Regin Jacobsen, CEO of Bakkafrost, discusses his upcoming keynote at NASF, his firm’s purchase of the Scottish Salmon Company, land-based salmon farming, highlights from 2019 and more.

Is land-based salmon farming the key to the future?

The 15th annual North Atlantic Seafood Forum (NASF)—which will be held 3–5 March in Bergen—is rapidly approaching. There, the brightest minds in the industry will gather to share knowledge and get the inside scoop on the news and business trends shaping the world of seafood.

One of the opening speakers is Regin Jacobsen, CEO of Bakkafrost, the salmon giant based in the Faroe Islands. We recently sat down with him and had an enlightening conversation about the current state of salmon farming.

Q. Can you summarize the focus of your lecture at NASF 2020?

A. Sure. I will touch on salmon, and it's potential to provide the world with nutrient dense food in a sustainable way. And I will certainly touch on Bakkafrost, on where we are heading as a company, and the lessons we have learned in the last few years.

Q. What are some of your top highlights from 2019?

A. 2019 has been an exciting year for us. We started production of large smolt at Strond, our new hatchery. That means we now can use larger smolt as a prevention method for lice. We also finished building the Faroe Islands' first biogas plant. It will open in two weeks. Here, natural fertilizer, dead fish and sludge from our smolt production will be utilized to create electricity for the residents here. I consider this a win-win project.

Q.The recent acquisition of the Scottish Salmon Company (SSC) is seen as an important milestone.Can you speak to that deal a bit?

A. Yes, we bought 67 percent of shares in October, and 95 percent within NYE. We expect to own 100 percent of the company within a few weeks, and have now started operating in Scotland.

Q. Among all other options, why did you decide to go after SSC?

A. Well, in this case, size matters. SSC had a size that fit us perfectly and made it possible for us to go through with the acquisition. We had several options, yes, but SSC was the best match. Just like us, the company is located on an island with “island culture,” and they are near us in proximity. We also saw the potential for financial synergies.

Q. What would you say are the main differences between salmon production in Scotland and the Faroe Islands?

A. There are some key differences as far as salmon farming goes. The fish are generally smaller than on the Faroe Islands. We see that Scotland has more of a challenge with lice infestations and gill health. There's also a significant lack of smolt production, and the smolt used there are usually smaller in size. Scotland also has more of a challenge with NGO's and industry criticism. Otherwise, Scottish salmon is known for its high quality, so I'm sure we can learn a lot about branding and marketing from them.

Q. What are your thoughts about land-based salmon farms?

A. Land-based farms. Well, it could be an option, but it's not easy. I don't think it carries a lower risk than the open-net farming, and the cost is higher. But on the other hand, the recent salmon prices will push new alternative production methods to the surface. It's a reality that the open-net farms have reached their capacity to some degree. There are no more fjords available in Norway, none in Scotland, and none here at the Faroe Islands. So even if the land-based approach will yield a lower margin, it might be worth it to some. At Bakkafrost, we make an effort to optimize land-based farming with larger smolt. This way we can utilize synergies between open-net operations and land-based. For us, this option creates more value.

Q. In your opinion, what are the main challenges facing the salmon farming industry?

A. The challenges are related to reducing the risk factors that present themselves during production. That's why it's important to care for the environment and be aware of the biological hiccups that can occur among farmed salmon. If we don't do a good job in this area, then salmon as a food product might get a bad rep.

Q. What are your predictions for salmon prices in years ahead?

A. The global demand will increase by 1.5 – 2 million tonnes the next 10 years. I think that land-based farms might be able to yield around 200,000 tonnes, while new offshore farms will yield 200,000 tonnes. And then there might be some tonnes to gain from increasing capacity on existing farms. Still, it will be hard to meet the demand. And thus, I think the salmon prices will stay high.

Q. Tell us about your expectations for NASF 2020.

A. Well, I have participated each year for almost a decade, and will be there in 2020 as well. The event attracts high profile investors and seafood companies from all over the globe. I think it's an excellent opportunity to expand your network and get the most relevant industry information.

We hope to see you at the 15th annual North Atlantic Seafood Forum in Bergen 3–5 March! For more information or to register for the world’s largest seafood business conference, visit the NASF website. Sign up by 31 January to take advantage of special early bird pricing!

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