Irish Times, 14 Feb 2014: Bigger catches on the menu as fish-farming giant widens net

Bigger catches on the menu as fish-farming giant widens net

Irish Times, 14 Feb 2014

Marine Harvest chief Alf-Helge Aarskog is hoping his company will benefit from plans for new salmon-farming licences

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Alf-Helge Aarskog sums up Marine Harvest’s business as “growing salmon, selling salmon”. Photograph: Alan Betson

Alf-Helge Aarskog is late for our meeting, but the excuse is fairly good when he eventually arrives – a previous engagement with the Taoiseach and the Minister for Agriculture in Government Buildings overran.

Aarskog, chief executive of Norwegian fish-farming giant Marine Harvest, jetted in especially for the Government face-time and is optimistic that it will bear fruit in the form of some new licences for Irish salmon farms.

Already, the company is the giant of the Irish aquaculture (fish farming) business, responsible for three-quarters of the 12,000 tonnes of farmed salmon likely to be produced in the Republic this year.

But Aarskog says Ireland should be able to raise its annual production to 35,000 tonnes and wants Marine Harvest to be the main driver behind the expansion, as soon as it can get the licences.

He is polite about it but it is clear he considers the wait of close to a decade in the case of some licence applications to be far from efficient. “We would like to grow,” he says, most calmly.

As things stand, Marine Harvest employs about 270 people in Ireland, mostly in Donegal, with more modest operations in Mayo and Kerry.

While its name may not have much consumer recognition, the nature of its business means it tends to be a massive player in smaller communities, such as Fanad in Donegal where it sponsors the GAA team, the community games and the accordion club.

In Ireland, the company’s mostly-organic products might be found in Tesco, in restaurants or on sale under the Organic Salmon Co brand.

For the most part though, the Irish business is about export to continental Europe and the US, and contributing to the €2 billion-plus Marine Harvest recorded in sales last year, and the €300 million in profit.

The group operates in 22 countries and employs more than 10,000 people, so Aarskog can perhaps be forgiven for not having visited every inch of the Irish business and momentarily being confused between the northeast and the northwest of the country.

He sums up Marine Harvest’s business thus: “growing salmon, selling salmon”. This may be playing things down just a touch since, as with any kind of food-rearing, the challenges along the line between success and failure are manifold.

The company’s Irish performance last year was an unfortunate illustration of the precarious nature of farming – it was hit by a combination of of pancreas disease, problems with algae, unusually warm water and dramatic increases in the jellyfish population.

This led to an operational loss of €4.3 million in the fourth quarter alone, with Marine Harvest deciding to hold off on production for all of January and half of this month “in an effort to grow the fish”.

Big potential

Aarskog pays tribute to local management for getting the operation through the various “biological challenges” and says that Ireland is, with the exception of last year, a “very good operation, making good money”.

“If we had more sites, we could spread our operation in Ireland better and wouldn’t be so exposed,” says Aarskog, bringing things back to licences.

He says he and Enda Kenny “both agree” that the industry has big potential in the Republic, with Marine Harvest’s own production levels now just a fraction of where they were in a decade ago before its historical licences became less productive.

He compares the 9,000 tonnes of salmon the company hopes to get out of Ireland this year with the 50,000 it will produce in Scotland.

For Mr Kenny’s part, expanding fish farming would help the Government to meet its goal of increasing the turnover from “our ocean economy” to more than €6.4 billion by 2020.

This would also boost jobs, in theory at least, with the Government’s own figures suggesting that each additional 70 tonnes in salmon production generates a full-time job.

Environmental risks
Aarskog says the two have agreed to meet again in six months, by which time Marine Harvest hopes to have been awarded a new licence for a fish farm at Shot Head in Bantry Bay and to have achieved progress on other sites.

Should the Cork licence be approved, the company will be prepared for an appeal, with groups such as Save Bantry Bay already well-versed in arguments about the potential environmental risks and the benefits of alternative land-based fish-farming systems.

The cool-headed, affable Aarskog will take such challenges in his stride, pushing out counterarguments on how we don’t use water enough for growing food and how fish farming is the most energy-efficient means of producing protein in the world.

He also has a few things to say about how fish farming is not nearly as intensive as some chicken-rearing operations.

For all his management skills and training though, he clearly sees some sort of romance in fish farming, probably dating back from his summer job with a farm near his home on the Norwegian coast.

“I enjoyed it, every moment.”

He quotes the theory that “you don’t need to know anything about the industry to manage it” but doesn’t subscribe to it, preferring the “feeling” he has about fish farming, which led him to study aquaculture at university and work within the industry in some form ever since.

He became Marine Harvest chief executive just over three years ago, having previously led he second-largest Norwegian salmon-farming business.

Recent weeks have been significant for Marine Harvest, as it took a listing on the New York Stock Exchange, becoming the first aquaculture company to do so.

Aarskog is pleased with how the whole thing went and with the opportunities it might provide in the future. He says it is not about raising money (high salmon prices have left the business with plenty of cash) but has signalled an appetite for acquisitions in Chile (a fish farm centre) and Norway.

“We’re in the US market because we have US shareholders,” he says, adding that the six-hour time difference between Norway and the US just wasn’t working any more.

There was also the issue whereby some would-be investors were precluded from investing in Norway but could happily back a US-listed Norwegian enterprise.

The company’s biggest markets are the EU and the US but increased demand from developing middle classes in locations such as Brazil, Russia and China is poised to change this balance.

Likewise, the growth of fish as a fashionable food via sushi is increasing opportunities, with Aarskog reckoning that Marine Harvest fish provides the basis for five million meals every day.

In the case of fresh Irish salmon, this could as easily be on a plate in a Parisian restaurant as in the kitchen of a Boston home, with transport from water to international table probably taking no more than a couple of days.

Aarskog, who claims to eat salmon in some form almost every day, hints that we are perhaps unaware of the lure of the Irish salmon brand, of which more than 80 per cent is organic.

He says simply “being Irish” is a stronger advantage than most countries can claim, with Irish salmon automatically holding “niche” status before any other branding enters the picture.

“You could sell a lot more,” he says, again taking the opportunity to let the Government know that the “best job” it could do on this front would be to allow for “new and better licences”.

CV: Alf-Helge Aarskog

Name : Alf-Helge Aarskog

Age: 46

Job: Chief executive, Marine Harvest

Family: Partner Bodil Steine, who works for an engineering consulting group.

Hobbies: Cross-country skiing, sailing.

Something you might expect: He always tries to work out if salmon on restaurant menus was produced by Marine Harvest.

Something that might surprise: He likes to hunt deer and bears with a bow and arrow, although not in Norway, where the practice is illegal.

http://www.irishtimes.com/business/sectors/agribusiness-and-food/bigger-catches-on-the-menu-as-fish-farming-giant-widens-net-1.1690186?page=3

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