BioMar halts all Russian trade, reports lower EBITDA in 2021

Aarhus, Denmark-headquartered aquafeed supplier BioMar Group has shut down all of its commercial trade activities within Russia in the wake of its invasion of Ukraine.

BioMar said the ban represents a major step for the company, as the loss of raw materials from Russia and lost sales volume will have a significant impact on its bottom line.

“This has not been an easy decision, but as a company driven by our purpose and values, we must take a stand. We believe it is our responsibility to make a positive impact on the environment and human rights around the world. Therefore, we will not collaborate with Russia while they are violating the sovereignty of Ukraine and causing a humanitarian crisis,” BioMar CEO Carlos Diaz said. “Unfortunately, our decision will have a significant impact on our customers in Russia, and it might impact our formulation costs going forward, but we needed to draw a line in the sand. We do not hold the Russian people responsible, and we will do what we can to find solutions for our customers and employees. Despite the impact we believe is the right thing to do.”

BioMar said all of its employees in Russia and Ukraine are being kept in employment and supported by the organization. 

On 4 March, the group reported record fourth-quarter 2021 volumes produced – at 405,000 metric tons (MT) – and record revenue of DKK 4 billion (USD 582.8 million, EUR 537.6 million), which it attributed to the performance of its salmon division and its shrimp business in Latin America. However, it also saw its bottom-line results affected by a global increase in costs.

“We, along with all other feed producers, are challenged by a situation no one has even seen before. Energy prices has been going through the roof, raw material prices have increased significantly, and logistic costs are at levels we have never seen,” Diaz said.“We are working with our customers to find sustainable commercial solutions going forward and we will probably need to look into a new generation of contracts where the volatility of the markets is taken into account to ensure an optimal pricing structure for our customers.”

The company’s earnings before interest, taxes, depreciation, and amortization dropped to DKK 911 million (USD 133.6 million, EUR 122.4 million), down from DKK 972 million (USD 142.5 million, EUR 130.6 million) in 2020, despite raising its revenue by 14 percent and its volumes sold by 8 percent.

In February 2022, the company announced a goal of becoming 50 percent circular and restorative by 2030, meaning it would source half of its raw materials from byproducts and waste streams, and would increase its is of microalgae in its feeds. BioMar further said it has begun using Corbion’s AlgaPrime DHA in its high-performance flagship diets and will prioritize the sales of its Blue Impact, Efico Enviro, and Orbit feeds, which it said have a higher sustainability profile.

“Microalgae has been a game-changing strategic ingredient for us for years, and still is. We are now delighted to increase the volumes we use significantly and raise the sustainability bar for our flagship products. Microalgae is no longer a novel idea, it has become a commercial reality,” BioMar Baltics Managing Director Anders Brandt-Clausen said. “We see this as the birth stage for the next generation feeds with a highly sustainable profile from Brande. Adding microalgae paves the way for the upcoming developments on our sustainable feeds that our farmers will directly benefit with a reduction in their own on-farm footprint.”

Photo courtesy of BioMar