Strategy for production and marketing of atlantic salmon and a comparison with the sea bass and sea bream industry

Transcription

1 Strategy for production and marketing of atlantic salmon and a comparison with the sea bass and sea bream industry By: Bjørn Myrseth Vitamar A.S. bjorn.myrseth@vitamar.no Telephone Firenze 12 April

2 Bjørn Myrseth education and experience Master degree of fishery biology University of Bergen 1971 Worked with fish farming since 1970 Worked as manager and owner and operator Founding member of European Aquaculture Society in 1976 Sea Farm A.s. from 1971 to Partner and CEO Worked internationally with establishing fish farms in Scotland, USA and Canada Listed Sea Farm on the Oslo Stock Exchange in 1985 Started Marine Farms A.S in 1987 Worked as owner and CEO Invested in Chile, Scotland, Greece, Spain and Norway All the farms developed into succesfull companies -2-

3 Bjørn Myrseth - education and experience (continued) Many years of experience from marine hatcheries,cage cage farming, fish processing and sales and marketing Listed Marine Farms on Oslo Stock Exchange in Marine Farm ASA purchased by Morpol ASA and delisted Receive FEAP award for Excellence in aquaculture 2012 Elected chairman of Morpol ASA Course at AIT on tilapia production December 2012 Morpol ASA sold to Marine Harvest -3-

4 Work on tilapiai -4-

5 Content t Biological issues Technical issues Commercial issues Leagal issues Financial issues The future Discussion and conclusions -5-

6 Young industries i Atlantic salmon farming started around Harvest in 1000 tons A. s. Norwa A.s world S &S a few

7 Life cycle of farmed atlantic ti salmon -7-

8 Biology time from egg to market Size to Age in Harvest Total cage months size prod. time Salmon 100gram kg months S & S 2-3 gram gram months -8-

9 Biology - maturation ti SALMON Mature after 1 or 2 years in seawater Mature fish has poor quality Maturation stopped by use of light SEA BASS and SEA BREAM Mature before harvest Reduce growth Increase FCR Increase production cost Mature fish has good quality -9-

10 Biology - smoltification Smoltification is the change for salmon from freshwater life stage to sea water life stage In the early days (to 1994), all smolts were put to sea in May June were one or two year old Research learned us to manipulate with light to smoltify salmon fry at any time Today smolts are put to sea in May June (at an age of about 18months) and August October(at an age of 9-10 months) This reduce costs and give more even harvest year round -10-

11 Feed efficiency i -11-

12 Fish in fish out ratio -12-

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14 Genetics history of traits included d 1975 Growth (G) 1981 G + Age at maturity(a) 1993 G+A+Disease resistence(d) 1994 G+A+ D + Flesh colour (C) 1995 G+ A+D+C+ Furunculosis and ISA 1996 G+A+D+C+FI+ Fillet fat, slaughter yield, skeletal deformities 2001 Growth in fresh water and IPN 2002 Body shape 2001 Fillet yield 2011 PD -14-

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16 Biology - diseases Constant problems in the salmon industry. SALMON SEA BASS and SEA BREAM IPN Nodavirus ISA PD PRV Vibriosis Vibriosis Furunculosis Pasteurellosis Winther soars Tenicibaculum Sea lice Caligus/lernathroupus Diseases in both industries, but biggest problem in salmon -16-

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18 Spread of furunculosis - from Scotland by import of smolts

19 Biology mortalities Removal of mortalities daily In Norway by baskets In sea bass and sea bream by divers In Norway, illegal to drop dead fish into the sea Dead fish made into silage on the farms Silage collected by special companies Silage made into protein concentrate or used for biogass -19-

20 Biology environmental conditions Salmon farmers by law have to Have only one yearclass per site Fallow for minimum 3 months between year classes Rotate between sites Fundamental to reduce disease problems Faroe Islands follow this strictly lowest production costs In Sea bass and sea bream farming no such requirements could end with disaster (Chile!) -20-

21 Fish growth same for salmon and S&S S-SummerS -21-

22 Salmon lice -22-

23 Biology - sea lice Parasitic copepod pp Found on all wild salmon at sea, 1 to 10 per fish Pelagic larvae Too may will damage skin and kill the fish Sea lice larvae from salmon in cages supposed to kill wild smolts Give fewer salmon returning from the ocean to rivers for spawning and fewer fish for anglers to catch BIG ISSUE FOR SALMON FARMING IN NORWAY AND SCOTLAND -23-

24 Biology - sea lice Treatments against salmon lice Chemicals as bath or in feed Sea lice may become resistant to treatments Other methods: Laser Washing Electric fence Closed systems Land based farms Cleaner fish -24-

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26 Research and development R & D has been vital for the development of salmon farming Constant development of biology and technology The last years about 100 million Euro spent per year (salmon value 4 billion Euro) About 40 % from industry Farmers pay 0.35% of export value for R & D Fish feed companies (3 of them) spend a lot and have research stations. -26-

27 Technical issues Bigger sites up to tons Bigger cages, from 12m in 1974 to 50m today, also much deeper Maximum fish 1000 tons per cage Require bigger work boats to handle nets and moorings Give lower production costs Same development but slower in sea bass and sea bream -27-

28 Technical issues Certification of equipment NS 9415 Moorings and cages approved Dimensions according to waves and currents Certified by approved companies Reduces escapees and farms damaged by storms -28-

