh farmers in the region, Mowi and Cermaq, had applied to the Federal court of Canada in Vancouver for a judicial review of the Discovery Islands decision. The dispute rumbled on throughout the year. Also in February, we reported that Cooke Aquaculture was planning to invest almost CAN $60m building a post-smolt salmon hatchery in Canada’s Nova Scotia province. The facility will be at Centreville on the 20-mile-long Digby Neck peninsula. The national broadcaster

CBC.ca said the land based hatchery would be able to produce three million salmon a year, supplying Cooke’s 13 fi sh farms in the province. The total investment is thought to be around CAN $58.6m.

There was a new man in a senior role at the Global Aquaculture Alliance, the international body representing the industry. Brian Perkins, formerly Regional Director, Americas, with the Marine Stewardship Council, was appointed as the GAA’s Chief Operating Offi cer. Over the course of 2021, the GAA was involved in merging its operations with its sister organisation, Global Seafood Assurances.

In March, after years of wrangling, Mowi looked to have fi nally received clearance to carry out fi sh farming on a UNESCO World Heritage site in a remote region in northern Norway, close to the Arctic.

Despite earlier objections from various environmental groups, including UNESCO, the Ministry of Trade and Industry granted provisional permission for work to go ahead in Rødskjæran on the Vega Islands.

The permit was conditional on the

grounds that it was compatible with a new municipal plan for the Vega coastal area.

Also in March, a group of Norwegian salmon and trout farming companies lost their challenge against the country’s “traffi c light” system, which regulates growth within the industry. The companies, mostly based in the south-west of Norway, took their case to a district court in Bergen at the end of January.

Their region – designated as production area 4 or PO4 – had been placed into a “red zone”, which prevented future expansion. It also demanded a reduction in existing activity of 6%. The cost to the farmers in fi nancial terms was estimated during the case to be more than NOK 420m (£35m) a year.

The system divides the Norwegian coastline into several colour-coded production zones consisting of green, where aquaculture expansion can take place virtually unhindered; amber or orange, where limited expansion is allowed; and red, where fi sh farming activity must be reduced.

However, in a verdict delivered on 17 March, the court rejected the farmers’ arguments and said the imposition of a red-light zone did not signal a permanent ban on growth in PO4, suggesting that the situation could change if the environmental situation improves.

Shortly afterwards, the farmers announced their intention to appeal against the decision.

In May, Faroese fi sh farmer Bakkafrost paid its shareholders around £25m in dividends for 2020, around a third less than previous years.

Bakkafrost is the largest salmon producer and the biggest private employer on the Faroe Islands. It also has operations in Scotland – where it recently acquired the Scottish Salmon

“The decision to phase out all opennet fish farming in the Discovery Islands region... was announced by Bernadette Jordan”

AUGUST SAW THE RESOLUTION OF AN EPIC BATTLE OVER THE FUTURE OF NORWAY ROYAL SALMON

This page from top: Vibecke Bondø, SalmoNor; Clean Seas salmon Opposite from top: Oyebadejo Augustina; Marta Carvalho; Tierra Del Fuego Company – and the US. The group is the world’s third largest salmon producer.

The total payout was worth DKK 216m or NOK 294m, with each dividend priced at DKK 3.65 or almost NOK 4.96. A Faroese company that announces its quarterly and annual fi nancial results in Danish kroner, Bakkafrost is listed on the Oslo Stock Exchange and the shares are quoted in NOK.

In May, aquaculture technology and services group AKVA recorded a “respectable performance” for 2020 despite Covid-19.

Financial highlights included: revenues increased by 3% to NOK 3,177m (£274m); EBIT was up from NOK 62m (£5.3m) in 2019 to NOK 147m (£12.7m) in 2020; net profi t of NOK 91m (£7.8m) was up from NOK 17m (£1.46m) in 2019; and ROACE (return on average capital employed) increased from 3.3% at the end of 2019 to 8% at the end of 2020.

