Strong quarterly results boost sector confidence ahead of the Scottish salmon inquiry but red tape is still hindering growth, writes Jenny Hjul in this month’s round-up of industry news

The past month has brought welcome Q2 results for Scottish salmon producers after a difficult year in 2023, with much to celebrate as the summer draws to a close.

Mowi’s Scottish operations in Q2 saw a 20 per cent increase in harvest volumes compared to the same period last year, and a slight increase in operational EBIT, driven by better biological conditions.

In fact, in August, Mowi Scotland achieved its lowest monthly mortality rate in over eight years, to around one-third of recent years, which it attributed to cooler sea temperatures as a marine heatwave in the North Atlantic, caused by El Niño conditions, subsided.

Ben Hadfield, COO of Mowi in Scotland, Ireland, the Faroes, and Canada East, said: ‘This weather, combined with our enhanced mitigation measures, such as the use of freshwater treatments and bubble curtains, has proved effective.’

Mowi has been trialling two aeration systems at farms off Skye and South Uist, deploying technology pioneered by Chilean firm Low O2. In one project, a tight microbubbles screen (TMS) was installed at a depth of 25m, creating a barrier fence that blocks out plankton, mainly jellyfish.

The other initiative involves a water upwelling system with aeration discs, which Mowi has found significantly improves environmental conditions for its salmon.

Scotland’s second biggest salmon farmer, Scottish Sea Farms, also fared well in Q2, harvesting 12,200 gutted weight tonnes, almost twice the 6,300 gwt harvested in the same period last year.

The company more than doubled its revenue, producing an operational profit of NOK 234 million (£17 million) against a loss of NOK 144 million (£10 million) during the April to June period last year.

Bakkafrost Scotland, too, recorded a big turnaround in Q2 2024, as both harvest volumes and fish health improved. The firm’s operating revenue was up 55 per cent on the same period last year, from around £60 million to £95 million.

The company’s ‘de-risk’ strategy, which included harvesting the majority of its planned volume earlier in the year to mitigate challenges, has seen lower mortality rates and effective control of sea lice levels and gill health.

With the development of its Applecross, Wester Ross, hatchery and post-smolt facility, Bakkafrost expects to further improve the biosecurity of smolt production in Scotland.

The Faroese owned producer’s investment is benefiting the Scottish supply chain and creating jobs. Aberdeenshire company KR Group has secured a third contract – worth £3 million in total – with Norwegian recirculating aquaculture systems (RAS) specialist Nofitech, to provide steel and cladding for the final phase of the Applecross hatchery.

And another Bakkafrost proposal, for a RAS facility and visitor centre at Hunterston in Ayrshire, will bring 35 jobs to the area if plans are approved.

The Scottish sector also announced last month that in the first half of 2024 the value of exports rose to £431 million, up by 41 per cent compared to the same period last year. Export volume was up by 12 per cent.

France remains the top destination for Scottish farmed salmon, with sales up 91 per cent, but the HMRC figures also showed a big increase in Asian and American markets.

Commenting on the exports, Scotland’s Deputy First Minister, Kate Forbes, said: ‘The Scottish farmed salmon sector is important to our economy, providing well paid jobs in Scotland’s rural and island communities.’

However, against this positive backdrop, the sector warned that slow regulatory reform and under-resourced planning departments were hindering growth. Two years on from an independent review by Professor Russel Griggs, a more streamlined regulation system is yet to be implemented.

‘We have the ability and aspiration to grow, but we need government to urgently reform the cumbersome regulatory and consenting landscape that is holding back salmon farmers,’ said Salmon Scotland chief executive Tavish Scott.

This month sees the resumption of the parliamentary inquiry into salmon farming, with members of the Rural Affairs and Islands committee (RAIC) due to visit Scottish Sea Farms locations on September 23 and sector representatives appearing before the committee on October 2.

With greater supplies, Scotland has the potential to increase its share of global markets, where demand continues to grow.

Scottish salmon is taking a bigger share of a growing Chinese market, according to analysis from Nordic Aqua Farms, a Norwegian land-based salmon farmer south of Shanghai, increasing from nine per cent in the first half of 2024 to 13 per cent in the second quarter.

India, an untapped market but with a population of 1.4 billion people, also presents a huge future opportunity, which the Norwegians and Chileans are exploring.

Offshore licences

Norway is looking to expand its production, meanwhile, with the first fish farming ‘far out at sea’ licences in the New Year.

‘Aquaculture at sea represents a gigantic opportunity for Norway – not only to increase food production of sustainable proteins, but also to secure Norway’s position as a leading seafood nation in the future as well,’ said Ole Fretheim, head of Aquaculture Technology at Seafood Norway.

Some Norwegian producers have already built innovative structures, such as SalMar’s Ocean Farms 1 and 2, that are robust enough to farm offshore.

While salmon companies are investing in their operations in Norway and Scotland, several of the bigger players are now considering their continued presence in British Columbia, following the Canadian federal government’s move to ban on open net pen farming in the province from mid-2029.

‘The basis for the decision lacks scientific merit,’ Mowi wrote in its report for the second quarter of 2024, published in August. ‘Following the political decision, Mowi has decided to initiate a strategic review of the Canada West business unit and will explore all available options before taking the appropriate action.’

Grieg Seafood has also suspended all strategic investment in the region and said in its Q2 report in August that uncertainty remains.

Ground-breaking research that challenges the perceived impact of salmon farms on sea lice levels in wild salmon populations is unlikely at this late stage to change the Canadian government’s mind.

The study, published in the peer-reviewed journal Reviews in Aquaculture, and focused on Norwegian regulatory management, found no measurable impact of farm-associated sea lice infections on wild salmon.

Furthermore, a monitoring programme in a coastal area of Canada where salmon farms have been removed has found that the variability in the percentage of sea lice on wild Pacific salmon remains unchanged.

‘Ongoing research and data support that the salmon farming sector poses minimal risk to wild Pacific salmon, yet government decisions continue to ignore the science and threaten our sector’s future,’ said Brian Kingzett, executive director of the BC Salmon Farmers’ Association.

Misinformation campaigns by activists are undermining balanced policy that would benefit Canadians and the global community, reported SeaWestNews.

‘They blow up phones with stale images, flashy clips, and influencers. Their latest crowning achievement is the indoctrination of unwitting celebrities who they’ve radicalized. Now we have William Shatner – a Canadian – and Leonardo DiCaprio blasting the aquaculture sector.’

To counter negative propaganda, salmon farmers are now hiring their own influencers. Seafood influencer Emily de Sousa joined the Global Seafood Alliance this month, and in Scotland, the US influencer James Sibley has just taken on a new joint role with Mowi and Salmon Scotland, where he will immerse himself ‘in one of the world’s most dynamic and robust aquaculture environments’.