BioMar has resolved to expand the company's output capacity in Norway by 140,000 tonnes of fish feed per year, or by more than 30 per cent relative to its current production capacity of about 430,000 tonnes.
The company, which is owned by Danish industrial conglomerate Schouw & Co., is the world's third-largest producer of feed for salmon and generates annual revenue of more than €1.2 billion.
"Expanding our capacity is a major strategic move intended to consolidate our position in Norway. The Norwegian market is the most advanced of its kind in the world, and it's extremely important for us to have a strong position there. The overall Norwegian market is 1.7 million tonnes today, so our capacity expansion equals just over eight per cent of the total market consumption. Considering the attractive historic and expected market growth, this year projected at six per cent or about 100,000 tonnes, there is an ongoing need for capacity expansion," explained BioMar CEO Torben Svejgård.
The new production line is expected to be operational in 2016. Based on preliminary analysis, the expansion is expected to take place at the existing plant at Karmøy, but the further planning process may lead to a different conclusion.
"We completed a major expansion of our large plant at Myre in northern Norway only three years ago, and current considerations involve the pros and cons of having an independent new unit as opposed to optimising overall operations at an existing plant. We constantly focus on process enhancement, and our new production facilities will be among the most advanced in the world complete with state-of-the-art technology," he continued.
The investment will be the biggest capacity expansion ever in Schouw & Co. company history.
"BioMar is one of the world's largest players in the fish feed market, and the company has developed very well in recent years. Aquaculture is a €50 billion global market growing at stable rates of five to seven per cent annually. While Norway makes up only a relatively small part of the global market, it is the world's most advanced market and one that is essential for us. We are determined to share in the growth of the Norwegian market and see this investment a natural next step of our journey with BioMar," Schouw CEO Jens Bjerg Sørensen emphasised.
The 140,000 tonne capacity increase corresponds to a revenue increase of €130-150 million. The decision will not influence the revenue and earnings guidance for 2014.
