Danish Salmon: Nissui and Marubeni invested so it could double production

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“This upscaling requires a lot of capital”. Japanese giants see Danes as key in rolling out RAS around the world.

On Thursday, SalmonBusiness reported that Hirtshals-based salmon farmer had been taken over by Japanese seafood company Nissui and major Japanese integrated trading and investment business Marubeni. They jointly acquired 66.7 per cent of shares of the company.

Long process
Director Erik Poulsen told SalmonBusiness that the new deal was a perfect match.

“I feel very confident having them on board,” he said. “This process has been very long so we know each other very well. We have some strong common values with Nissui and Marubeni, I think it’s a perfect match”.

Director Erik Poulsen. PHOTO: Danish Salmon

Why were they interested in you?

“I think the story is that we have been on the road for more than five years and as first movers, it was a very challenging way. 2018 was the first year that we were in the black. But to make an acceptable profit, we must upscale the production,” he said.

Capital
This upscaling requires a lot of capital. Poulsen explained that it was very challenging for four years but in the past two there had been a turnaround. This was covered by SalmonBusiness.

However, the director stressed that “to make a profit, we must upscale the production”.

“This upscaling requires a lot of capital. The reason we started this investor process, which we posted yesterday, the first thing is to more than double the production in Hirtshals to 2700 tonnes. Our new investors are aware of our history in Denmark. We have the experience, we have found the key between our technical utilisation and fish behaviour. That is what triggered Nissui and Marubeni,” said Poulsen.

“The investors are also interested in sites in other places in the world but we will start on expansion first. Together we’ll develop that experience,” he added.

Danish Salmon’s facilties. PHOTO: Andreas Witzøe

Per kilo?
On costs, he said that right now is not the right time to discuss. “Our production costs will be lower per kilo when we double production. That is what it is all about”.

“That’s the reason why we have to expand because in the existing facilities we are now producing 1100 tonnes a year approx and it will not be possible to expand this, sometimes we can but not dramatically,” said Poulsen.

So does this mean there will be a lot of operational changes in the near future?

The technology in this industry develops all the time,” he said. “The expansion will be based on the experience we have had so far, we are not going to do any experiments,” explained Poulsen.

With the coronavirus-sized elephant in the room, Poulsen was optimistic about the future of RAS, despite COVID-19 dramatically changing markets.

“It’s a very difficult question. At the moment we have no real impact from the coronavirus for selling our product because there is a demand for RAS salmon which is high and the production is low,” he said.

But there must be changes?
“It’s small but I am very positive about the market changes because the demand for a product like ours is huge but there are only small productions (of RAS salmon) available around the world at the moment.”