China salmon RAS developer has raised NOK 100m for flexibility and buffer

Norway-based Nordic Aqua Partners, which is building a land-based salmon farm in China, has raised NOK 100 million (£7.43m) with a share issue, it said in its third-quarter 2023 report today.

Much of the money came from existing shareholders including Kontrari AS, which owns 25.96% of the company and bought shares worth NOK 62.7m.

“Nordic Aqua has solid financing. However, since we operate in an industry with many risks related to both market development and biology, the board has decided to increase liquidity with a further NOK 100 million in new equity, in order to increase operational flexibility and establish a financial buffer,” the company wrote.

Harvest in March

The 4,000-tonnes-per-year phase 1 of the company’s recirculating aquaculture facility at Gaotang, Ningbo, is close to completion and at the current growth rate the first harvest is expected next March.

Fish farming equipment for phase 1 was delivered on time at a total capital expenditure of €53m. The construction of the facility and infrastructure for the farm is being carried out by the local authorities in Ningbo who are leasing the building back to the company.

“The third quarter of 2023 was another eventful quarter for Nordic Aqua. In general, production went as planned and fish health remains strong. We continued the important work of increasing our management capacity and expertise as we continue to grow,” wrote chief executive Ragnar Joensen in a Q3 report.

“Biological results are good for all batches, with mortality below 1% from 150 grams to 2.1 kg and no signs of maturation. Growth remains strong, and as of mid-November total biomass was 997 tonnes.”

Full capacity in Q1

The largest fish have an average weight of 2.8 kg and are expected to reach a harvest weight of 5.3 kg by March 2024 at current growth rates.

Nordic Aqua expects to reach full production capacity during the first quarter of 2024, with a total of eight batches in production at the same time.

“Competence and organisational capacity are core elements to succeed in the development of land-based salmon farming. Nordic Aqua continues to develop the organisation, and during the quarter the company made several new appointments which added vital expertise across the organisation,” added Joensen.

The company is currently working on optimising the final design of the RAS systems for growth in phase 2, which will double capacity to 8,000 tonnes.

Continuous improvement

“Fine-tuning technology and processes to improve production and shorten production cycles is a continuous process at Nordic Aqua, and operational excellence and control will always be prioritised for advanced project development,” the company said.

It has decided to spend more time optimising growth in the RAS systems. Therefore, the first ova intake for phase 2 is expected to be in Q3 2024 with first harvest in Q3 2026.

Investigations into an accelerated expansion to phase 3 to take capacity to 20,000 tonnes are also well under way and a final decision will be made during the second half of 2024.

Phase 4 would add a further 30,000 tonnes. “The dedicated land has potential for further increase of production to 50,000 tonnes of Atlantic salmon, all a part of Nordic Aqua’s medium-term plan,” said the company in its report.

As Nordic Aqua is still in a development phase without operational income, it estimates a financial loss of around €6m for 2023.  Available liquidity at the end of September was €36.5m.