Bergen, Norway-headquartered salmon farming group Grieg Seafood announced on 11 October it has joined several other Norwegian salmon farmers in halting expansion plans in the wake of a proposed 40 percent resource tax on aquaculture operations.
Grieg's proposed expansion of a smolt facility in Lebesby, Finnmark, Norway – which the company said represents a NOK 1 billion (USD 93 million, EUR 96 million) investment – is being halted due to the "great uncertainty" related to the consequences of Norway's proposed tax. The expansion would have increased the production capacity at its Lebesby smolt facility to 6,000 metric tons (MT) and allowed for larger, so-called "post-smolt" production for farming. But that initiative is now on hold Grieg Seafood Finnmark Community Affairs Representative Roger Pedersen said.
"With the expansion of our smolt plant at Adamselv, we were to develop this venture here in Finnmark as well. Unfortunately, this has now been put on hold," Pedersen said. "It benefits neither the environment, the fish, nor the local communities in Finnmark, which now have fewer ripple effects than originally planned."
The company harvested approximately 22,900 metric tons (MT) of fish in the Q3 2022, which was 2,400 MT more than in the corresponding period of 2021 and 1,500 MT ahead of its previous harvest guidance for the three-month period.
According to the group’s latest trading update, its Norwegian farm sites of Rogaland and Finnmark harvested 6,800 MT and 8,200 MT, respectively, compared with 6,300 MT and 9,900 MT a year previously.
Its operations in British Columbia, Canada produced 7,900 MT in the quarter, up from 4,300 MT in the corresponding period of 2021, with the average regional farming cost in the three-month period hitting CAD 10.10 (USD 7.30, EUR 7.52) per kilo, up from CAD 8.50 (USD 6.14, EUR 6.33) per kilo in Q3 2021. The increase was due to biological challenges, including seasonal algae incidents, it said.
Grieg's farming costs averaged NOK 51.80 (USD 4.82, EUR 4.97) per kilo for Rogaland and NOK 48.10 (USD 4.48, EUR 4.61) per kilo for Finnmark, respectively.
Grieg’s complete Q3 2022 report will be released on 11 November.
Grieg harvested a total of 40,588 MT in the first six months of 2022. This contributed to earnings before interest and taxes (EBIT) before fair-value adjustments of biological assets of more than NOK 1.4 billion (USD 130.4 million, EUR 134.3 million), and was equivalent to an EBIT per kilo of NOK 35.50 (USD 3.31, EUR 3.41). Its H1 2022 profit before tax was more than NOK 1.7 billion (USD 158.3 million, EUR 163.1 million).
Grieg also posted its best-ever results for a single quarter in the second quarter of 2022.
The group’s production target for this year is 90,000 MT, with the longer-term aim to reach 130,000 MT by 2025.
Photo courtesy of Grieg Seafood
