Marianne Naess is the commercial director for Nordic Aquafarms Inc., a Norway-based company planning a salmon recirculating aquaculture system in Belfast, Maine. The facility, to be completed in phases, will be an investment of roughly USD 500 million (EUR 438 million), and is expected to produce as much as 33,000 metric tons of salmon annually. Naess sat for an interview with SeafoodSource at the company’s new offices in Portland, Maine.
SeafoodSource: Why did you choose to use a RAS system?
Naess: If you take the big picture, seafood production needs to double over the next decade or so. There are limited opportunities in sea pens due to the biological and environmental problems, and also where you can actual grow the fish, which would be Norway, Scotland, Canada, Chile, New Zealand, etcetera.
So land-based, or going off-shore, would be the new approaches to the market. RAS is not a new development, it has been going on in smaller facilities for a long time, and the technology has improved substantially over the years, and you also have smaller grow-out facilities.
I think the reason why you see several companies coming into the U.S. now is, it’s a huge market. You import 90 percent of your fresh seafood, so the market potential is there. You eat a lot less fish than everyone else, and there is also a growing trend where millennials and younger people are shifting toward a healthier diet. So I think you can probably increase fish consumption as well. There is room for a lot of these companies right now. That, combined with the technology being more mature, is one of the reasons why you see companies coming into the U.S. It’s just by coincidence that they’ve come at the same time.
The technology has matured from the flow-through systems to the recirculating systems. The technology is proven, on a smaller scale. We’re, of course, making this a larger facility. What I think a lot of people don’t realize is that although these tanks are larger than the ones we already have – they increase every time we make them, and we improve the technology each time – we’re basically replicating the tanks several times, and then you get the benefit of the economies of scale on the infrastructure you build around the facility.
Another important thing is, the cost of sea pens will be at parity with the cost of RAS systems right now, and that’s due to the increasing cost of sea pens and the decreasing cost of the RAS technology.
SeafoodSource: What drew Nordic Aquafarms to this site in Maine, in particular? Why not put it right next to the biggest market, say New York City?
Naess: We did a scientific search. We used a consultant partner here in the U.S., and did a search from the Canadian border down to Washington D.C. There are a lot of parameters that need to fall in place, two keys being access to clean seawater and access to enough clean freshwater. There is a lot of pollution from old mills, and if you go to more populated areas, say in New York, you need to have enough access to fresh water and clean water. Also, the property will be more expensive in New York and New Jersey than up here.
So it’s a combination of having a nice community where people can live – and actually want to live and work – and access to fresh cold water, as it is a cold-water fish. Plus, Maine’s history is seafood history, and the branding potential here in Maine compared to, say, Florida, is better, which we think is important. The site also has a good proximity to the market.
No site is perfect, but it met most of the criteria. We could have looked at brownfield [sites], but there were a lot of pollution problems, so this came out as the best site, in our opinion.
SeafoodSource: How long did that search take?
Naess: About half a year.
SeafoodSource: When you were done that search, was that the point you were ready to announce the project?
Naess: I wasn’t part of the company back then, but you basically have a long list, and narrow it down by going to visit the sites and starting to talk with the cities, or the communities. Of course we started talking to the city before it was announced, because you always want to do your assessment and your due diligence before you announce something.
SeafoodSource: Are you bringing the same exact process and technology you use in your RAS facilities in Denmark and Norway, or have you innovated?
Naess: For every facility that we build, we improve it. The new facility in Maine will be different, and improved versions of the ones that have been built. It’s being built step-by-step. Each time you learn from the other, and you make improvements, and improve the next phase or the next project. That’s also why we have a good track record, we’ve done this before. We’re quite confident that it will work.
SeafoodSource: What is the timeline going to look like?
Naess: The project in Maine, it is in two phases. Hopefully, we will be construction ready by summer, and then we start with the smolt facility, and the grow-out tanks. Construction would probably be 18 to 20 months, or a year-and-a-half to two years for the final completion of the phase one.
Whether we’re going to start phase two immediately depends on phase one and the developments. We have said initially that phase one and two will be within five or six years.
SeafoodSource: Who is funding the project, is it investors, or the company itself?
Naess: It is investors, yes. As of today, they are all Norwegian, further down the line we might bring on some U.S. investors that would make sense. As of today, it’s Norwegian.
SeafoodSource: Is it planned potentially to be publicly listed?
Naess: Yes it will. Eventually.
SeafoodSource: Is there going to be any grants or incentive programs for this?
Naess: We are looking at all kinds of grants that we would qualify for. I just came from a meeting looking into grants, of course the facility is in the [reduced-tax] Pine Tree Zone for example, and the other kinds of grants that we would qualify for, sure we will look into.
SeafoodSource: But they’re not necessary for the viability of the project?
Naess: No, they’re not.
SeafoodSource: How do you think the local outreach process is going? I know from the start that it seemed like Nordic Aquafarms was very proactive. Do you think that’s going well, or do you think there’s some resistance?
