Cermaq is freezing investments in Norway as a result of the proposal for a resource rent tax.
“We will wait for a clearer understanding of the announcement last week and the final proposal for resource rent tax,” CEO Steven Rafferty said in a statement.
“Based on the new proposal, we have no choice but to put investment plans on hold. The proposal will affect growth and job creation in many coastal municipalities in which we operate.”
Earlier this year, Emilsen Fisk made use of an offer to purchase MTB at a fixed price of NOK 200,000 (€20,000) per tonne. In June, Nova Sea bought a one percent increase in the company’s existing licenses for a value
equivalent to NOK 53.4 million (€5.3 million).
Freezes millions in investments
Cermaq has invested more than NOK 5 billion (€500 million) in the two Norwegian farming regions of Nordland and Finnmark since 2016. The intention was to invest a similar amount in the coming years.
Cermaq Norway has 680 employees in Nordland and Finnmark. The company is one of Northern Norway’s largest aquaculture companies with four freshwater plants, 43 marine plants and two processing plants, as well as an exhibition center at Hamarøy.
“As a major employer in these municipalities, we want to contribute to growth. We planned a new hatchery in Hasvik municipality in Finnmark that would contribute 30 new jobs, but that project has now been put on hold,” he said.
No free licenses
Cermaq does not agree with the statement from the finance minister that salmon producers “have not paid for old licences”. The owner of Cermaq – Mitsubishi Corporation – bought the company in 2014 from the Norwegian government at market price. This price was based on the valuation of the company’s licenses. Growth in Norway has subsequently taken place through auctions at market price, most recently two years ago. The auction price was calculated based on the current tax regime. The new proposal provides completely different assumptions that will result in a significantly lower willingness to invest.
“When acquiring foreign-owned companies, risk is taken into account where there is a volatile economy or a politically unstable environment, where Norway has been seen as predictable and stable. In retrospect, it is difficult to understand that Mitsubishi should have considered the risk of such a radical restructuring of framework conditions in a country like Norway.”
Also read: “Will resource rent tax also change the position and competitiveness of Norwegian salmon?”
Profit invested in Northern Norway
“The vast majority of the profit in Cermaq Norway since 2014 has been reinvested in Nordland and Finnmark. Although Cermaq also has large operations in Canada and Chile, the majority of the funds are invested in Norway.”
“For many years, Norway has been a leader in research and development and innovation, and also by addressing sustainability and lower carbon emissions through new technology and large investments in this area.”
“There is little doubt that today’s proposal for ground rent tax will lead to less investment in Norway and more elsewhere. The new proposal will damage Norway’s position as a world leader in aquaculture. After many years of work in the global salmon industry, I have referred to Norway as a role model for other salmon countries to follow. This will not be the case in the future if the new regulations are maintained. There are many elements in the proposal that will negatively affect Norway’s competitive position as a leading salmon region. It could have been avoided if the proposal had been quality assured before announcement,” Rafferty concluded.
