Cod farming requires significant amounts of feed, partly derived from wild fish stocks

Ocean 14 Capital Fund teams up with KIME Akva to drive growth of farmed cod as a sustainable supplement to wild fishery

UNITED KINGDOM
Tuesday, December 10, 2024, 00:10 (GMT + 9)

Catches of Atlantic cod fell by 42% in last eight years, but with around a fifth of the global catch, Norway is still one of the largest producers and exporters of cod

London. Ocean 14 Capital Fund is a private equity impact investment fund focused on the United Nations’ Sustainable Development Goal 14 (SDG 14): Life Below Water, has entered into an investment agreement with KIME Akva, a Norwegian cod farming operation, as a foothold into supplementing wild cod fishing with sustainable farming at a time when cod prices are increasing and quotas are decreasing.

Photo: Kime Akva likedin

With around a fifth of the global catch, Norway is one of the largest producers and exporters of cod. Cod supplies are facing headwinds with a 20% reduction in cod quotas in the Barents Sea in 2024 to 543,427 tonnes, on top of the 2023 quota reduction of 23%, driving prices higher.

Most Atlantic cod is caught in the Barents Sea by Norwegian and Russian producers, which collectively caught 761,000 MT in 2023, and catches of Atlantic cod fell 42% over the last eight years and is predicted to be down almost 15% from 2023 to 2024. The quotas in Barents Sea are further reduced with 25% in 2025 – 340 000 MT. Norway’s share of the cod quota will be 163,436 tons.

“What started as a side-project to my father’s fishing company, has over time become a real solution to the reduction of wild cod fishing through incrementally decreasing quotas,” says Ørjan Jensen, chief executive officer of KIME Akva, head quartered in Finnsnes. “The back story, which we recount on our website, is interesting, but what has become apparent over time is that with the right processes in place, farming cod in their natural habitat in Northern Norway is not only potentially profitable, but perhaps more importantly a sustainable answer to the global need for fish protein,” Jensen explains.

More than 3.3 billion people around the world get at least 20% of their daily animal protein intake from fish. As the global population continues to rise, it is increasing pressure on this valuable, natural resource. Between 1961 and 2021, the average annual growth rate of global consumption of aquatic animal foods was 3.0%, outpacing the annual population growth rate of 1.6%. Meanwhile, the percentage of stocks fished at biologically unsustainable levels has been increasing since the late 1970s, from 10% in 1974 to 35.4% in 2019.

Since, establishing KIME Akva as a conventional cod farmer in Northern Norway in 2020, the company’s ambition is to become a cost-leading, fully integrated cod farmer by 2025 and by building in-house juvenile production, the venture can assure high quality at lower costs.

Photo: Kime Akva likedin

The company has invested heavily in license development, and aims to have nine sites by 2029. Currently, KIME Akva has acquired five sites in Northern Norway and has licenses for 12.9k tonnes approved and initiated application processes for roughly 44k tonnes of maximum allowable biomass (MAB). In 2024, KIME Akva completed its first full production cycle and ultimately plans to scale production up to 24k tonnes harvest-weight per year by 2030.

“We are excited to partner with the strong team at Kime to provide a sustainable, high-quality supplement to wild cod, stocks of which are under pressure for a variety of reasons. Through our partnership with KIME, the Ocean 14 Capital Fund gains a foothold in the most efficient operator, with a well-structured team and leadership, in a market that is rapidly intensifying,” says Max Holtzman, Principal at Ocean 14 Capital, the Fund’s adviser.

In addition to supporting KIME Akva’s operational expansion, the Ocean 14 Capital Fund’s investment will also support the firm to develop tools to improve the Forage Fish Dependency Ratios (FFDRs) and Feed Conversion Ratios (FCRs), as well as reducing waste and plastic pollution.

Cod farming requires significant amounts of feed, partly derived from wild fish stocks, while energy required for the various farm operations will contribute to the carbon footprint. The FFDR calculates the quantity of wild (forage) fish used in feeds in relation to the quantity of fed animal production, while the FCR measures the efficiency of feed conversion.

Photo: Kime Akva

“We are excited to be working with the impact team at the Ocean 14 Capital Fund, as our aim is to lead the development of the sector by working with them to look into/investigate adopting Zero FFDR and test Regenerative Waste production models,” adds KIME Akva’s Jensen.

“The Ocean 14 Capital Fund and KIME are well aligned with driving and improving operational improvements and efficiencies at important intersection of sustainability and finance, each which complements the other,” explains Ocean 14 Capital Fund’s Holtzman.

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