Steadily falling prices – Fish farming no longer interesting investment

Save Bantry BayThe Norwegian company TINE SA (known mainly for dairy products) has apparently recently decided to sell its majority shares in Salmon Brands AS (SALMA brand) according to a publication on 19.02.2012 on http://www.nmf.no/. This is probably due to the fact that “fish farm installations had difficulties during the past years” and the article mentions “steadily falling prices” of the fish, so that fish farming is no longer an interesting investment proposition.

There has also been issues in Finnvik (Tromsø) and generally in the northernmost county of Finnmark with sick fish – at least 2 million of Salmar Nords’ fish had to be culled because they were infected with Pancreas Disease (PD). According to Merck (http://aqua.merck-animal-health.com/diseases), PD “is an important economic disease of European farmed Atlantic salmon. It can cause significant losses due to morbidity, mortality and reduced production. Chronic PD has also been known as ‘sudden death syndrome’ (SDS). […] The causative agent was only isolated in 1995 and was shown to be an alphavirus, now known as Salmon Pancreas Disease Virus (SPDV).” Recent studies have indicated that it is very similar to ‘Sleeping disease virus’ of rainbow trout. “Pancreas Disease has been described in Scotland, Norway, Ireland, France and the west coast of the USA in farmed Atlantic salmon. Due to the difficulty of isolating SPDV from natural outbreaks of PD and the widespread distribution of Infectious Pancreatic Necrosis virus (IPNV), which can mask the SPDV and the disease in farmed salmon, PD is significantly under diagnosed in the field. […] Transmission is primarily due to direct fish-to-fish contact, but the involvement of other marine reservoirs such as molluscs, crustaceans and wild fish, or vectors such as sea lice, cannot be ruled out.” If you find this is scary, there’s more on that website selling pharmaceuticals to the fish industry!

———-

The French paper Le Nouvel Observateur in December 2011 an article on the disastrous effect of fish farming on the Norwegian environment, see: http://www.rue89.com/rue89-planete/2011/12/24/le-saumon-ruine-ecologique-de-la-norvege-227529, which mentions that the Norwegian Fisheries Minister herself owns shares, valued at several million euros, in fish farms. She is the one appointing the directors of the three public organizations that are supposed to control and regulate the fishing industry, thus being both “judge and party” and not really impartial. The discussion was pursued in many French media, just before last Christmas, ruining the appetite of many French – who are among the best customers for Norwegian salmon especially during the festive season. How is the fish industry regulated in Ireland? Are its regulators as independent and as attentive as the Irish financial regulators were a couple of years ago??

Advertisements

6 thoughts on “Steadily falling prices – Fish farming no longer interesting investment

  1. And yet PD virus is a walk over compared to ISA virus in Organic Farmed Salmon. We are trying to pry open the Cohen Report on ISA virus in Organic Farmed Salmon. It caused “wipe-out” in farms and Brain Tumours in Salmon. It has a structure similar to H1N1.

  2. According to the “Review of Benthic monitoring at Irish Finfish Aquaculture sites during 2010” by Francis O Beirn of the Marine Institute, dated February 2012: “Non-reporting continues to be a major issue in spite of notification, by the AFMD of DAFM, to all relevant producers that surveys were required for their aquaculture sites. […] As identified previously, it is clear that some producers comply by reporting 100% ofthe time, while there are other producers that have consistently failed to submit reports or give any iridication as to why they have not submitted reports. The reason for the non-submission of benthic monitoring reports is unclear and unsatisfactory and it is important that this issue is investigated and appropriate actions taken to ensure full compliance. In terms of environmental compliance and as indicated above, the conditions at sites that have exceeded standards or are at risk should be closely monitored in future monitoring events.” Does this mean that following the required protocols, although it is officially compulsory, still relies on the individual companies’ choice as to whether or not file a report? Who is regulating and supervising this?

  3. There was an article on November 11, 2011 by Meera Bhatia of Bloomberg LP (http://mobile.bloomberg.com/news/2011-11-11/fredriksen-fish-farmer-chokes-on-salmon-glut-corporate-finance) according to which “Billionaire shipping tycoon John Fredriksen’s Marine Harvest ASA (MHG), the world’s biggest salmon farmer, is grappling with a supply overhang that is weighing on profit and may trigger a breach of loan covenants.” Recovery cannot be expected before 2013.

    A news item on 18.11.2011 in the Fish Farmer Magazine (under http://www.fishfarmer-magazine.com/news/fullstory.php/aid/2168/Marine_Harvest_cautious_over_production.html) states “Marine Harvest CEO, Robert Riethmüller, has said the company will not expand in 2011 or in 2012 because of the Chilean health situation after the crisis caused by the virus of infectious salmon anemia (ISA) since 2007.”

    In view of this, do they really really need another farm?

  4. The Marine Harvest report presented at the Intrafish Seafood Investment Forum in New York on 14 February 2012 (www.intrafish.com/incoming/article1271662.ece/BINARY/original) indicates as “Outlook”:

    – Challenging supply situation in 2012 – continued price pressure [i.e. overproduction leading to falling prices]
    – Positive contribution from geographical market expansion [Do they mean Ireland? Or have they found new markets to supply with farmed salmon? The Russians are keen on fish but unhappy with the way the Norwegians are using lethal bend nets up in Finnmark, capturing a large proportion of the wild Finnish and Russian salmon returning to the rivers, see http://www.asf.ca/news.php?id=827&type=news%5D
    – The biological risk in Chile is still considered to be high [the aftermath… pollution in Chile will continue to have consequences for many years, do we want this to happen in Ireland too?]
    – Strong focus on capital efficiency and cost measures [they won’t be paying high salaries to lowly employees, though the top cats as always cream off: Mr. Jørgen K. Andersen, Chief Financial Officer of Marine Harvest ASA, and Mrs. Marit Solberg,
    Managing Director of Norway Operations, for example, each get an annual compensation of around NOK 15’000’000, corresponding to approx. €2’000’000 – one of them here in Ireland would absorb nearly the whole proposed €3.5 million investment!]

    How are the €3.5 resp. €13.5 million to be invested exactly? Does anyone have information in this connection? Has anyone seen a business plan for this venture or a job advertisement for the promised local jobs?

Share your opinion!

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s