© Danish Salmon
It’s a windy morning in the small coastal town of Hirtshals in the north of Demark. In an industrial area near the port, where tourists are waiting to catch the ferry to Norway, stands a large indiscriminate set of buildings that contains the first recirculating aquaculture system (RAS) salmon farm that has managed to generate positive financial results: Danish Salmon.
The birthplace of RAS?
Despite being a relatively small country with a small traditional aquaculture sector, Denmark has managed to make a name for itself as a pioneer in RAS.
According to Kim Hieronymus Lyhne, Danish Salmon’s CEO, the country’s RAS roots can be traced back to the 1990s when the eel sector wanted to grow, but needed on-land capacity to do so. Experiments started in tanks with simple aeration, followed by filtration systems, in an attempt to control the water quality. As time went on and the farmers kept tweaking and improving their systems, eventually they evolved into the first rudimentary RAS.
“I wouldn’t be surprised if the Danish actually invented RAS,” Lyhne reflects.
Meanwhile, due to the strict legislation governing cage aquaculture in Demark, interest started to grow in using these rudimentary recirculating systems to farm other fish species. Eventually larger commercial players got involved and companies that are now household names – like Billund, AKVA, Danish Salmon, Skagen Salmon, Atlantic Sapphire and Nordic Kingfish – all began to emerge in Denmark.
From egg to plate
On a recent visit to the farm, Lyhne explained that the company has five separate growout units, with a total capacity of 2,700 tonnes.
The company flies in eggs which are then hatched in a small onsite hatchery. Here, the salmon fry take 7 to 8 weeks to consume their yolk sacks, after which they are immediately weaned onto pellets. They grow the juvenile fish in 2 ppt salinity until 80-130 grams, after which they are stocked in growout tanks at full salinity of 33 ppt.
During their growth cycle the fish are split several times into new tanks, to maintain a density of 50 kg/m3, eventually reaching around 80 kg/m3 at the end of the growout stage.
As Lyhne explains: “From egg to final product, at 3-4 kilograms, takes the company two years.
“For sales the company uses one distributor only. Before, most of the produce was sold in Denmark, but we now sell our fish across Europe.”
Although Danish Salmon has invested a lot of effort in making the facility as efficient as possible in terms of electricity usage and labour, Lyhne believes that it is not yet possible to compete with cage farming operations, due to their economies of scale. As a result, they are still reliant on charging a slight premium.
“We mostly engage with customers that are looking for sustainably produced salmon and that are willing to pay a justifiable premium for this,” he observes.
Lyhne believes that it’s essential to prioritise fish welfare on the farm, and the water in the tanks is remarkably clear.
“Salmon are like princesses and need the best water quality and feed to thrive,” he stresses. “Everything can be seen through feeding: happy fish always eat well.”
© Danish Salmon
From accounting to being accountable
Lyhne’s journey to becoming the CEO of the company is relatively unconventional.
“The first idea for Danish Salmon started in 2009, as the founders were already engaged in trading salmon in Denmark and they wanted to produce their own fish. With strict local environmental legislation in place their thoughts turned to developing a recirculating system to do this,” he recalls.
Five years later, with the facility finally completed and stocked, Lyhne was fresh out of college, armed with an economics degree.
“The company needed someone to figure out the different certification schemes available to which they could apply. Instead of working months on this, it turned out to be just a few minutes of work, as there was only one scheme available that they could apply for,” he explains.
With time left on his contract, he instead started assisting with the accounting and operational metrics side of the business and quickly realised that the numbers didn’t add up.
“We tried to get an overview of the basic production figures, including stocking densities, FCRs etc. and noticed that something was off,” he recalls.
Although large volumes of feed were going into the tanks, the fish were still growing slowly.
“Eventually we saw no other option but to harvest a large growout tank early to see how many fish were actually inside,” he notes.
And it turned out that the tank contained only half the number of salmon that were on record – an important lesson for the company to improve its farm monitoring – so Lyhne was tasked with improving the record keeping systems and overall monitoring.
“I also got excited about getting my hands dirty and getting more involved in improving the design and functionality of the farm,” he explains.
Long story short; he eventually was promoted to CEO – it’s a remarkable career path, but not one that’s widely talked about, much like the success of the company itself.
“We prefer to keep a low profile and stay out of the aquaculture tabloids. We prefer to focus on our fish instead,” Lyhne says.
© Danish Salmon
A recipe for success?
As covered in Recirculating aquaculture systems: money makers or dream breakers?, after initial struggles the company slowly but steadily progressed and in 2023 it reached an important milestone: harvesting 1,100 tonnes and reporting a gross profit of $783,000. Production almost doubled to 2,000 tonnes in 2024, with profits exceeding $1.5 million. It is the only significant salmon RAS growout facility that has been able to achieve such positive numbers.
The facility is now running at full capacity and aims for a total production of 2,700 tonnes in 2025, although this year’s low salmon prices mean that they might struggle to make a profit for the third year running.
Nevertheless, Lyhne believes the company is in a strong position to repeat its recent successes in the long-term, but he struggles to pinpoint their formula for success. According to him, there is nothing special about their approach to salmon farming – for example the design of the farm is pretty straightforward, with concrete and PE/PVC plastic being the main building materials. “Concrete is readily available in Denmark and PE plastic is easy to work with and modify, making it perfect for our hands-on approach to farming”.
“I actually think our farm might have the fewest innovations and gadgets of any of the salmon RAS farms out there,” he claims.
However, Lyhne does concede that they do have a strong focus on incorporating redundancies into the design of the farm, and his motto is to expect the unexpected.
“Everything that can go wrong, will go wrong. Every time. Prepare for this – for example, when you need a single pump in one line, always install a back-up and test it regularly, just in case. And choose high quality pumps that last long,” he argues.
He also tries to ensure that the company is as self-sufficient as possible.
“We put a lot of effort in staff training, so all our staff know how to replace broken equipment. We want to make sure at least half of our farm staff know how to work with PE or PVC plastic so we can make most modifications immediately – outsource too much work on the farm and you go bankrupt,” he observes.
© Danish Salmon
Tips for new RAS farmers
Lyhne has noted a shift in the attitudes of RAS farmers, saying that at the beginning of his career they would meet every few months and share tips and ideas, but that 10 years later they all see each other as competitors.
“We are all fishing for customers in the same pool,” he points out.
Despite this, for those considering starting out in RAS, Lyhne is willing to share three key tips:
1: Location, location, location. It’s important that the location of a new farm meets all the requirements of the project, including year-round access to good quality water; sufficient power; the ability to dispose of wastewater and other waste; the right climate for your species; a local population with a positive attitude towards aquaculture and you also need to make sure you are not too far from your market. “Never compromise on any of these requirements”.
2: Keep your design simple, efficient and incorporate plenty of redundancies. To make sure your farm is price-competitive you need to focus on reducing production costs, especially in terms of energy usage and labour.
3: Develop a strong team of people who are willing to settle near your farm. You need to train them well and give them incentives to develop their careers within your company, as it takes several years to train new staff in RAS so you really want to make sure these people stay working happily in your company”.
Hoping for a tip on how he and his team keep the water inside the growout tanks so crystal clear, Lyhne adopts a sterner look. “We keep that a secret for now,” he asserts.
© Danish Salmon
