12 minute read
Land-based farming
Land-based farming and hatcheries
RAS farm projects saw much investment - and a few setbacks too
This page from top: Årdal Aqua (impression); Andreas Kvame Opposite from top: The Dongwon farm; SalMar’s Tjuin hatchery; Proximar Seafood site AN enormous amount of
investment is going into recirculating aquaculture systems (RAS) in fi sh farming, but while the rewards are potentially great, so are the risks.
In January, for example, we reported that a 500-cubic-metre tank had burst at pilot RAS salmon farm in Norway just a few days before the facility was due to take its fi rst fi sh.
The incident took place at the Havlandet RAS pilot, which is part of the INC Group. At fi rst it was reported there had been an explosion, but this has since been ruled out.
According to the Bergens Tindene newspaper, initial estimates of the cost of the damage to the tank – also known as a bioreactor – is thought to be around NOK 3m (£250,000). It was fi lled with water at the time.
Havlandet, which has more than 17 years’ experience of land-based farming with other fi sh species, began construction work on the site in January this year, close to the city of Florø in western Norway. In February, it emerged that Grieg Seafood was set to become the fi rst mainstream salmon producer to invest in a land-based site designed to grow salmon to market size .
The joint venture in Western Norway will be called Årdal Aqua. It will produce 3,000 tonnes of postsmolt for restocking at conventional marine sites, as well as up to 2,000 tonnes of market-sized salmon.
Årdal Aqua is one-third owned by Grieg Seafood, one-third by smolt and post-smolt company Vest Havbruk and one-third by Stavanger-based investor group Omfar.
CEO Andreas Kvame said: “We are working hard to improve biology and fi sh welfare, and to reduce our impact.
“For a long time, we have invested in post-smolt, where we keep the fi sh longer on land before we release it into the sea, as an important part of the solution.”
He added: “With Årdal Aqua, we will be able to develop this farming method further. We aim for all of our
fi sh in Rogaland to spend less than one year in the sea.” Meanwhile, Norway’s Fisheries and Seafood Minister, Odd Emil Ingebrigtsen, rolled out a strategy for aquaculture that included development of more land-based farms as a key element. He said: “Our goal with this strategy is to increase value creation. If the industry is to continue to grow, then it must be sustainable. “The strategy will, among other things, look at infrastructure, and access to feed and digitisation, and the permit system is also an important issue.” Norway’s general election later in the year left Ingebrigtsen and his party out of power, but there is no indication so far that the aquaculture strategy is going to look radically diff erent under a new minister. Also in February came the news that Norwegian salmon giant SalMar was teaming up with RAS specialist Krüger Kaldnes to build what will be the world’s biggest smolt hatchery. The Tjuin land-based hatchery in Malm, Norway, will have a total area of 17,000 square metres and construction started in May of this year. Construction business Consto was also collaborating on the project. Krüger Kaldnes and SalMar have previously worked together on the Follafoss I and Follafoss II onshore smolt hatcheries. Meanwhile, in Japan, Israeli company AquaMaof Aquaculture Technologies started work on Proximar Seafood’s land-based salmon farm. AquaMaof worked with Proximar on the design of the facility, which will include a hatchery, nursery and full grow-out areas, as well as management, operational and processing zones. The farm will make use of RAS technology and will be located near Japan’s iconic Mount Fuji. The announcement follows an initial public off ering (IPO) by Proximar on Oslo’s Euronext market, which followed a private placement exercise in January. It’s been a busy year for Salmon Evolution, a Norwegian RAS farmer with one production site under construction at Indre Harøy in Norway and a joint venture, “K Smart”, with Dongwon Industries for a 16,800-tonnes production facility in South Korea. Construction on this is due to start in 2022, with fi rst growout production targeted in 2024. In March, we reported that Salmon Evolution had signed a long-awaited