Naess: There is some resistance, there’s a small group, it’s quite uncertain how big it is. There’s one candidate opposing the project running for city council and there are two write-in candidates as well. I think the election on 6 November will be sort of a referendum, because they’re fairly single-issue politicians. That will be interesting to see. My impression is that the city, the politicians, the city officials, local citizens, are very accommodating and welcoming to the project. It seems like that’s the vast majority in the city.
We have been having a lot of public meetings and stakeholder outreach. A lot of people were sitting and waiting for the actual numbers in the permits, so we had a public meeting for the discharge permit on 4 October. Which I think a lot of people sitting on the fences, kind of supporting it, but not committing publicly to it, they were relieved to see the numbers and what we are actually discharging into the bay.
It is a good project as far as tax dollars and infrastructure in the city. They need jobs, they need income.
SeafoodSource: Is it going to be a green energy facility?
Naess: We are cleaning our discharge, some if it is cleaner than the actual bay to start with. I think a rough comparison is that this will be plus or minus 10 drops of water compared to a full bucket of water. The bay is big.
But of course, we are concerned about pollution. We’re drawing water from the bay, so we don’t want to pollute it. We don’t want to pollute our marine water source, and not for the community either. We want to be a sustainable company that produces sustainably. I think there are also questions in the community regarding water withdrawal as well. We don’t want to deplete the aquifer, because we need access to the water 24/7. It’s not an option.
People say, “What if it’s depleted within five years?” If we can’t show guarantees that this is sustainable to our investors, we wouldn’t get that kind of funding.
SeafoodSource: What about the sustainability of the salmon?
Naess: People want to know, "Is this healthy for me? Is this good for me?" I think that’s number one. Number two, "Is it produced with the lowest possible impact on the environment?" And number three, "What’s the individual welfare, how is the animal, the fish, being treated?"
If you have a brand promise, if you actually promise that you have a healthy, non-GMO, hormone-free fish produced in a sustainable manner, with a high fish welfare, then you need to deliver that process, on those promises.
There are issues with traceability today, and it’s going to be fairly transparent. I think that’s what the consumers want as well. You don’t want to break those promises, then you won’t be able to sell the fish at the price you anticipate. To me it’s kind of a given that you need to work hard to be a sustainable company.
SeafoodSource: Is that part of the marketing strategy for this product? Is sustainability a big part of what you want people to understand about what you’re doing?
Naess: Yes, definitely. Of course, the health aspect and the taste and the flavor of the fish, the texture of the fish, the quality of the fish are part of it. The consistent quality of the fish, and how it’s produced with high environmental standards and a low carbon footprint. But also, with high fish welfare, which actually makes the fish better, and tastier. That’s definitely a promise.
SeafoodSource: Could you describe the processes the effluent will go through?
Naess: Yes, they are treated through a microfilter, and also a UV treatment. There are several level of treatments. For the total suspended solid, it’s cleaner than the water in the bay. Ammonia, it’s cleaner, we are removing 99 percent of the phosphorus, and also the BOD, and 85 percent of the nitrogen, which is a very high standard.
SeafoodSource: What do you do with waste that’s removed?
Naess: I feel like in other countries or other places you’d have a whole industry that could make fishmeal, or fish oil, and animal feed basically from this. So, you don’t see that here in Maine yet. I think what we’re interested in, and looking at regulations, to see if it’s clean enough to get certified as lobster bait. We are contacting some of the organizations right now, and wanting to see if we can work with local processes. Of course, we won’t have any byproducts in the market for a few years, but these processes take time, so you have to start working on them right now.
SeafoodSource: What about fish byproducts - are you processing the fish on-site?
Naess: We’re going to process the fish, we will have cut-offs, we will have fillets. There will be guts, and cut-offs, from my understanding it’s an easy process to make it into lobster bait.
SeafoodSource: Is the stock North American Atlantic salmon, or Norwegian Atlantic salmon?
Naess: It depends on where you get the eggs from. You need an egg import license. We will be working on that, but that will be part of the permit process that we will go through as well.
SeafoodSource: Speaking of all the regulations, aquaculture licensing in the United States is the farthest thing from a clean process. What’s the progress been like?
Naess: Permitting is quite complicated here in Maine. I think the difference from what we’re used to is that it requires a lot more work upfront before you can submit your permit, and it’s also higher risk. The investments before you actually get your permit is a lot higher than what we’re used to in Norway, and it’s complicated and time-consuming.
There’s also the risk that anyone who doesn’t like the project can appeal it and delay it. That’s a risk, not just to business but also to the state. If Maine wants to attract investments, foreign investments, larger investments, they need to make sure permitting is easier than it is today.
SeafoodSource: Does salmon pricing affect timelines or the project itself, or do you see such an advantage being in the market without shipping costs that it will work regardless of pricing?
Naess: I think it will, because demand is outgrowing supply. You are importing a lot here to the U.S. We have a long-term cost advantage, we don’t have to pay for the air freight getting it fresh into the market will be cheaper, and there will be developments into technology.
