Weekly Overview: Cooke Aquaculture to Buy Marine Harvest's Shetland, Orkney Operations

1 April 2014, at 1:00am

ANALYSIS - In this week's news, Marine Harvest is to sell its salmon farming operations, in the Shetland and Orkney Islands of Scotland, to the Canadian fish farming company Cooke Aquaculture, writes Lucy Towers, TheFishSite Editor.

Marine Harvest is divesting its operations in order to meet the terms set by the EU Commission for the approval of the Morpol transaction in September 2013.

The operations have a combined harvest volume of 17,400 GWT estimated for 2014. The agreed Enterprise Value is £122.5 million, which corresponds to an EV/kg of approximately NOK 70.

“We are always looking for strategic development and investment opportunities in the seafood sector. This purchase gives us a unique platform for our European operations and is a good fit with our Spanish sea bass and sea bream farming company, Culmarex.,” said Glenn Cooke, CEO of Cooke Aquaculture.

However, the European Commission has also sent objections to Marine Harvest over early implementation of its acquisition of competitor Morpol.

In December 2012 Marine Harvest had acquired a 48.5 per cent stake in its fellow Norwegian company Morpol.

This transaction was notified only in August 2013 and cleared subject to conditions in September 2013 (see IP/13/896).

In the Commission's preliminary view, Marine Harvest has failed to notify its project to acquire Morpol to the Commission before it was implemented, in breach of the EU Merger Regulation.

If the infringement is confirmed, the Commission may impose a fine of up to 10 per cent of the company's annual worldwide turnover.

Sino Agro Foods has released more information on its planned prawn and shrimp farm complex in Zhongshan City, China.

With production expected to start in the second quarter of 2015, the farm will sell initially to the Chinese market and then for export. A spokesperson for the company stated that they expect to sell shrimp at RMB 60,000 per metric ton, and prawns at RMB 80,000 per metric ton.

The vast farming complex will be home to Mexican Whites (Penaeus Vannamei) and LawZi prawns (Macrobrachium Rosenbergli) at a 50:50 ratio.

With a production estimate of 300,000 metric tons, the company stated it hopes to reach this figure after ten years of production. The company has set a production target of 10,000 metric tons for the first two years, 30,000 metric tons in three years and 100,000 metric tons in five years.

A four-pronged action plan has been recommend in order to help promote aquaculture in the Mediterranean region.

This is the main finding to emerge from AQUAMED, a European Commission-funded project, is tasked with assisting the development of a cross-functional strategy for sustainable aquaculture research in the Mediterranean basin.

The recommended plan of action includes the creation of an interest group involving industry, research and policy makers and also a reward system for researchers successful in delivering applicable research.

The innovation process could be sped up, it further recommends, by industries 'renting' researchers and science systems and sharing risks. The plan also advocates finding new and alternative sources of material to replace fish meal and fish oil in aquafeed composition.