Salmon Evolution chairman: Don’t discount land-based flow-through aquaculture

Construction is expected to begin later this year in Norway on what is pegged to become the largest land-based aquaculture facility in Europe.

More og Romsdal, Norway-based Salmon Evolution AS has raised NOK 50 million (USD 5.7 million, EUR 5.1 million) to begin development of an on-land facility to be built in Harøysund, Norway that will eventually produce nearly 30,000 metric tons (MT) of Atlantic salmon annually.

The company purchased a former quarry on the island of Indre Harøy in March 2019, a site that provides “optimal” conditions for the development of a facility equipped with flow-through technology, Salmon Evolution Chairman Kristofer Reiten said.

“We have unlimited access to clean and fresh seawater, adequate electricity supplies, our own deepwater quay and opportunities for expansion and growth,” he said in a press release. “In addition, we are optimally positioned in terms of distance to market.”

Romsdalsfisk AS, which controls Bud, Norway-based fish processing and distribution firm Vikomar AS, where Reiten serves as CEO, owns 60 percent of Salmon Evolution, according to a company’s financial statement. Minority shareholders include Rofisk AS, which owns wellboat operator Rostein AS and which secured more than 13 percent of Salmon Evolution; Terra Mare AS (10 percent); Artec Holding AS (4 percent); Kjølås Stansekniver AS (3.3 percent); Stette Invest AS (3.3 percent); Småge Eiendom AS (3.3 percent); and Salmoserve AS (2.7 percent).

“Our investment in Salmon Evolution is a clear signal that we want to contribute further to developing Norway’s fantastic aquaculture sector. Fish-farming along our coasts builds on clean and fresh seawater and, with Salmon Evolution’s location and choice of technology, we want to contribute to realizing Norway’s huge potential in aquaculture,” Rofisk Chairman Glen Bradley said in a press release announcing the ownership group in January 2019. “It was a requirement for us that the project builds further on today’s aquaculture industry, and we’ll see many common denominators with regard to specialists, suppliers and customers. That will strengthen Norway as a leading seafood nation in world terms.”

However, the vision of building a facility capable of producing the maximum amount of salmon allowed under Salmon Evolution’s permit – a standing biomass of 13,300 MT and annual production of 28,800 MT of salmon – is an expensive one, and is not yet financed. The company’s managing director, Ingjarl Skarvøy, who formerly worked as a regional manager at SalMar, estimated the project is likely to cost as much as NOK 3 billion (USD 343.4 million, EUR 305.9 million).

“We’re extremely pleased that the license is in place and that work on realizing this project can continue,” Skarvøy said. “We’ve had a good dialogue with those involved while our application has been under consideration and have received much positive response to our concept.”

Skarvøy was named chief operating officer of Salmon Evolution in February 2019 and the company announced the hiring of Odd Tore Finnøy as its CEO on Wednesday, 5 July. The company is still seeking a chief financial officer, and said it will be announcing appointments for other executive positions “in the near future.”

Reiten said the new management and the ownership group’s collective experience in the seafood and ocean-related industries will give it an advantage in moving from start-up to operational over the coming years.

“With shareholders and a board which possess solid experience from building up and running strategically important enterprises in this industry, we’re extremely well-equipped to enter the more operational phase,” Reiten said. “Our aim with the first issue has been to secure a long-term ownership constellation with heavyweight expertise. We’ve succeeded with that.”

The first stage of the project, which is scheduled for completion by 2023, according to Reiten – assuming the next share issue, occurring later this year, brings in the required funds – will involve more complicated decisions on technology.

“Producing salmon on land is about making technology choices which provide the most stable production environment possible for the fish,” he said. “Farming salmon on land is not a straightforward business, and involves to a great extent taking some technological choices which will yield the most stable possible production environment for the fish and thereby provide predictable operation. We’ve taken the best conditions the sea provides with us to land, and have therefore chosen the flowthrough system and CO2 aeration as our concept. Alongside our unique location with access to unlimited seawater, this is the main reason why we can now pick up the pace into the next phase.”

Recirculating aquaculture systems (RAS) have received much more media attention than flowthrough systems, Reiten told SeafoodSource at the 2019 Seafood Expo Global, but he said both technologies will prove successful.

“Both can and will succeed,” he said. “Right now, it seems like RAS is the only way to do things on land, but our plant is much less complicated because we don’t need a biofilter. Salmon likes to have a lot of water, and with our site, we have the possibility to give it that." 

Reiten cited both geographic and environmental factors in predicting a promising future for land-based aquaculture.

“The industry must expand, and to do that, land-based is the future. It will not be easier to find places to farm. On top of that, regulations will become harder and harder,” he said, referencing the ban the U.S. state of Washington placed on salmon net-pen aquaculture that goes into effect in 2025.

Reiten added that the company’s plan to pull water from the “deep sea” will help it prevent sea lice infestation at its new facility – sidestepping another major environmental problem facing net-pen salmon producers.

“We can produce salmon with a very small environmental footprint, and keep it biologically secure,” he said. 

Doing that will open up new sales avenues in a market where demand already far outpaces supply, Reiten said.

“There is stronger and stronger demand. Current production levels are nothing, absolutely nothing, compared to demand. Even if we were building 20 Atlantic Sapphires a year, that would not affect prices. If we were to make as much salmon as China does pork or the U.S. does chicken, that would maybe change things. But salmon is still such a small share of the market. It’s the only health food that’s farmed and good for you. I think we need to build a lot more of these land-based farms to keep up with growth.”

Photo courtesy of Salmon Evolution