July 15, 2024

By Gerelyn Terzo, Global AgInvesting Media

Iceland-based Laxey, a sustainable operator of land-based fish farms in Vestmannaeyjar, also known as the Westman Islands, has successfully completed an EUR 6 million equity private placement to finance the construction of phase two of its head-on gutted (HOG) land-based salmon production facility. The project is designed to meet strengthening global demand for salmon, which has been outpacing supply, owing to a combination of biological headwinds, a booming population and better quality of life.

Participants in the round included Farvatn Private Equity and Kontrari, both of which are Norwegian-based family offices with experience in seafood investing, in addition to existing investors and employees of the firm. The latest funding round comes on the heels of a EUR 40 million private placement offering by Laxey that closed in April and allows the company to advance its salmon project.

Land-based fish farming is a nascent market representing a sustainable way of producing food, using recirculated ground water to protect both the environment and the animals being harvested. Iceland’s fish farming industry has been under pressure since last year, owing to difficult biological conditions including a sea-lice outbreak that have led to higher salmon mortality rates than normal. As of early 2024, Icelandic salmon deaths reached close to 2 million compared with 1.3 million in early 2023, according to the Iceland Food and Veterinary Authority.

Laxey, which was established in 2019, is a hybrid of fish industry tradition and Iceland’s modern land-based aquaculture. The company is developing a 32,000 ton-per-year fish farm dedicated to salmon production, which has the potential to create 100 direct new jobs in the region. The company says its early salmon batches are “thriving in the hatchery,” which has been operational since November 2023. Meanwhile, further construction of the facility is unfolding at the intended pace, with development “well underway.” Laxey expects the hatchery to be “fully commissioned” this month to achieve a total capacity of 4 million 100g smolt annually.

The salmon farming facility has integrated hybrid-flow-through technology with 65 percent reuse in which clean seawater is pumped through the station and cleaned before being redirected to the sea. This system allows Laxey to harness favorable local conditions for biosecurity and building expenses. The fishing station’s first grow-out tanks were raised last month while the smolt insert is planned for the fall. The fresh capital will allow Laxey to commence construction of phase two of the project.

Prior to the latest funding rounds, Laxeys’ project relied largely on funding provided by the local Óskarsson family, which boasts 75 years of fishing experience and is similarly based on the main islands. The recent capital injections allow the company to secure a diversified shareholder base, giving it runway to finance future operations.

Laxey Chairman Lárus Ásgeirsson explained, “Continued demand from prominent investors reflects the quality and hard work in Laxey. Along with the commencement of construction for Section Two, we believe these investors bring experience and additional competence to our project. Now it is up to us to deliver on construction and farming. It is truly exciting to watch the daily progress of the project and with the first grow-out tanks being erected a few weeks ago we are on good track to deliver the project on time.“

In the latest funding round, Arctic Securities served as the sole global coordinator and bookrunner in the private placement, while Mar Advisors provided financial advisor services to Laxey.

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