US Seafood Entrepreneur Betting On US Inland Farmed Salmon
Under Current News
September 24, 2014, 5:37 pm
Longtime fish farmer and former Villa Organic CEO Johan Andreassen is planning a bet on inland farming of Atlantic salmon in the United States.
Now the chairman of Norway-based Atlantic Sapphire, Andreassen is in the permitting process for a $250 million-$300m salmon farm in Homestead, Florida, capable of producing 30,000 metric tons a year of whole gutted Atlantic salmon for the US market.
He expects to have the permits in place a year from now and after that will start looking to raise capital in a private equity deal.
Atlantic Sapphire is in discussions with two or three of the biggest investment banks in Scandinavia about advising the company on the capital raise, which will probably take place in Norway and include American investors, he said. The company will probably select a banker in nine to 12 months, he said.
Andreassen, a 37-year-old Norwegian, started his seafood career catching cleaner fish for salmon farmers. In 1995, he and his cousin founded Villa Leppefisk in Norway and built it into a vertically integrated organic salmon farming company called Villa Organic.
He and his cousin sold their shares in 2009. In 2013, SalMar bought more than half of Villa Organic and Leroy Seafood Group also bought a substantial portion of the company.
During his years with Villa Organic, Andreassen saw firsthand the logistical challenges of farming salmon in the far north of Norway, trucking it 2,000 kilometers to have pin bones removed at a plant in the southern part of the country and then sending it to other European nations to be flown to the United States.
After leaving Villa Organic, he and his cousin founded Atlantic Sapphire in 2010 and helped form Danish Atlantic salmon farmer Langsand Laks, which is recovering from some production problems, to prove the inshore farming technology he now wants to use for the Florida salmon farm.
Atlantic Sapphire calls the technology Oceanus, a recirculating water system it says recreates a sustainable living environment for Atlantic salmon inland.
The farm would be capable of producing about 10% of the farm-raised salmon consumed in the United States, which imports most of its salmon, he said.
Once the farm is producing, it is likely that Platina Seafood Inc., of which Andreassen is president, would have a role in sales and marketing of fish raised by Atlantic Sapphire. The Miami-based partner company of Norway-headquartered Platina Seafood AS currently imports from Norway, Chile and Denmark and sells to companies like seafood distributors and wholesalers in North America and the Caribbean.
Longer term plans for Atlantic Sapphire include a farm in Southeast Asia, he said.
Andreassen aims to build Atlantic Sapphire into a leading land-based salmon farm over the next five or six years, after which the company will have to decide whether to sell itself. Any of the large producers would be interested in buying a company that can produce 30,000t profitably, he said.
At the moment, the company is open to investing in projects similar to its own in the form of joint ventures, franchising or helping plan and design farm operations, he said
Atlantic expects a harvest of around 500t this year from its Danish operations will result in revenue of $4m-$4.5m based on a salmon price of $8-$9 per kilogram, he said. Using that price range, revenue from the new farm could be $240m-$270m.