deal with the South Korean fi sheries giant Dongwon Industries to start working on K Smart. The project will be built on the eastern coastline in Yangyang county in the province of Gangwon, not far from the border with North Korea. As from July, shares in land-based fi sh farmer Salmon Evolution ASA are now being traded on the Oslo Børs stock exchange. Also in July, specialist turnkey supplier Artec Aqua signed up to the K Smart project. North American salmon producer AquaBounty Technologies is ground-breaking not only as a landbased farmer, but also because it aims to be the fi rst to grow genetically modifi ed (GM) fi sh for the market. In July, AquaBounty posted a US$6.1m loss for the fi nal three months of 2020, close to double the fi gure for Q4 2019. Despite that, the company, which is pioneering the development of genetically modifi ed salmon, says the outlook for this year was positive. AquaBounty has started customer feedback trials with its fi sh and says it is “optimistic”. Q4 Revenues – based on limited sales of non-GM salmon – totalled $50,197 against $46,367 a year ago. Operating expenses were $6.1m, as compared to $3.5m in the same quarter for the previous year, but this was primarily ascribed to an increase in production costs as the biomass of fi sh in the company’s farms grew from 161 metric tonnes to over 603 metric tonnes. The following month, AquaBounty announced that it had selected an appropriately named venue for its fi rst full-scale site – Pioneer, Ohio. The new farm represents an important milestone for the company. It will be AquaBounty’s fi rst large-scale commercial facility, with a planned annual production capacity of 10,000 metric tons – approximately eight times the size of its existing farm in Albany, Indiana, which has an annual production capacity of 1,200 metric tonnes. In July, we also reported that Gigante Salmon AS, based in the coastal town of Bodø, Norway, planned to list on the Oslo Børs. Under the guidance of Sparebank 1 Markets, the company plans to raise NOK 192m (£16m) to help fund its growth plans and has submitted an application to list on EuroNext. Gigante Salmon AS is part of the fi sh farming group Gigante Havbruk, founded by Kjell Arild Lorentsen in 1988. This summer, the company is planning to start construction of a fl ow-through land-based salmon farm in Rødøy, Nordland. Work on the fl ow-through project is due to start this summer. Completion is expected in 2023, when it will be able to produce almost 14,000 tonnes of salmon. Also in July, AquaMaof Aquaculture Technologies Ltd landed two key land-based contracts in Russia and Kazakhstan. The Israeli-based company was selected by investment fund Russian Friends Capital (RFC) to develop two the Atlantic salmon production facilities with a planned production volume of 2,500 metric tonnes each. Design work on both facilities is due to begin next quarter. The facility in Russia, Tuloma Salmon, will be located in the Tula region, a two-hour drive from the capital, Moscow.
Above: Gigante Salmon’s CEO, Kjell Arild Lorentsen Opposite from top: Kingfish tanks; Ostend harbour
In Kazakhstan, the facility will be located in an economic zone adjacent to the border between Kazakhstan and China.
We also learned that SalMar chief Gustav Witzøe was among the bigname industry investors behind a plan to build a large land-based salmon farm in the port of Ostend on the Belgian coast.
The company, Columbi Salmon, which is behind the project, had just completed a capitalraising exercise that netted NOK 162m (£13.5m). Among the participants are the Refsnes salmon farming family, Witzøe’s investment platform Kverva Finans AS and investment company Ferd AS.
SalMar recently strengthened its longstanding relationship with its longstanding relationship with Refsnes by buying 45% stake in the business.
The plan is to build a plant with a salmon capacity of 12,000–15,000 tonnes a year. In addition to fi sh, the plant will produce vegetables and lettuce based on waste from fi sh production.
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Even the water used for producing smolt will be used to grow salad vegetables using aquaponics. The Kingfi sh Company, another land-based fi sh farmer that specialises in the production of farmed yellowtail, came close to doubling its revenues year-on-year for the fi rst half of 2021. Publishing its H1 report, Kingfi sh said net turnover rose by 95% during the period and at a time when many restaurants in Europe and the United States were closed due to pandemic restrictions. It increased from €1.946m a year ago to almost €3.8m this time.
