December 11, 2015
Marine Harvest to build new feed factory
Marine Harvest ASA is planning to build a new 170,000-tonne feed factory in Scotland by 2018.
The specific location is yet to be decided. The investment is estimated at US$121 million and will be phased over the years 2016 to 2018 (with about 95% of the capital expenditure falling within 2017-2018).
Marine Harvest expanded into fish feed with its first factory opening at Bjugn, Norway in 2014. The main reason cited was that feed is a significant part of the cost of producing salmon. The factory at Bjugn has over the past 18 months "proven to be a success". Today the factory covers about 80% of the company''s Norwegian feed requirements.
Marine Harvest sees, however, that third party European feed purchases remain significant within Scotland, Ireland and the Faroe Islands as salmon farming centres are currently completely supplied by external feed companies. A second feed factory is therefore in line with the company''s strategy of being a fully integrated protein company. The range of feed types will be broadened to include starter feed for freshwater and organic feed for its Irish operations.
The investment is expected to yield a capital return target in the range of 15%. The construction phase is planned to commence in 2017 and completion of the feed plant expected in the first half of 2018. There is potential for further capacity expansion. All existing external feed supply contracts in Scotland, Ireland and the Faroe Island will expire by the first half of 2018.