Andfjord Salmon AS announces potential plan for 50 percent growth in production volume.

Andfjord Salmon Plans to Increase Production Volume at its Kvalnes Facility

Andfjord Salmon is currently in process of acquiring additional 63,000 square meters of land area adjacent to its site at Kvalnes. This land area purchase unlocks an opportunity to initiate a further expansion at Kvalnes, with a possibility to increase production volume by approximately 50 percent, from today’s 12,600 tonnes to 19,000 tonnes, equivalent to a potential EBIT increase of approximately NOK 150 million at full production.

Martin Rasmussen.

“We are constantly looking at ways to improve the Kvalnes build-out, both to reduce project risk and to increase the long-term profitability of Andfjord Salmon, to the benefit of our shareholders. To initiate the build-out of Kvalnes Phase 3 is another such measure,” says Martin Rasmussen, CEO of Andfjord Salmon.

By initiating the Kvalnes Phase 3 build-out now, Andfjord Salmon is able to capitalize on a window of opportunity that can lower build-out costs notably. It will also allow the company to harvest improved economics at scale at Kvalnes earlier than planned, which means improved profitability. The alternative plan involves shifting the release of smolt in the first pool to the second quarter of 2022 and will significantly strengthen the mid and long-term revenue potential for Andfjord Salmon.

Initiating Kvalnes Phase 3 will also further reduce biological risk at Phase 1 and Phase 2 at Kvalnes. It will allow an even longer test period of the first pool, plus further reduce the risk that fish from Phase 1 and Phase 2 suffer stress from noise/vibrations from nearby construction work.

The pools are below sea level and is supplied with crystal clear water from 160 meters depth.

“It is the management’s view that clearing the path to realize a potential 50 percent growth in production volume at Kvalnes, at lower build-out cost than we will achieve at a later stage, is an attractive proposition that more than outweighs the consequence of moving first smolt release to 2022,” says Martin Rasmussen.

The natural ocean pools have low fish density and perfect conditions for the salmon.

First pool technically complete

Andfjord Salmon is currently putting the finishing touches on the first pool (Phase 1) and conducting the excavation work for the next pools at Kvalnes (Phase 2), representing a total production volume of 12,600 tonnes HOG.

The construction of the first pool is finalized, with only minor post-construction installations remaining on the pool, making it technically ready to be filled with water.

All bio residues are recycled as growth products, thanks to our multi cleaning system.

The installation of the outer joints to the pool’s water inlet pipeline remains. Andfjord Salmon has discovered damage to the outer connection point of the installed water inlet pipeline and a replacement section has been ordered. The company estimates that it will take approximately 8-10 weeks and a cost of NOK 30 million to complete the repair. This work has already commenced.  

“This has increased the relevance of initiating the Kvalnes Phase 3 build-out now, because it will eliminate time constraints associated with repairing the inlet pipeline section,” says Martin Rasmussen.

The plan involves increasing production volume by around 50 percent, from 12,600 to 19,000 tonnes HOG.

Q1 2021 interim results

Andfjord Salmon is currently building up its first land-based salmon farming facility, which means that at present it does not generate revenues. The company had an operating loss of NOK 7.3 million this year’s first quarter compared to a loss of NOK 3.3 million in the corresponding quarter last year.

As of 31 March 2021, Andfjord Salmon held cash or cash equivalents of NOK 88.8 million. This figure does not include a NOK 35 million undrawn credit facility of NOK 15 million in available grants.

Andfjord Salmon - The best of two worlds from Andfjord Salmon AS on Vimeo.

About Andfjord Salmon

Andfjord Salmon is granted a concession to farm 10,000 MT of salmon from the Norwegian government. The facility is designed to be void of salmon lice and poisonous algae, robust barriers to prevent escapements and releases effluent at Norwegian standards to minimize exposure of marine life to pollutants or other harmful substances.

Andfjord Salmon AS’ farming facility is located on Andøya, the northernmost island in the Arctic Archipelago of Lofoten, Vesterålen. Andfjord was established in 2014 by the founder Roy Bernt Pettersen. The company is built on a foundation of innovation and sustainable salmon farming. Andfjord Salmon's facility is patented, consumes a minimal amount of energy with relatively low operating costs and its facility is sustainable with minimal impact on the surrounding environment.

Source: Andfjord Salmon

[email protected]
www.seafood.media

Print