CEO Knut Nesse said: “We are dependent of our customers’ fi nancial capacity and willingness to invest in new technology and sustainable solutions.”

Meanwhile, a leading Australian aquaculture company took the unusual step of asking to be listed on the Oslo Stock Market. Clean Seas Seafood Limited, based in Spencer Gulf, Port Lincoln, South Australia and a producer of kingfi sh, mulloway and tuna, made a formal application for a secondary listing on the Euronext Growth Exchange, trading home to many of Norway’s emerging fi sh farming businesses. Clean Seas launched a private off ering of new shares to raise capital to more than treble current production of kingfi sh to around 10,000 tonnes, seeing its fi rst day of trading on the exchange on 20 May. In June, the UK and Norway reached agreement on a trade deal, which ensured that pre-Brexit tariff levels could be retained. Norwegian Prime Minister Erna Solberg said the deal was good for Norway’s seafood industry, although not all producers agreed, and Norwegian farmers also expressed concern that imports of meat and cheese from the UK threatened their own markets.

In aquaculture, the big news was the outcome of a bidding war for producer SalmoNor AS. Seafood giant NTS ASA beat rivals Mowi and SalMar. NTS plans to merge SalmoNor with its wholly owned fi sh farming subsidiary, Midt-Norsk Havbruk (MNH). The deal valued SalmoNor at almost NOK 3bn (£255m).

SalmoNor’s General Manager, Vibecke Bondø, said: “The merger of two strong and competent aquaculture companies such as SalmoNor and MNH will be a good industrial solution that triggers signifi cant

synergies… for us, this is about facilitating further sustainable growth and new jobs on the coast. We also want in the future to be a clear social actor that contributes to building viable local communities.”

Meanwhile, Leif Inge Nordhammer became Chairman of fi sh farming giant SalMar. He has twice been Chief Executive at the company, in 1996–2011 and again in 2014–2016. He currently runs his own investment company, LIN AS.

In July, SalMar announced another acquisition deal, investing NOK 80m (£6.8m) to acquire a 51% stake in the aquaculture company Nekton Havbruk. Based in Smøla in central Norway, Nekton Havbruk is a comparatively small player in the salmon business. It holds two food fi sh production licences, but the move will mean further growth for SalMar’s Norwegian operation in the immediate vicinity of some of its existing farm sites.

And in South America, Argentina’s southernmost province is to ban open-net salmon farming. The provincial legislature of Tierra del Fuego has approved a bill to outlaw the practice amid “concerns about stability”. The Tierra del Fuego archipelago covers an area of 28,400 square miles (73,700 square kms) of which one third belongs to Argentina and two thirds forms part of Chile.

Ironically, it is probably the best region in the country for salmon farming. The ban also includes the South Atlantic Islands and the part of Antarctica over which the country has some infl uence. In August, fi gures from Iceland showed that the export value of its farmed fi sh products to June 2021 was up 67% to ISK 3.2bn (£18.4m). The export value of marine products from the country was up 17.9% to ISK 4.1bn (£24m).

Aspiring aquaculturalists Oyebadejo Augustina from Nigeria and Marta Carvalho from Portugal were named as the recipients of the annual Women in Aquaculture scholarship programme run by salmon farmer Kvarøy Arctic.

The two will each receive a $10,000 award and a hands-on opportunity to spend time at Kvarøy Arctic’s farm sites in Norway. The initiative is hosted in partnership with Seafood and Gender Equality (SAGE).

August also saw the return of the Aqua Nor trade show as an in-person event. The event, held once again at Trondheim’s Spektrum Centre, was in a “hybrid” format with many of the events and panel discussions being broadcast live online. It was the industry’s fi rst large-scale in-person event since the arrival of Covid-19, but many people from outside Norway were not able to attend due to continuing travel restrictions.

