£36m raised for on-land salmon farm in Iceland

An Icelandic company has raised €42 million (£36m) to help fund an on-land salmon farm on the Westman Islands, an archipelago off Iceland’s south coast.

Laxey, previously known as Icelandic Land Farmed Salmon, has already started construction of its facilities. The project consists of a hatchery and a rearing facility.

The company aims to produce 27,000 gutted weight tonnes salmon annually by 2031 in a construction consisting of six sections. In comparison, the current production of land-based salmon in Iceland is less than 2,000 tonnes.

The hatchery will start operation by the end of this year and production in grow-out tanks will commence in 2024, when the first section will be ready. The sale of salmon will start in late 2025.

Cashflow positive

“The first section will be cashflow positive as a stand-alone operation, with each additional section increasing the efficiency of production, with lower investment costs and operating costs per kilo produced,” the company says in an article on its website.

According to the company, the conditions for land-based salmon farming are very good on the Westman Islands.

The islands are a stronghold for the Icelandic fishing industry and have a strong tradition of and deep knowledge of protein production and seafood export.

“The infrastructure is strong, the community is cohesive, and access to talent and knowledge in food production is very good. In addition, emphasis will be placed on transporting fish to market by sea, which reduces the salmon’s carbon footprint,” Laxey says.

When the project is fully operational, Laxey will employ more than 100 people.

Renewable energy

Laxey will base its production on 100% renewable energy sources and will recycle biological waste for fertiliser production.

The grow-out facility will use a hybrid flow-through system where approximately 65% of the water is reused, while 35% is fresh seawater, pumped from boreholes in the area, at optimal water temperatures for salmon farming.

Laxey said the company was established by a group of entrepreneurs, led by a local family with over 75 years of history in the seafood industry, extensive knowledge, and a strong reputation. The family has recently sold its seafood companies and is reinvesting in the land-based salmon farm as an anchor investor.

Great opportunities

“We are extremely proud to have reached this milestone and appreciate the trust our investors have shown by participating in this unique project. Our team has been preparing this project since 2019 and we see great opportunities in the production and sale of Icelandic land-farmed salmon from the Vestmansøyene (Westman Islands),” said company chairman Larus Asgeirsson.

Mar Advisor was the sole financial advisor for the company in what was a local financing round.

“As construction progresses, the company will seek new stakeholder partnerships and capital in the Nordic and international capital markets,” Mar Advisor said.

For that purpose, Laxey has brought in the investment bank Arctic Securities, headquartered in Norway, as sole global coordinator and bookrunner, with Mar Advisors continuing to be the company’s financial advisor.

A promotional video of the project can be viewed here.