Bakkafrost forging ahead with ambitious investment plan for Scotland operations
Faroese salmon-farming firm Bakkafrost is forging ahead with an ambitious DKK 6.2 billion (USD 886 million, EUR 833 million) investment plan for 2022-2026, with a heavy focus on Scotland.
In 2019, Bakkafrost purchased a majority stake in the Scottish Salmon Company for NOK 3.76 billion (USD 411.1 million, EUR 374 million at time of sale), making it Scotland's second-largest salmon farmer by volume. It has since renamed the operations to Bakkafrost Scotland. It has since announced a "One Company" strategy to unite its Faroese and Scottish operations.
Bakkafrost plans on building three new salmon hatcheries in Scotland with an annual production capacity of more than 18 million smolts. The company said growing larger smolts, with an average weight of 500 grams each, is key to its plan to farm salmon that need just one summer at sea to reach a harvestable size.
“Having large smolts in Scotland will transform the performance, lower the biological risk, and increase harvest volumes,” the company said in its Q4 2022 results presentation.
The investment will enable Bakkafrost to sustainably increase annual harvest volumes to 150,000 metric tons (MT) and achieve total annual production capacity across its value chain of 180,000 MT in gutted-weight of salmon by 2026. With the added production, Bakkafrost is planning to construct a new processing plant in Scotland to boost its onshore handling capacity.
Bakkafrost is also planning additional marine site development and the acquisition of new service vessels to help mitigate biological risks facing its salmon in Scotland and the Faroe Islands. The new boats will be equipped with freshwater treatment capacity and an in-line freshwater-based sea lice removal system to enable Bakkafrost to provide efficient and gentle dual-treatments for gill health and sea lice in one operation. Introduction of one such vessel in Q3 2022 has already helped to reduce mortalities at its Scottish operations, it said.
Bakkafrost’s long-term strategy is to sell around 40 percent of its salmon as value-added products on six- to 12-month fixed-price contracts. The company said that it has so far signed contracts covering around one quarter of its anticipated 2023 harvest volume.
Work on a staged expansion of its Applecross hatchery in the Scottish Highlands is progressing well, Bakkafrost said, adding that it expects to begin growing fish there this month as it wraps up its stage-four expansion. The first batch of large smolts produced by the facility will be ready to go to sea in Q2 2023, it said. Once all stages of the project become operational in mid-2024, the hatchery’s annual production capacity will be around 10 million smolts of around 500 grams each.
"We have made good progress with the implementation of our 'One Company' strategy, with which we merge the Faroese and Scottish organisations, building upon the strengths of both," Bakkafrost CEO Regin Jacobsen said. "Sharing knowledge and best practice is key to us, especially within the farming operation and large smolt production. The latter is very important as we prepare for the release the first batch of large smolt from our expanded Applecross hatchery in Q2 2023."
Bakkafrost confirmed it is also in the early stage of applying for planning permission to build a recirculating aquaculture system (RAS) hatchery at the Hunterston Port and Resource Centre (PARC), west of Glasgow, Scotland.
Company representatives will now engage with key stakeholders, including local community councils and the public, with the goal of building support for the project, which it said will be a biosecure, closed-system, energy-efficient, waste-reusing hatchery.
"In line with our approach to the development of our existing site at Applecross … sustainability and state-of-the-art technology will be at the heart of the process," the company said.
Since 2020, Hunterston PARC, close to the site of two decommissioned Magnox nuclear reactors, has been converted to provide useful space to projects focused on marine infrastructure, energy, transport, and connectivity, with the goal of making it a hub for the blue economy in the west of Scotland.
PARC already hosts a national offshore wind turbine test facility, a marine yard with a deepwater port, and one of Europe’s largest deep-water dry docks. It specifically highlights opportunities for aquaculture development on its website and promotes its partnership with Cumbrae Oysters, which recently doubled its rock oyster production space there on a 15-year lease.
Bakkafrost’s third hatchery, which is expected to deliver smolts from 2026, will be built somewhere in the north of Scotland, to serve farms in the Western Isles, the company said.
And in the Faroe Islands, Bakkafrost’s operations will ...
Photo courtesy of Bakkafrost