I know there are efforts to bringing down the costs and treating the environmental problems they have in sea pens as well, but I think the prospect of increases that need to take place in seafood production, and where we can get that increase from, will mostly be land-based aquaculture and off-shore aquaculture. The prices go up and down, but long term they are quite stable and predictable.
SeafoodSource: Is all of the salmon from this facility going to be sold in the United States?
Naess: That’s the plan, yes.
SeafoodSource: Do you think you can get a premium for the product?
Marianne: That’s also the plan. We will get a premium. We do back in Europe. If you look at the quality of the fish, you have high consistent quality, the texture of the fish will be firmer because they swim constantly, the flow of the tanks will be like swimming in a stream. You can compose your feed to get the right flavor to the fish, it’s gently harvested. The off-purging as well will take off the bad flavors.
The way it is processed, it will be a high-quality fish, and it’s local, and can be obtained super-fresh. Theoretically, you may harvest it in the morning, and have it in New York at night, fresh. That’s probably as fresh as you can get into this market. Even if you fly it in, it’s going to take longer.
SeafoodSource: Are you looking at any certifications?
Naess: I think if there were any certifications that would apply. So far, you don’t have any organic standards here in the U.S. What we can promise is we control the fish from the egg to the harvest, so it’s going to be full traceability, and also transparency with regards to all the tests we have to take, the feed we’re feeding the fish, what kind of components we use. It’s going to be quite high transparency and traceability of these products.
SeafoodSource: What kind of feed do you plan to use?
Marianne: We haven’t decided the feed yet. We will not need it for a couple years, and there are a lot of developments in the feed industry. Insects and other proteins could be potentially beneficial. What we have said, is that we’re not going to use any GMOs. We want to stay away from the most controversial products both in plant based and sea-based proteins. I think the choice will be made will be the best possible solution we can find a couple years from now.
SeafoodSource: How is your relationship with the two other companies [Whole Oceans, Atlantic Sapphire] doing basically the same things in the states?
Naess: I think there will be more communications going forward. There hasn’t been that much so far. I hope they will succeed and do well, because there is room for all of us in the market. If anyone fails, that’s going to be associated with the whole market, because people aren’t going to be able to differentiate between the suppliers at this point. I hope they will succeed, because that’s the best for all of us.
SeafoodSource: You don’t think that will bring too much salmon into the market at one time?
Naess: No, because the consumption today is something like 400,000 plus [metric tons], we’re producing, many years from now, 33,000 [MT].
They’re producing, they said they’re applying for 5,000 [MT] initially, they said [max production] 50,000 [MT], Atlantic Sapphire is starting with 10,000 [MT] and said [max production] 90,000 [MT], that’s maybe a third of the market, and the market is growing, and you import 90 percent. I think there is room for a lot more in addition to this. Having said that, I think there is better branding to go along with the Maine salmon, versus the Florida salmon.
SeafoodSource: Are you going to bring Maine into the branding at all?
Naess: I would think that would be a part of it, yes. If you see, we have our posters outside, it says locally-produced Maine product. I think the long heritage we have in the seafood industry in this state, and the image, and the cleanliness compared to other states, the more pristine setting, I think will be good for the brand.
SeafoodSource: How is the relationship with the state of Maine so far? Have state officials been good to work with?Or hard to work with?
Naess: They have welcomed us. Both [U.S.] senators, the governor, the congressmen. At all levels, people have been very accommodating, and friendly, and welcoming.
SeafoodSource: Except for a small group of people in Belfast, do you think you can win those people over?
Naess: I went to the city council debate, and someone in the audience asked the supporters and opponents, “What would make you change your mind?” The opposed said, "Smaller, local, it’s just too big, it’s changed the character in town.” I don’t think it will. I don’t know whether we can convince them, but I think it’s part of democracy. I think it’s a strength that you can actually have an open discussion, and people asking critical questions. That makes us better as well.
I think the most frustrating part of it is that we see a lot of conspiracy theories. Like a rumor we were having problems in France. We’re not in France, I don’t know anything about that. I heard yesterday that, “They have problems in Scotland,” but we’re not in Scotland either. I think that as long as it’s a fact-based, and open discussion, it’s good. That’s what makes Western societies good, democracies good, that people can ask questions.
What I think hasn’t been discussed is that this is putting Maine on the map internationally in terms of an innovating industry, which can benefit all of Maine.
SeafoodSource: At the beginning of this conversation we mentioned the election coming up. Do you have a preference in the outcome? As a corollary to that, do you have contingency plans if the write-in candidates or anti-project groups get elected?
Naess: I think in the city, they’re pretty confident, and I have to trust them in their assessment. I think it would be very unlikely that all three opponents would win, and they would need the majority. I’m feeling confident that we’ll get through this.
When it comes to governor, I think we feel good about whoever wins the election, we don’t have an official position on that. Whoever wins, we’ll work with. I think they’re all supporting it.
