Samherji ceasing operations at Hólmadrang shrimp-processing plant

Samherji is planning to cease operations at its Hólmadrang shrimp processing facility in Hólmavík, Iceland after years of losses.

Samherji subsidiary Snæfell took over operations of the then-shuttered Hólmadrang plant in late 2019, but has not been able to make the facility profitable, the company said.

Samherji said the Hólmadrang plant, which had 1,400 metric tons in production in 2022, lost ISK 205 million (USD 1.5 million, EUR 1.37 million) for the year, and its equity ratio averaged 28 percent since it was reopened, it said. 

In order to make it once again competitive, Samherji said it would need to invest at least ISK 500 million (USD 3.6 million, EUR 3.34 million) into the Hólmadrang plant. It said it decided the facility was not worth that level of investment, and will subsequently cease processing shrimp at the end of July, and shut down the facility.  

Samherji said the plant's struggles were partially related to difficulties sourcing raw materials. The company itself has no harvest rights, it said, and all materials the facility processed are imported, mainly from fisheries in northern Norway and Canada. The location of the facility is “unfavorable” and results in high costs for raw materials, and a lack of cold storage at the facility has meant raw materials have been stored in other parts of Iceland. 

High production costs were not helped by poor market conditions for cold-water shrimp, Samherji said. 

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