June 19, 2017

Global fishing and aquaculture company Blumar is set to invest $150 million in salmon farming operations in the Magallanes region in the far south of Chile.

Undercurrent News reports that the Blumar Board gave its approval at the end of May for the proposed Atlantic salmon farming project, which will include a processing plant and is expecting to produce 5 million smolts per year by the third quarter of 2018, to farm a total harvest of 21,000 tons by 2020. With this added output, Blumar’s production in Chile’s region XI will top 35,000 tons per year by the end of the projected time period.

Overall, Blumar states that it expects to see output of 29,200 tons of Atlantic salmon this year with 9.6 million smolts – a slight decrease year-on-year from production of 31,600 tons with 7.1 million smolts last year.

Salmon Run

Salmon farming began on an experimental basis only in the 1960’s, according to the Global Salmon Initiative. However, as global demand for protein is expected to climb by 70 percent by 2050, according to the Food and Agriculture Organization (FAO), the salmon farming industry is working to help meet this demand and has seen significant growth in its short existence, and heightened activity in recent months.

Additionally, advances in on-land recirculation aquaculture systems (RAS) technology developed in Israel have narrowed the production cost gap between sea-based and land-based salmon production systems, making salmon farming ventures much more economically viable.

Given a combination of climbing widespread consumer demand and the development of technologies that enable companies to scale up fish farming operations in a sustainable manner, various players have been maneuvering to increase their presence along the farmed salmon value chain.

In September 2014, the world’s largest salmon farming company, Norway-based Marine Harvest, acquired Chile’s Acuinova Chile, including a hatchery, smolt facility, primary and secondary processing facilities, and 36 sea licenses for $120 million. The purchase allowed Marine Harvest to reap the full benefits of the company’s unused potential by allowing the company use of its own dormant existing licenses in Chile, and giving Marine Harvest the infrastructure it needs to ramp up production.

In January 2016, the Rodsel Group announced it was investing €60 million, sourced from its “own resources” to establish an on-land salmon farm in Zamora, Spain.

Eight months later in August 2016, Iowa-based Inland Sea – Harlan LLC announced it was seeking $12 million in equity capital through a 506C private placement offering to partially fund the construction of a state-of-the-art, two-acre salmon farm using a Danish indoor recirculating aquaculture system (RAS).

One month later, Cooke Aquaculture Scotland, the regional unit of Cooke Aquaculture, announced it has agreed to acquire Balta Island Seafare – a salmon farming company located in the Shetland Islands for an undisclosed amount.

However, the move that possibly signaled the biggest vote of confidence in the future of salmon farming occurred in August 2015 when Cargill signed an agreement with Altor Fund III and Bain Capital Europe III to acquire global salmon feed leader, EWOS for €1.35 billion.

Under the terms of the deal, Cargill acquired seven production facilities in some of the top salmon producing countries in the world – one each in Chile, Scotland, Canada, and Vietnam, and three in Norway, and will also acquire two state-of-the-art research and development centers located in Chile and Norway.

With the capacity to produce 1.2 million tons of salmon feed for the largest producers in the world, Sarena Lin, president of Cargill’s Feed & Nutrition business said, “EWOS is a winning company. Adding its industry-leading talent and capabilities as well as its thought leadership in sustainable business practices will be transformational for our aquaculture nutrition business.”

-Lynda Kiernan

Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.