Nine years after starting the planning process to farm salmon in the open ocean off the coast of New Zealand, New Zealand King Salmon (NZKS) has received full governmental permission to proceed.
NZKS produces premium king salmon sold through multiple brands, including Ōra King, Regal, Southern Ocean, and Omega Plus. The latest approval will allow it to farm king, also known as Chinook salmon, seven kilometers off the coast of Cape Lambert, New Zealand, in the Cook Strait, in an operation it has dubbed Blue Endeavor.
“From here, we will complete our 18-month program of rigorous benthic (seabed), seabird, and marine mammal monitoring. This will provide a baseline of information, against which we can measure the impacts of a working salmon farm,” NZKS CEO Carl Carrington said in a release. “The next step will be a ‘proof-of-concept’ phase, putting in the trial pens from June 2025. This is when it starts to get exciting from a farming point of view – building a smaller-scale pilot farm so that we can trial new infrastructure while monitoring the welfare of our salmon to ensure they can thrive.”
The company applied to the Marlborough District Council for a 35-year resource consent to build the open-ocean farm in 2019, with then-CEO Grant Rosewarne calling open-ocean farming an “incredibly exciting opportunity” for the company. At the time, NZKS said it hoped to open the farm by the end of 2020 or the beginning of 2021.
The Covid-19 pandemic put a damper on its plans, as well as the company’s bottom line. Its operating earnings before interest, taxes, debt, and amortization (EBITDA) in FY2021 dropped to NZD 10 million (then USD 7 million, EUR 6 million) compared to NZD 19.6 million (then USD 13.8 million, EUR 11.7 million) the year before. Then in FY2022, its performance dropped further, with the company posting a NZD 24.5 million (USD 14.9 million, EUR 13.7 million) loss in the first half of the year.
The losses had the company turning to a share offer to pay off debt, and it ended up reducing its staff by 20 percent to return to the black in FY2023. It suffered
That trend of hot summers has continued and is partially the driver behind NZKS’s push to farm offshore.
“Climate change is very real, and we have felt its impact in the Marlborough Sounds over the past couple of summers,” former NZKS Chief Operating Officer Alan Cook – who resigned in 2020 – said in 2019 during its push to get the resource consent.
Offshore farming presents a way for the company to continue farming salmon in New Zealand while avoiding the difficulties of warming waters, according to NZKS.
“When we look to the open ocean, we are looking at the future for salmon farming in New Zealand – in cooler, deeper waters,” NZKS General Manager of Aquaculture Grant Lovell said. “It is a bit of a new frontier for our aquaculture industry – but one that we are entering one step at a time, backed by science and evidence-based decision-making.”
NZKS said it has undergone extensive planning, comprehensive assessments of the environmental effects, and research from multiple institutes over the last several years in preparation for farming salmon offshore.
“Putting fish pens out in the open ocean is not for the faint-hearted. We will be working in a dynamic environment, with waves up to 10 meters high – anyone who has caught the Cook Strait ferry knows what we are talking about,” Lovell said. “We will be trialing technologies and investing in mooring grid infrastructure to ensure we are able to adapt to the Cook Strait conditions.”
The company said it plans to have two blocks of net pens, each with 10 circular net-pens in a two-by-five layout. In total, the farm will equate to less than 12 surface hectares in size. The production goal of the farm is 10,000 metric tons (MT) of salmon harvested annually. NZKS said that, when fully operational, the facility could generate as much as NZD 300 million (USD 182 million, EUR 168 million) in new revenue per year.
Carrington added that the company is optimistic about the future of open-ocean farming, but it is still a ways away from launching its farm.
“We will dip our toes into the open ocean – to carefully realize Blue Endeavor’s potential – while continuing to talk to local communities, iwi, and others who also have key interests, rights, and values around the ocean,” he said. “While we have some way to go until Blue Endeavor is fully operational, today is a day for our company to celebrate the successful completion of this chapter.”
