14.08.2013

Trends for the future salmon farming

-how can the industry grow? Precentation

by/ Lars Liabø

AquaGen seminar 2013

August, 14th 2013

Rica Nidelven Hotel, Trondheim

14.08.2013

Atlantic Salmon, why success?

• High market image, red flesh color, potent fish

• High fillet yield, low cost per kg editable meat

• Easy to handle in low cost production facilities

• Stable productivity, feed conversion rate, loss rate, growth rate

14.08.2013

Atlantic salmon 2012, the fastest growth ever! 1000 tonnes wfe

2011 2012E Change Change %

tonnes

Norway 1 006 1 183 177 18 %

Chile 221 364 143 65 %

UK 156 156 - 0 %

Canada 110 124 14 13 %

Faroe Islands 56 70 14 25 %

Australia 36 36 - 0 %

USA 18 20 2 11 %

Ireland 15 16 1 7 %

Others 16 17 1 6 %

Totalt 1 634 1 986 352 22 %

country

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Increased consumption, where?

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Atlantic salmon 2013: No volume growth,

soaring prices

• Estimated harvest quantity w.w. 2013 2 020 000 tonnes wfe

• Harvest quantity ww 2012 1 971 000 “ “

• Increase just 2,6%

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5,00

5,50

6,00

6,50

7,00

7,50

8,00

8,50

9,00

9,50

10,00

10,50

Jan

May

Sep

Jan

May

Sep

jan

.02

May

Sep

jan

.03

May

Sep

jan

.04

May

Sep

jan

.05

May

Sep

jan

.06

May

Sep

jan

.07

May

Sep

jan

.08

Mai

Sep

jan

.09

Mai

Sep

jan

.10

Mai

Sep

jan

.11

Mai

Sep

jan

.12

Mai

Sep

jan

.13

Mai

EU

R/k

g

Retail Prices; FranceFresh Atlantic salmon

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EU; consumption per capita

(total population 503 mill.)

Change in consumer pattern?

2011 E 2012E Chg

• Poultry 24,1 kg 23,9 kg - 0,2kg -1%

• Pork 43,3 kg 42.9 kg - 0,4 kg -1%

• Atl.sal. 1,55 kg 1,82 kg + 0,27 +17%

+ 0,1 kg = 50.000 tonnes

+ 0,5 kg = 250.000 ”

Source: ZMP/ Kontali Analyse AS

0

5

10

15

20

25

30

35

40

45

50

Poultry Pork Atlantic salmon

KG

per

cap

ita

2008 2009

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Salmon Farming, a very profitable

industry (At least in Norway)

2003 to 2012:

Average pre tax margins for Salmon

Farming Companies in Norway:

18 %

The markets are growing, but who can serve future demand?

• Norway?

• Chile?

• UK?

• Canada?

• Others?

• Russia?

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Growth potensial Chile

• Area available 23 100 km2

• Max tonnes per km2 (?) 25 tonnes

• Max biomass ca 580 000 tonnes

(Biomass end July 2013 all species: 430 000 tonnes)

• Max production(biomass*1,8)ca 1 000 000 tonnes/year

Estimated harvest quantity all species 2013 ca 780 000 tonnes

17.2 2011

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Growth potensial Norway

• Available seasites for salmon farming 76 410 km2

• Max biomass today MTB 775 000 tonnes

• Tonnes per km2 10

• Potential tonnes per km2 25(?)

• Max biomass 1 900 000 tonnes

• Maks produksjon (Biomasse*1,5) 2 900 000 tonn

Harvest quantity 2012 salmon and trout 1 256 000 tonnes

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MTB (MAB), Norway

300 000

400 000

500 000

600 000

700 000

800 000

Jan

Mar

May Ju

l

Sep

No

v

Jan

Mar

May Ju

l

Sep

No

v

Jan

Mar

May Ju

l

Sep

No

v

Jan

Mar

May Ju

l

Sep

No

v

2009 2010 2011 2012

Ton

ne

s W

FE,

(ro

un

d, b

led

we

igh

t)

Total Biomass - Salmon & Trout MAB - Capacity

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Salmon production Norway

2009 - 2013E

2009 2010 2011 2012 2013E

S1+S2 131 000 139 000 6 % 153 500 10 % 154 500 1 % 159 000 3 %

S0 106 000 117 000 10 % 127 000 9 % 127 500 0 % 131 000 3 %

Total Release 237 000 256 000 8 % 280 500 10 % 282 000 1 % 290 000 3 %

2009 2010 2011 2012 2013E

Feed Consumption 1 202 100 1 234 800 3 % 1 370 400 11 % 1 519 700 11 % 1 475 900 -3 %