29 Technial issues - escapees -29-

30 Feed dbarge -30-

31 Vessel carrying feed in bulk fill silo on barge -31-

32 Work kboat -32-

33 Technical issues - wellboats -33-

34 Technical issues - well boats Well boats used for transport of Live fish to processing facilities Live smolts Water flow through h the hold About 100 boats in Norway In 1980 biggest boats 250 m3 25 tons of salmon In 2013 biggest boats 3500 m3 350 tons of salmon Risk of distribution of diseases with well boats In the Mediterranean only a few well boats (Culmarex use one) -34-

35 Price & Cost Development Atlantic Salmon * *Price & Cost: Average price & cost, fresh gutted Norwegian salmon, Ex. Processing plant Inflation adjusted Index 100 = 2009

36 Harvest Estimates Mediterranean Seabass & Seabream

37 European Seabass in the Mediterranean Pi Price &Vl Volume Development * *Seabass Price: Average annual wholesale price Mercabarna for fresh whole farmed seabass

38 Gilthead Seabream in the Mediterranean Pi Price &Vl Volume Development * *Seabream Price: Average annual wholesale price Mercabarna for fresh whole farmed seabream

39 Volatiltiy of Prices Salmon - Norway Seabream - Spain

40 Total markets for salmon and sea bass and sea bream 90% of sea bass and sea bream sold in domestic or local markets Sea bass and sea bream exported to. Markets world wide 20% of salmon sold in domestic or local markets Salmon from Norway exported to 160 markets world wide -40-

41 Commercial Issues EU Consumption A comparison Chg. Farmed Seabass & Seabream % Farmed salmon from Norway % Total farmed salmon %

42 PIGS Supply of fatlantic Salmon vs. Bass &Bream Atlantic Salmon % Chg 11/12 Abs. Change Portugal % Italy % Greece % Spain % % Seabass & Seabream % Chg 11/12 Abs. Change Portugal % 500 Italy % Greece % Spain % %

43 BRIC - Markets Atlantic Salmon % Chg 11/12 Abs. Change Brasil % Russia % India % 80 China/Hong Kong % % Seabass & Seabream % Chg 11/12 Abs. Change Brasil % 50 Russia % 1750 India China/Hong Kong % % 1 716

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45 Norwegian Large Trout Price & Volume Development

46 Commercialisation why this success for salmon? Convenience. Boneless fillets Product diversification Smoked Portions fresh and frozen Attractive to young people Sushi trend Generic marketing -46-

47 Commercialisation products Salmon Sea bass and sea bream Whole fish 5-10% > 90% Fillets / portions 35 40% < 5% Prepared meals 15 20% < 2% Smoked 30 35% < 2% YIELD Salmon Sea bass and Sea Bream To fillets 63% about 45 % -47-

48 Commercialisation generic marketing Money spent by Norwegian Seafood Council on salmon million Euro ( tonn) million Euro (1.2 million tons) Euro per kg salmon exported from Norway No public money All money from Norwegian salmon farmers -48-

49 Legal issues government support Norway strong ggovernment support Mediterranean little govenment (or no?) support -49-

50 Legal lissues - regulations Norway strong regulations no free establishment need concession Norway complex and resource intensive system o Heavy fines if breach o Money paid for concessions go to Government 1. 4 mill Euro Mediterranean less rigorous regulation systems -50-

51 Legal issues - sites - competition For sites there is competition from other users both in Mediterranean and Norway Local fishermen Tourism Recreation Navigation Visual impact Things may change in Norway when a fee for use of sites are introduced. The money will go to local communities Special for Norway Escapees Sea lice -51-

52 Financial i issues costs per kg Salmon Salmon S & S S & S Euro/kg % Euro/kg % Feed Juveniles Labour Other Fixed costs Total costs

53 Financial i issues labour costs incl sosial costs Norway Euro per year Greece Euro per year -53-

54 Financial i issues prod. per man year in Norway Year Prod per man year Prod cost NOK

55 Financial i issues out sourcing Out sourced activity in Norway Net washing Moorings Diving Some times change of nets Sea lice treatment Well boats In sea bass and sea bream farming this is difficult because of small industry and distance between farms -55-

56 Financial i issues price volatility- Fish Pool -56-

57 Financial-i profitability in salmon farming -57-

58 Financial i issues volume change and price -58-

59 Financial issues Information from Kontali Analyse -59-

60 Financial i -consolidation -60-

61 Price of Atlantic salmon relative to other proteins sources -61-

62 Listed aquaculture companies Oslo Stock Exchange I Company 2011 Harvest 2011 sales mill 2100 Market cap 1000 tons Euro mill Euro Marine Harvest Cermaq Leroy SF Salmar Grieg SF Bakkafrost Norwegian RS

63 Listed companies size II Company 2011 harvest sales mill 2011 market cap tons Euro mill Euro Marine harvest Scottish SC Nireus Selonda n.a Dias n.a

64 Kontali A.S. Monthly Report. Salmon and Sea bass and Sea bream -64-

65 Kontali monthly information -65-

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67 Conclusions 1 Why has salmon been so successful? Good fish to farm high yield Well known and luxury product Other factors Industry cooperation one country R & D Innovation Government support (for R & D) Generic marketing -67-

68 Conclusion - troutt What could be done? Reduce costs? Copy salmon: Genetics? boneless (100%) fillets from gram fish possibly red flesh? Sell fillets fresh smoked marinate oven ready meals -68-

69 Conclusions what can be learned? Sea bass and Sea bream: Better cooperation: Better information Kontali Analyse More R& D Promotion of S &S Reduce costs. - No maturation Better growth genetics and better feed - Bigger fish at lower cost More money for R &D Product development Market development present and new markets Key: lower cost -69-

70 Thank you! Thank you for inviting me and for listening Thanks to people who helped me with information: Kontali Analyse A.S Georg Liasjø, analyst ABG Sundal Collier Panos Christopanopoulous. -70-