Undercurrent News, 22 Jan 2014: First ‘on-land salmon brand’ targets market growth, expansion

First ‘on-land salmon brand’ targets market growth, expansion

January 22, 2014, 9:24 am

By – Neil Ramsden

Danish on-land salmon farming operation Langsand Laks has its sights set on upping production from 1,000 metric tons to 4,000t, and selling to the US, Scandinavia and the UK, its CEO and founder told Undercurrent News.

At present the firm, set up by recirculation aquaculture entrepreneur Thue Holm, is harvesting its first batch of salmon grown entirely within tanks, making it the first to put such fish to the market, according to Holm.

Langsand Laks, which built and stocked its facility in Hvide Sande in 2011, this month harvests its first batch for sale to the US and Canada, and the EU (sold through fellow farmer and supplier AquaPri).

The facility should be able to produce 1,000t once up to speed, though the 2014 target is 700t. Soon though, depending on the speed at which markets can be developed for the product, the hope is to expand production to 4,000t.

The plant was built by partner Billund Aquaculture, a Danish supplier of farming technology and one-time employer of Holm himself. Billund is also currently building an on-land recirculation farm in the Gobi desert, to cater to the Chinese market.

The US is a split market for Langsand’s salmon, said Holm. The west coast has a real interest in the on-land technology, thanks in large part to the presence of NGOs pushing for an end to at-sea farming, while the east coast consumers are the ones that tend to eat farmed Atlantic salmon.

Holm’s other company, Norwegian farmer Atlantic Sapphire – which uses the same sustainability brand and technology – has already established a sizable operation in the US, with a sales office in Miami, Florida.

After working at this market for two years, this will be the firm’s focus in the coming months, said Holm.

The founders of Atlantic Sapphire – who also founded the salmon farmer Villa Organic back in the early 2000s – are now chairmen of this company, with one of them living in the US, using seafood connections to grow the market there.

To get the growth required to expand, and in doing so cut costs, the firm hopes to break into the Danish, Nordic and UK markets this year.

Langsand focuses its selling around creating a brand of its sustainable credentials; no sea lice, no impact on the seas, and a leaner, more controlled product. Its ‘Oceanus’ recirculation system allows it to put a 30 – 40% price premium on the salmon as it sells to high-end foodservice.

This is just as well, as the costs behind recirculation farming are known to be high – often too high to make a commercially viable business out of it. However, Holm told Undercurrent the costs of the Oceanus system are only 20 – 30% higher than those of the most efficient Norwegian salmon farmer.

Plus, these costs come down as, or if, the plant is able to expand, through economies of scale.

The plant in Hvide Sande has relatively few grow-out tanks for its fish, cutting costs. “We could have doubled the costs of the investment, if we’d added grading tanks,” said Holm.

“But it didn’t matter, there is plenty of demand for smaller salmon as well as larger.” The facility produces salmon between sizes 3 and 6 kilograms, and an average size of 4.5kg.

Longer term, Holm wants to see his companies expanding around the world to where salmon is sought after.

“At the moment you have markets in Europe, the US and southeast Asia which fly salmon in. We can save the environment that CO2, and we can save our costs and buyers’ costs, by producing locally,” he said.

See http://www.undercurrentnews.com/2014/01/22/first-on-land-salmon-brand-targets-market-growth-expansion/?utm_source=wysija&utm_medium=email&utm_campaign=salmon_jan_24_2014

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