Losses (Tonnes wfe) 72 100 67 000 -7 % 70 600 5 % 78 600 11 % 76 900 -2 %

BFCR - per kilo live weight 1,14 1,15 1 % 1,15 0 % 1,13 -2 % 1,14 1 %

EFCR - per kilo wfe 1,31 1,32 1 % 1,31 -1 % 1,29 -2 % 1,30 1 %

Avg. Harvest Weight 4,87 5,14 6 % 5,17 1 % 5,20 1 % 5,21 0 %

Biomass Ultimo 598 400 607 000 1 % 668 900 10 % 689 400 3 % 705 000 2 %

How to get growth in Norway?

• According to the government of today no increase in MAB will take place before the industry can show

- Reduction in number of escapes

- Reduction in number of sea lices

Actions to be taken within the system of today

• Increased smolt weight

• Faster growth independent of seawater temperatures

• Reduced loss rate

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Increased Productivity?

• Loss rate

• Growth rate

• Feed conversion rate

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Yield per smolt

1,00

1,50

2,00

2,50

3,00

3,50

4,00

4,50

5,00

5,50

2002G 2003G 2004G 2005G 2006G 2007G 2008G 2009G

kg/w

fe

Generasjon

UK Chile

Færøyene Norge

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10 %

15 %

20 %

25 %

30 %

35 %

40 %

87G 88G 89G 90G 91G 92G 93G 94G 95G 96G 97G 98G 99G 00G 01G 02G 03G 04G 05G 06G 07G 08G 09G 10G

Atlantic Salmon Norway – Loss rate %

G E N E R A S J O N

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Yield per egg - Norway

0,00

0,50

1,00

1,50

2,00

2,50

3,00

3,50

4,00

4,50

96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10

kg

wfe

per

rog

nko

rn

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0,00

0,50

1,00

1,50

2,00

2,50

3,00

3,50

4,00

4,50

87G 88G 89G 90G 91G 92G 93G 94G 95G 96G 97G 98G 99G 00G 01G 02G 03G 04G 05G 06G 07G 08G 09G 10G

kg

wfe

Atlantic salmon Norway;

Yield per smolt released (kg wfe)

14.08.2013

Feed conversion rate Atlantic Salmon Norway

1,00

1,10

1,20

1,30

1,40

1,50

1,60

1,70

92G 93G 94G 95G 96G 97G 98G 99G 00G 01G 02G 03G 04G 05G 06G 07G 08G 09G 10G

Biologisk fórfaktor levende vekt Økonomisk fórfaktor sløyd vekt

Changes in the Norwegian production structure?

• Increased cooperation fresh water and ocean farming necessary

14.08.2013

The Norwegian salmon farming

regulation system

1973 A preliminary law for fishfarming passed

the Norwegian Parliament:

- Licenses for start up only granted by the

Government, both for freshwater (smolt) and ocean

production (ongrowing).

- Limitation on ownership

- A split between smolt and ongrowing

14.08.2013

1985: Smoltproduction free!

• 1985 to 1990 an enormous growth in number of smolt producers.

• 1990: 558 production sites registered!

• 1997: 283 “ “ “

• 2011 : 247 “ “ “

• 2012: 235 in operation (According to the Directorate of Fisheries)

14.08.2013

Status Norway salmon fresh

water production (smolt) • Most plants Are part of (integrated) a

company with licenses for ocean farming or

the smolt plant has a long term contract with

a farming company

• To utilize the MAB system, all smolt plants try

to deliver a bigger smolt.

• Increased tank capacity, recirculation

systems

• Increased production per plant

14.08.2013

Wrong focus?

• Is yield per egg measured as number of

smolt a correct productivity factor?

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0 %

10 %

20 %

30 %

40 %

50 %

60 %

70 %

80 %

90 %

Smolt per egg

14.08.2013

Final remarks

• High salmon prices can cause

establishing of non sustainable

production

14.08.2013

Advanced breeding systems are an important part of

the salmon industry developement

• Can breeding make the salmon immune against sealice

and a sterile fish will be no treat against the wild salmon

And in addition give a more healthy and fast growing fish,

Yes,

then the future will be much brighter for the salmon

industry!

Thank you!