Atlantic Sapphire will upsize its Florida faciltiy to 25,000 tonnes of annual harvest

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Atlantic Sapphire announces plans to upsize its US ‘phase 2’ expansion of the Miami Bluehouse, increasing the annual production and harvest volume of the combined phase 1 and 2 by approximately 15,000 tonnes (HOG) to 25,000 tonnes (HOG).

The first fish is expected to be stocked into the new phase 2 facility in 2022, with increased harvest volumes starting in 2023.

Phase 2 will be integrated with phase 1 production, as the fish will hatch and grow to smolt size in the existing phase 1 smolt facility, then be transferred to phase 2 for the mid-cycle stage (0.3 – 3.0kg) before finally being moved into the existing phase 1 grow-out tanks for the last stage of its life cycle. This is advantageous, as the existing phase 1 has sufficient smolt, harvesting and filleting capacity to support the full 25,000 tonnes, the company said in a statement.

Further, increased smolt production while phase 2 is being constructed allows for rapid utilization of the new phase 2 capacity, decreasing construction completion to harvest ramp-up by approximately 10 months.

The phase 1 grow-out systems are designed for large fish (3-5kg), and the
Company will optimize production by stocking mid-sized fish with higher specific growth rate (SGR) in tailor-made systems in phase 2. The ratio of filtration capacity versus tank size will improve for the combined phase 1 and 2, allowing for a higher JEA index (kg yield/m3 tank volume/day).

Consequently, phase 2 will be a less complex project as compared to phase 1 with a lower capex per kilo of incremental production.

Phase 2 will include centralized functions for sludge treatment, maintenance and energy, as part of the Grand Master Plan. These will be based on a modular design that allows for rapid expansion in future phases, reduces operational complexity and improves reliability.

The company is currently working on the design, construction plan and budget for the expansion and expects to announce more details in Q2 2021.

In connection with the revised US phase 2 buildout plan, Atlantic Sapphire has modified the commitments under its existing credit facility to better align with its projected liquidity requirements for 2021, thereby reducing projected financial costs associated with its debt financing.

As part of the strategy to increase its access to lenders, the company has
syndicated a portion of its existing credit facility to Farm Credit. The company is planning to syndicate additional portions of the facilities once the final budget and construction timeline for phase 2 is completed.

Johan E. Andreassen, Chairman of the land-based fish farmer commented: “We’re proud to get Farm Credit in on the lender side together with DNB, supporting our current and future growth ambitions. For Atlantic Sapphire, it is important to work with banks that truly understand the business of producing sustainable, high-quality proteins, and we believe there is no better team of industry experts than DNB and Farm Credit to partner with us on that mission.”

The Company’s existing US$150 million credit facility has been increased to
US$200 million, which is comprised of a fully-drawn US$50 million term loan, a US$ 20 million revolving credit facility and a US$ 32 million committed term loan for phase 2 capital expenditures with a US$98 million uncommitted accordion facility on the same terms and conditions as the company’s committed term loans.

Johan E. Andreassen further commented that “given the significant construction and operational milestones reached in 2020, including consistent weekly harvest of US premium Bluehouse Salmon since September 2020, Atlantic Sapphire has entered 2021 with a strong balance sheet and operational cash flow.”

Atlantic Sapphire harvested 166 tonnes of salmon in Florida in Q4 2020.