Morpol Buys Cermaq Salmon Farm

Mainstream Scotland was acquired for a value of NOK350 million (€45.5 million/$59.5 million).

Mainstream Scotland is a subsidary of Cermaq, the large Norwegian listed company which is active in both fish farming and fish feed. Mainstream Scotland is the main salmon producer in the Orkney Islands. In Shetland, Mainstream’s production represents some 10 percent of the total annual harvest volume of the island. Mainstream Scotland has fresh water production facilities on the Scottish mainland and primary processing plants in Orkney and Shetland. Mainstream Scotland expects to harvest 6,500 tonnes of Atlantic Salmon in 2010. In 2009 Mainstream Scotland had a turnover of NOK 196.7million which is expected to increase to over NOK 230 million in 2010.

The closing date for the transaction is expected to take place 25 August 2010.

Mr Jerzy Malek, CEO of Morpol says: “It is exciting for Morpol to make the first step into salmon farming, particularly entering first in Mainstream Scotland which we believe has a significant potential for growth over today’s production levels.

"We intend to use this acquisition as a platform for market penetration in the UK and French markets and will further invest in processing to align Morpol with our customers’ needs. We believe we can extract synergies in the value chain and enhance margins while at the same time increasing our presence in other markets such as the US which prefers Scottish origin salmon. With this step, we secure about 10 per cent of our raw material needs."

Mainstream results in Scotland have been improving over the last years. EBIT of NOK 8.80 per kg was realised in the second quarter 2010. With over 4,000 tonnes of the annual sales to be made in the second half 2010, the company is positioned to achieve solid profits in this period. Mainstream Scotland financial results will be consolidated into Morpol ASA from 1 August 2010.