SalMar Aker Ocean absorbs Arctic Offshore Farming amid SalMar's pause in aquaculture investments

SalMar Aker Ocean has acquired 100 percent of the shares in Arctic Offshore Farming from SalMar.

In 2018, Norway Royal Salmon (NRS) was granted eight development permits for the development of Arctic Offshore Farming, with its facilities designed for areas with harsh weather conditions where standard farming equipment cannot be used. Arctic Offshore Farming has installed sea cages at an exposed location outside Tromsø in Northern Norway, but it delayed stocking the cages due to the Covid-19 pandemic but the farm is now operation. It is scheduled to produce 4,000 metric tons (MT) of salmon in Q4 2024.

SalMar absorbed Arctic Offshore Farming in 2022 as part of its acquisition of NTS in February 2022 and subsequent merger with NRS in November 2022.

SalMar Aker Ocean was created in August 2021 through a strategic partnership between SalMar and Aker with the goal of sustainably producing 150,000 MT of salmon per year at fish farms located in the open ocean. SalMar and Aker – through its wholly-owned subsidiary Aker Capital AS –  own 85 percent and 15 percent of the new company, respectively.

SalMar Aker Ocean now consists of four companies: the parent company, which runs the company’s development of offshore and semi-offshore aquaculture technology “to be able to produce salmon in areas that are currently not accessible using traditional farming technology,” as well as Ocean Farming, which is the owner of Ocean Farm 1; Arctic Offshore Farming; and Mariculture AS, which received clearance to establish an offshore farm in the Norwegian Sea in September 2023.

“We are very pleased that SalMar Aker Ocean is now the company with the widest experience in exposed salmon farming with two different concepts. This gives us valuable knowledge for the further development of aquaculture in exposed areas,” SalMar Aker Ocean Managing Director Roy Reite said in a press release. “The company has already built up unique operational experience through employees working with Ocean Farm 1 and the two units in Arctic Offshore Farming. This provides a good foundation for continuous improvement and development in order to be able to use new sea areas to produce food in a sustainable way.”

SalMar said in its Q3 2023 results it expects 7,000 MT of production its offshore operations in 2024. It posted a NOK 107 million (USD 9.9 million, EUR 9.1 million) loss in 2022, and has lost NOK 63 million (USD 5.8 million, EUR 5.3 million) thus far in 2023.

“The result in the period is better than in previous quarters as cost is allocated to the biomass after the third production cycle at Ocean Farm 1 commenced early May,” it said. “Planned harvest from Ocean Farm 1 is still on track for early 2024.”

However, SalMar said in its Q3 results it is pausing all investments in offshore aquaculture in Norway, without specifying whether that would include its semi-offshore Ocean Farm 2 and the open-ocean Smart Fish Farm. It said it required more certainty on Norway's regulatory framework, and specifically on its tax structure for offshore farming, before it could make further investment in its offshore development.

“Due to regulatory uncertainty, SalMar Aker Ocean has decided that further work on offshore aquaculture in Norway is currently on hold,” it said. “The company will now fully focus on growth semi-offshore and utilize the capacity of its existing two semi-offshore units for the production of sustainable Norwegian salmon. It will also continue to explore opportunities outside of Norway.”

Photo courtesy of Sarens