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PSP-backed Cooke Aquaculture and Akva partner on salmon scheme

Akva chief executive Hallvard Muri says the first of at least five projects resulting from the partnership will be in Chile and comes at a time of significant investor interest in land-based aquaculture.

PSP Investments-backed seafood producer Cooke Aquaculture has partnered with a unit of aquaculture equipment supplier Akva Group, to develop land-based smolt projects.

The first project will be based in Chile, where equipment deliveries are expected between Q4 2019 and Q4 2021.

Cooke’s vice-president for public relations, Joel Richardson, told Agri Investor the recirculating aquaculture system is to allow salmon to grow larger on land before being transferred to saltwater farming pens.

Salmon are currently transferred at a weight of around 120 grams, according to Richardson, but the Chilean facility will allow salmon to reach 300 grams before transfer. After transfer, it takes between 12 and 18 months for salmon to reach maturity.

“These new facilities help to reduce fish handling, reduce time at sea and reduce days to market using the latest innovations and technology,” Richardson said.

He added that Cooke is already an equipment customer of Akva, and the co-operation agreement with Akva marks the first time Cooke will work directly on a recirculating aquaculture system.

The partnership comes amid a rush of investment into the land-based segment of the aquaculture market. Akva chief executive Hallvard Muri highlighted efforts to produce more and bigger smolt as a particularly active corner of the market.

After starting in Norway, efforts to enhance smolt production have been carried out by salmon producers in Canada and Chile, the CEO said.

“This is a balancing act for them,” Muri said.  “It is obviously a tremendous investment to build new post-smolt facilities that can grow bigger smolt on land, but also, of course, it means [the opportunity to meet] a lot of new demand,” he said.

Investors are also increasingly interested in projects that aim to raise salmon to full maturity in land-based facilities, Muri said, adding that this industry is still at an early stage. The CEO said he is “flabbergasted” by the stream of new projects, and highlighted Atlantic Sapphire’s project in Florida as a promising example.

Estimating total land-based salmon production at around 10,000 tons annually, Muri said recent years have seen announcements of projects that aim to add as much as between 800,000 to 1 million tons of additional capacity.

“That is very much an opportunistic case driven by the spreadsheets and eager investors and less so by the industry. In the next 10 years – I don’t know, 100,000 maybe 200,000 tons [are likely to be built] – there are a lot that are going to be spoiled before people really make money on it.”

Land-based facilities typically cost between $100 million and $300 million and have long execution times, Muri said. A key challenge such projects are likely to face is limited availability of required operational competence.

“If something goes wrong in a land-based facility, it happens in a matter of minutes, then your biomass is dead,” Muri said.

PSP Investments declined to comment and Cooke declined to comment on PSP’s role in the decision to form the partnership with Akva.