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Norway Royal Salmon targeting massive production increase with new projects

Company has been granted eight development licenses for its Arctic Offshore Farming project.

Norway Royal Salmon (NRS) is setting itself a milestone production target of 70,000 metric tons once its innovative new salmon farming projects come online.

The company has been granted eight development licenses for its Arctic Offshore Farming project -- equaling around 5,900 metric tons in maximum allowed biomass (MAB) -- which will be designed to cope with more harsh, exposed environments for salmon farming.

The project is currently in the design and testing phase, but NRS is targeting 2020 for the stocking the fish in the operation.

“It is an extremely exciting part of the future for the industry,” said Charles Hostlund, CEO of NRS, at the IntraFish Seafood Investor Forum. “There is lots of work to be done, but by the end of year decide we will decide exactly where to build it."

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The entire structure has a diameter of around 79 meters and weighs 2,500 metric tons, “so it is massive,” said Hostlund.

In addition to the Arctic Offshore project, NRS has also applied for six development licenses for its FlipCage project.

The concept is a “multifunctional, rotatable cage," which can alternate between open and closed operations.

Meanwhile, NRS’s salmon farming joint venture in Iceland, Arctic Fish, is also gaining traction and has “great potential for growing more," said Hostlund.

Combined with its existing farming operations, all of these additional future growth areas should help the company hit its milestone target of 70,000 metric tons.

Of this total, 5,500 metric tons will come from its Iceland operations and 55,000 to 60,000 from its farming in Norway.

For this year though, the company is guiding for a production of 36,000 metric tons from its farming operations and 4,000 from its associate companies.

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Hostlund added the company’s second-quarter figures, however, were “fairly disappointing” due to the impact of an ISA outbreak.

NRS posted an operational EBITDA of NOK 203 million (€21.3 million/$24.9 million) on revenues of NOK 1.2 billion (€126 million/$147 million) in the second quarter.

Operational EBIT per kg, however, fell to NOK 24.39 (€2.60/$3) compared with NOK 30.17 (€3.20/$3.70) in the same period a year ago.

Fast facts: Norwegian aquaculture development licences

  • Development licenses are a special scheme developed for salmon and trout farming in Norway
  • The purpose is to facilitate technology that can contribute to solving challenges in aquaculture
  • Licenses are granted free of charge, but can, after certain criteria are met, be converted to ordinary licenses for NOK 10 million (€1 million/$1.2 million) per license. One license equals 780 metric tons maximum allowable biomass (MAB)
  • The Norwegian Directory of Fisheries received more than 104 applications for 898 licenses, but the majority have so far been rejected

Source: The Norwegian Directorate of Fisheries / IntraFish.no

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