The end of August also saw the resolution of an epic takeover battle to determine the future of Norway Royal Salmon. Despite predictions to the contrary, NTS emerged as the winner.

SalMar had looked to be on its way to victory, but as the deadline for acceptance of the NTS off er drew to a close NTS won two key share blocks from Egil Kristoff ersen and Sonner and from Norway Fresh, taking its stake to more than 70%. NTS had off ered NOK 240 a share and faced a rival bid from SalMar with a higher fi gure of NOK 270.

NTS is a major player in the supply of wellboats and support vessels, and other aquaculture support services but its salmon farming operations are relatively modest.

This page from top: Havfarm 1; Huon salmon Opposite from top: Bjørnar-Skjæran; Joyce Murray MP In October, we reported that Mowi had obtained a “green” credit facility, giving it access to loans totalling €1.8bn (£1.54bn). The deal, with a number of leading European banks, is linked to the company’s sustainability targets and will last for fi ve years. Less happily, Mowi also confi rmed that the number of fi sh lost in a mass mortality event at one of its sites in eastern Canada could be as many as 450,000.

The losses were blamed on low dissolved oxygen levels at Mowi’s farm at the Gorge, on the south coast of the province of Newfoundland and Labrador.

The provincial Department of Fisheries, Forestry and Agriculture said the incident was “site-specifi c” and stressed that no abnormal mortalities had been identifi ed at any other sites.

In Norway, the site that holds the giant Nordlaks off shore platform Havfarm 1 was certifi ed by the Aquaculture Stewardship Council. The Chinese-built Havfarm 1 is currently positioned in the Ytre Hadseløya locality in the municipality of Hadsel municipality in Vesterålen. The company has also been fi ghting a decision by the Norwegian Directorate of Fisheries not to allow the conversion of its development licences on fi sh welfare grounds.

In another corporate drama, shareholders in Australian salmon farmer Huon Aquaculture voted in favour of a takeover bid from Brazilian-based multinational meat processor JBS.

In an online meeting on 29 October, Chairman Neil Kearney set out the case for accepting the off er, which values Huon at around A$550m (£300m) and means shareholders would get $3.85 per share.

More than 99% of shareholders voted in favour of the off er, putting the takeover beyond doubt. A potential competing off er from businessman Andrew Forrest, through his Tattarang investment vehicle, failed to materialise. Forrest had criticised the deal on the grounds of environmental sustainability and animal welfare.

In the United States, a trio of senators from both major parties jointly brought a bill before the US Senate that aims to revitalise the American aquaculture sector.

Democrat Brian Schatz and Republicans Roger Wicker and Marco Rubio introduced legislation in the Senate at the end of October to support the development of an off shore aquaculture industry.

The bipartisan bill, the Advancing the Quality and Understanding of American Aquaculture (AQUAA) Act, aims to increase production of sustainable seafood through the raising of fi sh in federal waters.

The AQUAA Act would establish national standards for off shore aquaculture and clarify a regulatory system for the farming of fi sh in the US exclusive economic zone (EEZ). The bill would also establish a research and technology grant programme to fund innovative research and extend services focused on improving and advancing sustainable domestic aquaculture.

This year also saw new faces in the fi sheries and aquaculture role in both the Norwegian and Canadian gov-

ernments. In Norway, the defeat of Erna Solberg’s Conservatives meant that Fisheries Minister Odd Emil Ingebrigtsen was replaced by Labour’s Bjørnar Skjaeran.

In Canada, Joyce Murray, an avowed opponent of open-net salmon farming, was appointed as Canada’s new Fisheries Minister. She took over from Bernadette Jordan, who lost her seat in the recent Canadian general election.

Hopes that Murray, who represents Vancouver in British Columbia, might take a more conciliatory attitude to aquaculture may be short-lived.

She has been an MP since 2008 and is on record to supporting anti-fi sh farming groups by signing a petition calling for an end to open-net farming in the province.