March 24, 2020

By Lynda Kiernan

Salmon Evolution has raised NOK258 million (US$22 million) from both existing and new shareholders to support the development of its major land-based salmon farm in Fraena, Norway.

Ronja Capital, owned by Roger Halsebakk, the founder of Sølvtrans – the world’s largest wellboat owner – led the round, bringing its stake in the project to 19.6 percent. Romsdalsfisk brought its stake to 18.8 percent, Farvatn Private Equity now holds 14 percent, Rofisk holds 12.6 percent, and a range of additional investors hold shares of 7 percent, or less, according to Undercurrent News. 

It was in July 2018 that Salmon Evolution received approval and the appropriate licensing for the US$367.2 million project, with the goal of producing up to 36,000 tons of salmon per year. At the time, the endeavor remained unfunded. 

“We haven’t approached possible investors yet, but have noted great interest,” said Ingjarl Skarvøy, managing director of Salmon Evolution at the time. “We want long-term partners and investors who can help to develop our business model and a sustainable change of pace in salmon farming.”

Salmon Evolution plans to use “flowthrough technology” to reuse clean and fresh water from the sea off Indre Haroy in Hustadvika to provide the salmon being produced on the farm with “optional conditions for growth and good health”, according to the company.

The company estimates that funding needed for the first phase of construction, which will have a production capacity of 9,000 tons of salmon, will be NOK 1.3 billion (US$116 million).

”The decision by the present shareholders to provide us with further capital is a vote of confidence,” says Kristofer Reiten, chair of Salmon Evolution. “The experience and expertise possessed by the shareholder structure over the whole salmon value chain will make a big quality contribution to our future development.”

This construction is expected to begin in the second quarter of this year, with the introduction of the first smolts to happen in the fourth quarter of 2021, and the first harvest expected in the fourth quarter of 2022.

“We’re very gratified that we’ve attracted a number of industrial and capitalized shareholders with a clear foothold along the Norwegian coast and in our industry,” said Odd Tore Finnøy, CEO of Salmon Evolution.

“Our success in securing this capital injection in the present financial climate is a clear confirmation of our robustness. A strong network, expertise and financial room for maneuver will contribute to very exciting progress for us.”

Since 1980, global consumption of salmon has more than tripled as demand for protein also climbs. And as wild stocks grow more depleted, salmon farming is stepping in to bridge the gap between market demand and production, with expectations that the market volume will grow at a CAGR  of 3.9 percent between 2019-2024 to reach 4.7 million tons. 

This market outlook has made salmon farming a focus for investors and other large-scale farming projects as well.

It was only weeks ago that 8F Asset Management, the Singapore-based parent company of Pure Salmon, raised US$358 million to fund a global expansion that would see Pure Salmon RAS facilities established in Poland, Japan, France, and the U.S.

This capital is in addition to previous investments announced in support of Pure Salmon’s strategic expansion plans. In November 2018, 8F Asset Management announced its plans to invest US$162 million to build an industrial-scale salmon farm in Japan that was the first in a string of projects. 

In July of the following year, the company announced plans to invest $250 million to build a state-of-the-art RAS facility in Lesotho, Africa, in partnership with the Lesotho National Development Corporation (LNDC).

And in February of last year the company also announced that it had chosen Tazewell County, Virginia, as the location for its American site, which will be home to another 20,000 tons per-year RAS farming facility. At that time, it also chose Bologne-Sur-Mer, France, for its EU location. In the Middle East, Pure Salmon has opened a new Abu Dhabi headquarters in the UAE, which will include management, aquaculture technology development, sales and marketing teams, construction planning and execution activity, and finance and accounting.

Construction on the U.S. and EU sites is scheduled to begin in late 2020 with production of its first fish for commercial use to begin in 2023. Construction on the Japanese site is expected to begin within the coming months, and is also expected to begin commercial-scale salmon production by 2023.

More recently, only days ago, more news came out of Sweden, when Lighthouse Finance and the Municipality of Sotenäs announced a partnership for the development of a 75-hectare salmon farm that will cost as much as US$1.9 billion and be the largest of its kind in Europe.

Construction of the project is expected to begin in 2021, and will include two 40,000 metric-ton farming facilities, along with waste treatment plants, processing facilities, and feed production capacity, according to Seafood Source.

– Lynda Kiernan is Editor with GAI Media and daily contributor to the GAI News and Agtech Intel platforms. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.