Canadian Salmon Stop Earnings – E24

– There is no doubt that our competitive situation is improving as a result of this, says Johan Andreassen, manager and store owner at Atlantic Sapphire.

On Friday, it was announced that Canadian authorities are eliminating offshore aquaculture around the Discovery Islands in the British Columbia region.

Mowi is the worst hit company, with reduced annual production of 10-12,000 tonnes as of 2022.

The United States is by far the most important market for Canadian salmon. So is Atlantic Sapphire, which, based in Florida, has huge expansion plans for onshore salmon farming.

The United States is the largest salmon market in the world, consuming more than 550,000 tons per year. Most are imported and come from Chile and Norway by plane and from Canada by truck.

The cost of air freight for salmon has nearly doubled to around NOK 30 per kilo as a result of crown restrictions.

– Canada is the only producer country that is not dependent on air transport to the US and therefore our closest competitor in logistics costs. The fact that there is less Canadian salmon has a favorable effect for us, says Andreassen.

Not surprised

Atlantic Sapphire began slaughtering the first salmon from its Miami facility this fall. For next year, a volume of 10,000 tons is expected.

With strong equity investors behind it, the company plans to expand to a capacity of up to 220,000 tons by 2031.

Already in 2026, a volume of 95,000 tons is planned, which will be more than all current production in British Columbia, Canada.

Mowi is surprised by the Canadian authorities’ decision, according to communications director Ola Helge Hjetland. It is not Andreassen.

– Prime Minister Justin Trudeau went to the polls in 2019 to phase out aquaculture at sea in western Canada. Here in the United States, there was a ban on salmon farming in open cages in Washington state a few years ago, Andreassen says.

He believes that the authority’s decision shows how strong the forces are at stake.

– There has been much dissatisfaction among indigenous peoples, who have lived off wild salmon and other natural resources in the area for thousands of years, and are concerned about the environmental consequences of agriculture. At the same time, there is a large commercial wild salmon fishery in North America, generating jobs for tens of thousands of people, Andreassen says.

– Non-activist

The Atlantic Sapphires founder made his first fortune building and then selling the Villa Organic fjord breeder in Finnmark.

Atlantic Sapphire, however, has a strategy to differentiate itself from aquaculture by commercializing the benefits of closed onshore facilities.

This includes, among other things, zero salmon lice and leaks, as well as reduced transportation needs, as the facilities can be located closer to the markets where the fish is consumed.

Canadian authorities are in the process of studying new requirements for the country’s aquaculture industry in order to achieve the goal of phasing out open cage marine culture by 2025.

Among the alternatives that are being studied is that of moving all production to land.

– Is it good news for the salmon industry that traditional offshore production is banned?

– No, personally I am not an activist in the field and I am not against agriculture in the sea. But it must be done sustainably, and it is right that the authorities set strict requirements, Andreassen says.

Atlantic Sapphire expects the U.S. salmon market to grow seven percent annually in the future, reaching 900,000 tonnes by 2027.

– We definitely believe that consumption will continue to increase, given that enough salmon is produced. It is not the case that Atlantic Sapphire relies on competition with salmon from other countries. We believe that there will be more than enough demand for everyone.