Company

Nordic Aquafarms, a Norwegian company operating 3 yellowtail kingfish facilities in Norway and Denmark, has decided to expand its yellowtail kingfish business to Humboldt County, California, where its project site is currently in the permitting phase. Nordic Aquafarms has operated a yellowtail kingfish hatchery and a grow-out facility in Denmark since 2017 and will transfer knowledge and broodstock from these operations to California.

“We see a great potential for yellowtail kingfish in the US and we are looking forward to bringing the knowledge from our Scandinavian farms to California. We have good biological results in Scandinavia, the market for this fantastic product is strong, and the property in Humboldt County is unique on the West Coast with its existing infrastructure.
A yellowtail kingfish farm can be profitable at smaller scale, due to its higher prices and strong performance in RAS systems, enabling us to develop a smaller facility than planned for salmon, that can be expanded alongside the growing market,” says CEO of Nordic Aquafarms, Bernt Olav Røttingsnes.

“The US West Coast is the largest market for yellowtail kingfish outside of Japan, and we are looking forward to introducing a locally produced product of high quality to this important market. Within 12 hours of trucking distance, we can serve fresh fish to more than 50 million potential customers,” says Brenda Chandler, CEO of Nordic Aquafarms USA, a subsidiary of Nordic Aquafarms.

Following completion of the permitting process, the company plans for construction of a 2,000-3,000MT facility as phase 1. Fully built out, the facility may produce above 10,000MT yellowtail kingfish annually.
The property at Samoa Peninsula has access to two sea chests, an outfall pipe, and a substation with sufficient capacity for delivery of electricity. The remaining permits are expected to be granted within the next 15 months.

Nordic Aquafarms Europa has produced salmon at Fredrikstad Seafoods in Norway since 2019. The last salmon was harvested earlier in 2023 and Fredrikstad Seafoods is now preparing for production of yellowtail kingfish, expected to start in July 2023.

The ownership of the project in California will be transferred from Nordic Aquafarms Group to Nordic Aquafarms Europe together with ownership of the RAS engineering team in Nordic Aquafarms Technology (NAF Tech). NAF Tech will be responsible for the technical design of the US farm.

The final harvest of land-based salmon from Fredrikstad Seafoods has been taken after almost 4 years of production! But it is far from the end – quite the opposite – as we are now preparing to start production of yellowtail kingfish; the same species we are producing in our Danish facilities. We end salmon production on a high note with average weights of +5 kg and with the very last individual leaving the system being 15 kg!

Beginning in Q2 2023, yellowtail kingfish fingerlings from our hatchery in Denmark will be delivered to Fredrikstad, and together with the existing and new production modules in Denmark, annual production of yellowtail kingfish will increase to 2,000 MT in 2024.

Members of the US Nordic Aquafarms team in Denmark: Interim CEO and CFO Brenda Chandler; EVP Construction Steve Sachs; SVP Projects Ed Cotter; SVP Production Cathal Dinneen; SVP Technology David Noyes; VP Quality Nick King; and NAF Tech’s Simon Dunn.

Nordic’s US team traveled to the site of NAF Europe’s Sashimi Royal yellowtail farm in Hanstholm, Denmark to continue engineering and design work planned for the US projects in Belfast and Humboldt. This visit was able to bring together for the first time since COVID our US staff, our NAF Tech Team, and our Norwegian leadership.

“We were able to observe the RAS technology and expansion currently in progress, and our US fish farmers were able to work together in person with our Danish counterparts as we continue to share the abundant knowledge we all have as experts in our chosen fields.” states Chandler. “Although located in different countries we all have the same goal – to produce fresh, high quality fish, using environmentally sound and state of the art RAS technology.”

During the visit Sashimi Royal celebrated a “topping off” ceremony, a traditional celebration by iron workers when the last beam of structural steel is placed. In Denmark, the occasion is marked with wreaths and the Danish flag. “Traditions such as this are global; in the US we mark these occasions with a Christmas tree for instance.” states Sachs. “But the accomplishment and sense of pride in purpose is universal.”

 

In April of this year, Sashimi Royal in Hanstholm, Denmark, broke ground on Phase 2 of its multi-phase project. The juvenile grow-out building under construction is moving along as planned, and we anticipate introducing fish to the new units by May 2023. Sashimi Royal produces yellowtail kingfish, a popular (and very tasty) high-quality fish used by leading sushi and Michelin chefs worldwide.

The expansion project, which has been managed by our own talented in-house NAF Tech team, has been fully financed through equity and debt with a total investment of $15 million.  NAF Tech has incorporated a design of proprietary technology and this expansion will double production capacity of yellowtail kingfish at Sashimi Royal, with room for future growth and expansion in Hanstholm. This newly expanded facility will also enable production of yellowtail at Fredrikstad Seafoods, preparing us for our transition from salmon to Kingfish in Norway.

The photos below show the last two weeks of progress:

Nordic Aquafarms (NAF) is one of the early pioneers in RAS grow-out in Scandinavia in the past decade – the first one out in Norway with Atlantic Salmon and still the only producer of Yellowtail Kingfish in Denmark. We have often talked about learning cycles in RAS. Although we have avoided major incidents and have good biological results, we have had plenty of learning and fixing along the way. How you absorb and use that learning is critically important.

One of the first lessons we had was the value of a strong in-house RAS design team. NAF addressed this by establishing NAF Tech with a team of proven designers who had delivered facilities to MOWI, Grieg Seafood, and others. In the past 3 years we have had a design team with an excellent design track-record committed to NAF only. The benefit is also that they have strong ownership to solutions and outcomes.

Becoming familiar with and testing equipment in our pioneer facilities at moderate scale was vital for NAF. In our pioneer facilities we have dealt with corrosion issues, excessive noise in certain vendor equipment, equipment failures, and more issues in various vendor solutions. Over the past years we have worked through it all and made changes to correct problems. That learning has gone into the design of our future facilities.

Compliance is also a balancing act in a pioneer stage. On discharge, we are within total discharge limits for all our grow-out farms. We did experience discharge of certain nutrients above per kilo limits along the way in our Danish operation, which is a metric in Denmark. One lesson learned was that the optimal feed levels for Kingfish as a new RAS species were higher than first anticipated, with related discharge increases. This pointed to a need to also upgrade our hatchery operation which even with an overall small discharge ended up with somewhat higher discharge than anticipated. Even if our total Danish operation remains well below gross discharge limits, we are pushing down levels in both our facilities there to enable compliance and next step expansion. NAF has plenty of room to expand within our gross discharge permit levels in the near future. Treatment technology has developed significantly since the early days when Danish facilities were designed, and we are now upgrading with more advanced technology developed for our US projects. Salmon has been more predictable with all the accumulated knowledge in the industry on FCR and thus discharge levels.

The key in RAS learning curves is to work with the authorities on development and improvement plans, which has been the case in all our locations. With good adaptive management practices in place, it is possible to jointly address learning and improvement areas in a constructive manner. With COVID under control in Scandinavia, we are now in process with next step upgrades and expansion. Alongside that comes our US expansion.

We have always said it is wise to start RAS on a moderate scale, to learn, and then to scale. The learning cycles in RAS projects are 4-5 years – learning takes time. Our experience clearly demonstrates that it is crucial to allow for learning cycles to better manage risk before going to larger scale. This is how NAF has avoided major incidents, and why we will be well-positioned to avoid them in the future. The hard work continues!