Grieg Seafood will increase production by 33 per cent in two years

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Much of growth will occur on land – with larger smolt.

He has just presented its second quarter results, EUR 44 million in operating profit, the highest in the second quarter ever. No wonder, since they harvested more fish in the second quarter, while the salmon prices were at historical high levels. Grieg Seafood’s four production regions harvested a total of 22,560 tonnes in the quarter.

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“We have a production capacity of 100,000 tonnes (gutted weight) that we expect to overtake in 2020. We will grow by at least ten percent a year, by 2018 to 2020,” said Andreas Kvame, CEO of Grieg Seafood.

Available capacity
This means a production increase from 2018 to 2020 of 33 per cent. This year Kvame & Co aims at 75,000 tonnes.

“We have a special focus on Finnmark [Northern Norway] which is and will be the largest production region in the company,” he said.

In western parts of Finnmark county, Grieg has significant available production capacity in its fish farming concessions and sea sites.

A key part of the plan to use the company’s licenses and increase salmon production, is to produce larger smolt.

“We are working with large smolt in Tytlandsvik Aqua, a joint venture with Bremnes Seashore, which has a production capacity of 3,000 tonnes. We and Bremnes Seashore have 1,500 tonnes each. That plant can be expanded to a total capacity of 12,000 tonnes,” he added, not hiding the company’s ambitions.

Challenges
But there are no time periods without challenges for Grieg Seafood. As usual, the company experienced issues in British Columbia, Canada, such as the 1,000 tonnes of salmon that were lost in the quarter to algae bloom.

Andreas Kvame, CEO of Grieg Seafood, during the company’s Q2 2018 presentation in Bergen. PHOTO: Ole Alexander Saue.

It’s not that obvious that Grieg Seafood should continue its venture on the Canadian west coast.

“We can put it down, we can sell it or we can fix it. These were the three options we had on the table. We chose the last option,” said Kvame, speaking with honesty.

The Shetlands have also been very demanding at times, but now it is better, confirmed the CEO.

“The production is stable and is going according to plan. The costs on Shetland are still too high, but they will go the right way,” he added.

Could be more
Grieg Seafood has already spent NOK 2/share in dividends on its shareholders. There may be more during the year.

Andreas Kvame, CEO of Grieg Seafood, during the company’s Q2 2018 presentation in Bergen. PHOTO: Ole Alexander Saue.

“At the general meeting, it was made possible to pay a further dividend during the year, if circumstances warrant. That’s something we might want to come back to at the next quarterly presentation, ” said CFO Atle Harald Sandtorv.

Sandtorv emphasises the company’s plans to invest heavily in growth – on land.

“We see that investing in land-based capacity is actually cheaper than investing in similar capacity at sea when we see the price level achieved during the state’s auction of production growth this summer,” he said.

“By paying 100 kroner (EUR 10.3) you get one kilo back,” said Sandtorv.