September 5, 2018 / 4:20 PM / 3 months ago

Grieg Seafood aims to boost salmon production

OSLO, Sept 5 (Reuters) - Norwegian fish farmer Grieg Seafood plans to boost salmon production by a third by 2020, in part by delaying the transfer of smaller fish to the sea and monitoring them more closely to reduce mortality.

Global production of salmon is about 2.5 million tonnes annually and Norway produces about half of that. Increasing demand, from the EU, Asia, and the U.S. helped push up prices earlier this year.

Grieg, the world’s eighth biggest fish farmer, wants to boost production to 100,000 tonnes of salmon in 2020 from 75,000 tonnes in 2018 helped by higher smolt size, lower mortality and digitalisation, CEO Andreas Kvarme told analysts at a capital markets day on Wednesday.

“Economically the most costly to our operation is fish dying.”

“We aim for a survival rate of 93 percent. We are not there today but Finnmark (in Northern Norway) and British Columbia (in Canada) is already there, while Rogaland (south west of Norway) and Shetland (Scotland) has a way to go,” Kvarme said.

The average mortality rate for the industry is about 15 percent, according to the latest figures from Seafood Norway, a union for 550 Norwegian seafood companies.

A key part of the plan is to the increase the size of the smolt, which are small salmon, to 230 grams in 2020 from 142 grams in 2018 before being transferred to the sea from fresh water in facilities on land.

“This will lead to a more efficient production cycle,” Kvarme said.

“We have 50-60 initiatives around the company for improvements and cost cutting,” Kvarme said.

A part of this is digitisation of the production process by using sensors to monitor the fish which should help prevent diseases and optimise feeding.

Sea lice, gill problems, pancreas disease, infectious salmon anaemia and algae blooms are all problems that have hit the salmon industry in recent years.

“When we are summarising our costs would be 37.9 Norwegian crowns per kilo in 2020, down 5 crowns from top level in 2017. Already this year we are at 42.7 crowns, which is down from 2017,” chief financial officer Atle Harald Sandtorv said.

He estimated the average industry cost will be 38 crowns per kilo in 2020, “flattish or a little bit down” from the current level.

Reporting By Ole Petter Skonnord; Editing by Elaine Hardcastle

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