Just six months after Norwegian aquaculture venture Norcod began commercial harvesting of its farmed cod, generating its first sales revenue, the company has landed a major contract with an unnamed Spanish retailer.
The initial contract with the supermarket chain is for 850 metric tons of cod at a fixed gross price of NOK 60.00 (USD 6.76, EUR 5.98) per kilo delivered, giving a total value of NOK 51 million (USD 5.7 million, EUR 5.1 million). Cod is the sixth-most popular fish in Spain, with consumption of more than 41,000 MT per year.
“This is an exceptional agreement, confirming our strategy to enter into fixed-price contracts, and even more so in that it will occur during the wild fishing season,” Norcod CEO Christian Riber said in a press release. “It also signals that we are achieving our goal to clearly differentiate our farmed cod from wild-caught cod, through the high-season, and at high prices.”
Harvesting of the first batch of Norcod’s cod is projected to continue until April 2022, when the company will have achieved its initial target volume of 5,000 metric tons (MT). Riber hailed the initial harvest as a “huge milestone” for Norcod, after four years’ effort to get the business underway successfully. It was considered to be particularly important given that cod farming had previously experienced a poor track record, and outsiders doubted that the price of farmed cod could compete with its wild-caught cousin, he said. He said the company said it has now comprehensively delivered proof of concept for cod farming in Norway.
“We are well on track to execute our long-term strategy to become the world’s premier supplier of high-quality, responsibly-farmed cod on a year-round basis,” Riber said. “Buyers are eager for our product, and we expect the market to grow as we grow.”
Norcod said it plans to start its next harvest in the third quarter of 2022. The company has an annual production target of 9,000 MT per year for 2023, increasing to 27,500 MT by 2025. This latter target has increased by 10 percent in light of a recent decision by Norcod to extend the at-sea growth phase to achieve an average market weight of four kilograms or more per fish. Norcod’s strategic partner, Sirena Group, runs Norcod’s sales and marketing efforts, and has positioned and branded Norcod’s fish as a high-end product.
“We expect to command higher prices in the market by delivering larger fish that are better-suited for filet production,” Riber said.
Given recent rises in the cost of raw material and transportation as a result of the COVID-19 pandemic, Riber said Norcod is expecting a 15 percent increase in capex, but he expressed confidence this will only have a limited effect on the business.
Photo courtesy of Norcod
