Nordic Aquafarms to build $500m salmon farm in Maine

Chief executive Erik Heim tells Agri Investor that the company's move into the US comes amid growing investor appetite for onshore aquaculture after a doubling of costs for sea-borne fish farms.

Privately held Norwegian salmon producer Nordic Aquafarms has entered the US market with the announcement of plans to build an onshore Atlantic salmon farm in Maine, worth up to $500m.

The facility will be located on a 40-acre plot outside the town of Belfast. It will have an annual capacity of 33,000 tons, including hatcheries and fish processing.

Construction of the facility marks Nordic Aquafarms’ entry into the US market. The company is backed largely by Norwegian family offices, some of which are connected with the shipping industry, according to chief executive Erik Heim.

Heim told Agri Investor that Nordic Aquafarms’ search for a new production site started globally and took about six months to complete before settling on the location in Maine. The search was guided by the need for access to cold water, fresh water and sea water resources, with no pollution and easy access to demand centers, according to him.

“Maine is a seafood state,” he said.

Public backing

Heim added that the facility will be built in stages, with the $150 million initial phase paid for through equity financing and $8 million in sustainability grants from the EU and the governments of Norway and Denmark. In future phases, he said, the company plans to use export guarantees from Nordic producers to help secure bank loans. Final costs for construction are expected to be between $450 million and $500 million.

Now that Nordic Aquafarms has secured the site, Heim said attention will turn to getting all the permits necessary for construction. Given that all discharge from the facility will be treated and recycled and sustainability is a key focus of his operations, he said that the project has received strong support from local officials. Its statement announcing the facility included words of support from one of Maine’s Senators, and references to meeting with the other Senator, a Congressman and the State’s Governor.

“A lot of the early innovators have made their fair share of mistakes”
Erik Heim, Nordic Aquafarms

Nordic Aquafarms has yet to settle on a recirculation system provider for the Maine facility, Heim said, adding that the company has worked with Veolia Water Technologies on its facilities in Europe.

At the IntraFish Seafood Investor Forum in New York in May, panelists compared the markets for land-based and sea pen aquaculture and offered predictions as to which would find favor amid a surge of investor interest the sector.

Risk capital appetite

Heim said his company and another, Atlantic Sapphire, are the only international players currently investing in inland aquaculture at an industrial scale. There has been a learning curve in the aquaculture industry, according to Heim, who described his company as a “fast second-mover” in looking to establish a presence in the US market after Atlantic Sapphire announced plans for a $350 million onshore facility outside Miami last year.

“A lot of the early innovators have made their fair share of mistakes,” Heim said of aquaculture more broadly. “We’re the company that’s choosing a completely different direction from the incumbent industry. We are specialized only in land-based production, we don’t do anything in the sea.”

Heim said that over the past seven or eight years, sea life and biological issues have brought about a doubling in production costs for the sea pen segment of aquaculture, pressuring prices up to cost parity with its onshore counterpart when pursued at sufficient scale.

“What we are seeing in Norway now is significant risk capital interest in land-based, while they are seeing the growth prospects of sea pen flattening out due to lack of locations,” said Heim. “In the US, I don’t think it’s matured yet. These smaller, land-based farms in the US have remained small and almost philanthropic in nature; idealistic. We haven’t really seen any US operations take this on a large scale yet, but it’s coming.”