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Sea Farms Consortium Buys No Catch Salmon Interests

by Ellen Hardy
10 April 2008, at 1:00am

UK - Scottish Sea Farms has, in consortium with Hjaltland Seafarms UK, agreed to aquire the salmon farming facilities of Shetland-based No Catch. The company is currently under administration.

No Catch, the UK's first and only producer of organic farmed cod, ran out of cash on February 20, with debts amounting to almost £41 million. Scottish Sea Farms and Hjatland Seafarms already have extensive operations in the Shetland Islands and both are owned by Norwegian parent companies.

Leroy Seafood Group ASA and SalMar ASA own equal shares (50 per cent) of the Scottish Sea Farms Ltd through Norskott Havbruk AS. Hjaltland Seafarms UK Ltd is fully owned by Grieg Seafood ASA.

A statement issued by Leroy Seafood Group today said the acquired assets do not change Scottish Sea Farms' forecasted harvest-volume for 2008.

They should however, lead to better biological conditions for Scottish Sea Farms' current operations in the Shetland area, as well as improving Scottish Sea Farms' potential for increased harvest volumes in the future.

Cod Continues Until Harvest

Commenting on the sale, joint administrators Daniel Smith and Robert Caven said they will continue to occupy part of the sea farm sites off the Shetland Islands under licence while they trade out or seek a buyer for the current stock of cod, which once mature will comprise of around 3,400 tonnes.

Licences on some of the sites extend to some 13 months, whilst the stock matures ready for harvesting.

In addition, the administrators are continuing to pursue the sale of the mussel sites, trout business and Grading Systems business, which are profitable enterprises and operate as a specialist mass live fish grading business.

“We believe that Scottish Seafarms and Hjatland UK Farms Limited will use the farming sites for their very successful and highly profitable salmon farming businesses. In the long run this should create sustainable employment in the sea farming sector for the Shetland Islands and continue to enhance the Islands’ reputation as a centre of expertise for farmed fish," said Daniel Smith of administrator Grant Thornton.

Organic Assets

Grieg Seafood Hjaltland, the largest salmon farming and processing company in Shetland, said that it has acquired farm assets including barges, boats and cages, as well as a farm with organic salmon certified by the Organic Food Federation, plus several farm licences, at a disclosed sum of £3.6 million.

“We are very pleased to have completed the purchase... The seven farm licences will increase our production capacity and flexibility for an even more consumer-tailored salmon production in the coming years, said Per Grieg, Grieg Seafood’s chief executive officer.

Four of the acquired sites – Swining Voe 1, Swining Voe 2, Swining Voe 3, and North Voe Whalsay - have strategic benefits for Grieg. They are all located on the east side of Shetland where the company already has a significant operation.

“With organic salmon already being grown on one of the sites, Hjaltland Seafarms will now be in a position to offer continuous supply of organic salmon in 2008 and thereafter under its organic brand WildWater – Farmed in the Wild. This will make us the world's largest producer of organic salmon. The sales will be handled by our sales and marketing company, Shetland Products,” added Per Grieg.

His company already produces more than one third and processes 50 per cent of Shetland’s total salmon production. This latest acquisition will increase production capacity, but will not increase the harvest guidance for 2008. That will remain at about 16,000 tonnes, although forecasts estimate that an increase to a 20,000 tonne harvest (gutted weight) will be possible by 2010.

Premium Targets

Hjaltland Seafarms’ managing director Michael Stark said the additional farm sites and harvest volume of organic salmon will strengthen Hjaltland’s market position. The company's processing company, Lerwick Fish Traders, will also benefit from increased farm production through greater processing volumes of primary, secondary and in the near future value-added products.

The Grieg Seafood Hjaltland Group is in the final stage of constructing the processing plant in Lerwick where it will start producing smoked and cured salmon as well as finished or semi-finished products within the second quarter of 2008.

Hope for Hatchery Sale

The joint administrators are also continuing to hold discussions on the potential sale of the hatchery business, which contains much of the intellectual property pertaining to the successful rearing of organic cod.

The processing plant in Scalloway continues to operate at a reduced level as the administrators are offering a head-on gutted product for sale to wholesalers rather than a filleted product.

Ellen Hardy