With investment still going into a land-based farm in the US state of Maine, the company is still not in profi t, however. It reported a consolidated loss of €3.56m, against a loss of €1.29m in H1 last year, but the company described the results as “excellent”. The Kingfi sh Maine farm will be similar to the system operated by the parent company in the Netherlands, using the same advanced technology solutions to minimise the impact of effl uent. In November, the Maine project received its state level permits, which means construction can now start on schedule.
Despite the increasing focus on RAS grow-out facilities, the technology is, of course, well established for hatcheries, and in August it was announced that RAS technology company Nofi tech had won a contract with The Scottish Salmon Company (SSC) to help redevelop SSC’s hatchery at the Applecross site in Wester Ross. The agreement was part of SSC’s £49m investment to create a state-ofthe art RAS unit. RAS technology, SSC said, would allow fi sh to be reared for longer in freshwater tanks before being moved to marine sites. Greater control of the freshwater rearing environment means that farmers can produce larger smolt, shortening the marine production element of the cycle and so reducing the biological risk of rearing in the sea. Ian Laister, Managing Director of The Scottish Salmon Company, said: “This contract marks the fi rst important milestone in our commitment to incorporate RAS technology across all our freshwater production, which is fundamental to our growth strategy. Nofi tech’s experience in this fi eld will ensure that SSC is at the leading edge of RAS technology not only at Applecross, but at future freshwater facilities.”
The programme to redevelop the existing hatchery at Applecross is intended to be the fi rst of three large hatcheries in Scotland, with sites for the other two still to be determined. In November, we also reported that Iceland’s Samherji was to expand its land-based salmon farm at Öxarfjörður in the north east of the country at a cost of almost £8.5m – or ISK 1.5bn. This should raise production to about 3,000 tonnes a year. The expansion, which should take about 12 months to complete, is a precursor to a much larger project to build a 40,000-tonne, geothermal-powered salmon farm at Reykjanes in the south west of the country. It is also part of the company’s intention to grow its still relatively modest aquaculture business. Jon Kjartan Jonsson, managing director of Samherji Fiskeldi, said planning work was nearing the completion stage so construction
Opposite from top: Jon Kjartan Jonsson; Bluehouse salmon, Atlantic Sapphire; Atlantic Sapphire Denmark site; Miami Bluehouse salmon
should start shortly, with completion expected within a year or so.
As part of an associated carbonoff set scheme, the company is planning to carry out land reclamation and forestry planting work. When up and running, fertiliser from the plant will be used for land reclamation and forestry work.
Nothing, however, sums up the rollercoaster ride that is RAS farming in 2021 as much as the saga of Atlantic Sapphire.
Back in February, all was looking good as Atlantic Sapphire announced it would be scaling up the second phase of its “Miami Bluehouse” salmon production at its Florida landbased farm.
The move was due to increase annual production from 15,000 tonnes gutted weight to 25,000 tonnes, with the fi rst fi sh expected to be stocked into the new fi rst phase facility by 2022.
In April, however, news broke that “technical problems” in the Florida plant had led to the loss of an estimated 500 tonnes of salmon, representing 5% of its expected initial harvest. The company said that the issue appeared to be in one of its RAS growth systems.
Further problems arose in August when the wave of Covid infections in the US led to a shortage of oxygen, driven by demand from the healthcare sector.
The company’s biggest problem arose not in Florida, however, but in its original facility in Denmark, which was all but destroyed in a catastrophic fi re in the early hours of 16 September. The cause of the blaze is still unclear.
Thankfully no staff members were injured in the fi re. Investors believe the likely insurance settlement of around US $33m will be ploughed into the land farm project now under construction near Miami.
CEO Johan E. Andreassen tweeted: “Heartbreaking to see a decade of game-changing innovation gone. Today, we’re relieved that there were no injuries and send our love to the team in DK. We’re proud to see the legacy of all the hard work in DK in the US, where the rest of AS is focused on one thing: EXECUTION!”
