Bíldudalur, Iceland-based salmon-farming company Arnarlax has signed a declaration of intent with officials from the Vesturbyggð municipality to build a 10,000-square meter high-tech processing facility in Patreksfjörður, in Iceland's Westfjords.
The new processing plant will have an annual processing capacity of around 80,000 metric tons (MT) of fish, and will employ around 100 people, the company said. Arnarlax said it has not yet set a date for construction to begin. Its next steps are to conclude agreements, draw up a new zoning plan for the area, and prepare for construction by demolition, relocating existing operations, and develop plans for further infrastructure in the area.
Specifically, Arnarlax is investigating how it can best utilize the current infrastructure in Bíldudalur for further development. The company said it intends to demolish the current facility on the site and build a large ship quay and a waiting dock.
The letter of intent also stipulates that an agreement will be sought with Vesturbyggð on the settlement and payment of outstanding claims for catch fees, which have been pending before the Westfjords District Court recently. Arnarlax said it is pursuing a long-term agreement with the municipality to resolve the catch fee issue.
"I am very pleased with this landmark agreement with Vesturbyggð. This is the first step of many, but the declaration of intent allows us to start formal permit applications and design and preparation work for the construction of a high-tech processing house in Patreksfjörður, which will create many valuable jobs. The investment will also strengthen the industry's competitiveness and strengthen the position of aquaculture in the Westfjords for the future,” Arnarlax CEO Björn Hembre said.
Vesturbyggð Mayor Rebekka Hilmarsdóttir said the announcement was "important [for] future development in the southern Westfjords."
“Aquaculture is the largest industry in the region, and it is important that there is now a future vision on both sides for the continued development of aquaculture and related activities in Vesturbyggð,” she said.
Arnarlax currently holds licenses amounting to 25,200 MT of maximum-allowed biomass (MAB) in the Icelandic Westfjords and is now building an additional three farming sites within its existing licences. The first of these three sites have been advertised by the authorities and is expected to be issued in the second quarter of 2022.
Meanwhile, Arnarlax’s application for a 10,000-MT farming license in Ísafjarðardjúp is ongoing, and a decision is anticipated to be issued this year. Its application for additional biomass of 4,500 MT in Arnarfjörður has been delayed; however, and the company’s management is currently working on updating and resubmitting the application.
Icelandic Salmon AS, which owns Arnarlax and is part of the SalMar group, harvested 3,400 MT of fish in Q1 2022, representing an increase of 34 percent from the 2,500 MT in Q1 2021.
During the first quarter of 2022, Icelandic Salmon reported an operating income of EUR 37.1 million (USD 39.2 million), a 114 percent increase from Q1 2021.
In the quarter, operational EBIT amounted to EUR 9.5 million (USD 10 million), up from EUR 400,000 (USD 423,073) in Q1 2021. This resulted in an EBIT per kilo of EUR 2.82 (USD 2.98), up from EUR 0.15 (USD 0.16) in the corresponding period of last year.
Delivering the company's Q1 results, Hembre, who is also CEO of Icelandic Salmon, said the group started 2022 with a good price achievement and strong operational performance.
“We have been through winter months which show us that the mitigating measures implemented to prevent mortality during winter are working, even if we have seen some increased mortality on a few sites,” he said. “This is an exciting time for us, and I look forward to providing the market quarterly with additional updates on the operational performance. With the majority of volumes sold in the spot market, Icelandic Salmon will be exposed to potential volatility in market prices. However, we firmly believe that operational performance will still be strong, and think we have some exciting quarters ahead of us.”
Icelandic Salmon continues to deliver filets and HOG fish via boat to North America and has reported “increased high-end customer demand” in the market, while Europe continues to be its main export destination.
Photo courtesy of Arnarlax
