The RAS producer of onshore facilities foresees that despite a challenging global economic situation, the pandemic can open opportunities for future RAS projects.
While the listed seafood companies are plunging in the global stock market and logistical challenges are straining for the industry, RAS (Rewcirculation Aquaculture System – ed. note) manufacturer AKVA group has experienced more companies showing an interest in embarking projects. Sales director believes this could be an act of wanting to protect local seafood markets against similar future situations.
“Many countries realise that they need to be able to produce fish after the COVID-19 crisis. Many large companies in the seafood industry have realised that the way ahead in production is to build more land-based,” says Jacob Bregnballe, Sales Director for AKVA group Land Based to SalmonBusiness.
Logistic challenges can boost industry
Although we are still in the crisis, Jacob Bregnballe believes the interest in future projects over the past few weeks has been growing. According to him, this could be an indicator that the crisis could result in more RAS projects in countries where logistical challenges hamper them in providing seafood to their citizens right now.
“Our projects have long time horizons. And it seems that several companies are now sitting down and thinking strategically and long-term about how they can handle should a similar situation arise again in a few years, he says, adding:
“Companies can see what logistical challenges this crisis has created, and therefore want to be able to grow locally, if something alike happens again,” he says.
Both Rabobank and DNB states that an interest in RAS could increase under the current conditions, where land based companies stock prices have been lowered and banks are experiencing big losses on loans. Both banks also believe that there is still a long way to go to find funding for the projects, especially under the current financial challenges.
“We haven’t yet been able to link any positive changes due to the corona virus. So there is no clear answer, because there is an expressed interest of more local production of seafood in the West, but at the same time the whole industry is fighting to have enough capital at the moment,” says Gorjan Nikolik, senior analyst in seafood at Rabobank.
Gorjan Nikolik still believes the industry is lacking a best-case scenario, before the barriers to land-based farming are broken down.
“We have invested in a small project, but many RAS projects are seeking capital, and it is an unsure market, which right now has a bad track record.”
DNB’s head of seafood, Anne Hvistendahl, is also sceptical about a higher interest due to the current crisis:
“It can be an argument, but there are still big funding issues that need to be addressed, and right now the market is under pressure, so funding will not be easy,” says Anne Hvistendahl.