Finnish RAS trout farmer Finnforel hauls in EUR 45 million for expansion

Varkaus, Finland-based Finnforel has received a EUR 45 million (USD 52 million) investment to fund the growth of its trout-farming operation, including the development of Finland’s first selective breeding center for rainbow trout and a rapid expansion into global markets.

Finnforel, founded in 2017 by Kaj Arvonen, Pekka Viljakainen, and Petri Heino, uses recirculating aquaculture system (RAS) technology and an organic fish-production chain from egg to plate, with its trout sold in consumer-friendly portions.

Its new financing came from a EUR 34 million (USD 39 million) share issue, EUR 4.5 million (5.2 million) from the European Maritime and Fisheries Fund (EMFF), and EUR 6 million (USD 7 million) in bank loans. New shareholders in the company include Ahlström Invest, Finnish Industry Investment (TESI), the European Investment Bank (European Fund for Strategic Investment), Irish-French alternative investment fund The Good Investors, and European family enterprises.

Finnforel currently produces around 1,000 metric tons (MT) of rainbow trout per year in three pilot plants. The products are available in more than 1,000 grocery stores in Finland under the Saimaan Tuore brand and the company said it plans to begin exporting to the United Kingdom, Germany, and the Netherlands in December 2021.

“The consumption of fish is growing internationally, and I believe that more vigilant consumers will increasingly favor organically produced alternatives that are easy and quick to prepare,” Finnforel Managing Director Max Alfthan said.

Finnforel hopes to use the investment to grow better-quality, better-flavored, and more sustainable trout to bring products to a global market, Alfthan said.

“Only 0.1 percent of all the fish in the world is produced in an ecologically sustainable way. This is a massive EUR 300 billion [USD 345 billion] business that must change if we want to save our seas and lakes. I believe that Finnforel’s highly-refined model, which works without antibiotics or environmental emissions, can claim a significant part of this market,” Viljakainen, Finnforel’s chairman, told SeafoodSource. “Over the next decade, our mission is to bring Finnish genetics and fish-farming know-how to the world. In the future, fish will be farmed where consumers are.”

The company’s plans include expanding its operations from egg to plate, with a focus increasing its ready-pack production capacity at its Varkaus plant from one million to three million kilos, in a concept termed the “Finnforel gigafactor,” at a cost of EUR 25 million (USD 29 million). Work on the project is due to start immediately, Viljakainen said.

Talks are also advanced for gigafactor projects in Europe, Russia, and the Middle East, according to Viljakainen, who said the name of the facility was inspired by the "Gigafactory" developed by Tesla Co-Founder and CEO Elon Musk.

Vital to the success of the new projects is the EUR 12 million (USD 14 million) selective breeding center, which will produce broodstock and fry for RAS production on an industrial scale and have the capacity to supply a further six Finnforel gigafactor plants around the world.

Currently, the majority of eggs used in fish farming in Finland are imported, which leaves the country’s trout vulnerable to disease, Viljakainen said. He said Finnforel seeks better control of the breeding process in order to insulate them from this vulnerability.

“We work very closely with the Natural Resources Institute in Finland, which has been researching and breeding rainbow trout for 25 years and is currently using generation 15 broodstock. We want to improve further on this stock through genomic selection, to ensure we grow healthy, high-quality fish in our RAS farms,” he said.

Viljakainen said the company believes its gigafactor projects mark a turning point in trout production processes, and that the company is ready and eager to begin an expansion that will bring its technical and genetic knowledge to global markets.

“There is a lot of hot air talked about RAS production, but in Finland there is less talk and a lot of action,” he said. “Every single component of our RAS systems is in full operation in Finland. We have proved that it works, and works well, so we do not see any technological risk going forward. The future is exciting.”

Photo courtesy of Finnforel