Construction of Phase 2 of Nordic Aqua's Gaotang facility, which will double its capacity to 8,000 tons, is well underway.
Photo: Nordic Aqua Partners.
Nordic Aqua Partners has reported its Q3 2024 results. The company said the results were negatively affected by the problem suffered in July due to high concentrations of the off-flavor compound geosmin, which led to no commercial harvesting during this period. In addition, it confirmed that, as feared, this will impact not only the third quarter but the entire H2 2024.
Moreover, the first commercial-scale RAS Atlantic salmon producer in China has also lowered the harvest forecast for 2025. Although at the presentation of the Q2 2024 report in August, the company's CEO, Ragnar Joensen, said they didn't see any need to change the production plan for next year - the harvest volume range for 2025 was then estimated from 4,500 to 5,000 tonnes - they have finally had to do so.
Now, Nordic Aqua has stated that, as part of the management of the biological situation, about 2,000 tons of salmon are expected to be culled, and no commercial harvest is foreseen in the fourth quarter of 2024. It also added that, in parallel with the gradual normalization of operations, it expects to harvest around 4,000 tons for the full year 2025.
Nordic Aqua said it expects to bring the geosmin situation under control in the coming months. Geosmin is a naturally occurring compound known to be absorbed by fish in all recirculating aquaculture systems (RAS). It is harmless to both fish and humans, but, in high concentrations, it can adversely affect the flavor of the fish.
When the problem was detected at its Gaotang facility in China, the salmon farmer reiterated its commitment to maintaining the highest standards of quality and safety for its consumers, while ensuring that the affected product was used responsibly. Now, it has insisted that it will continue its efforts to ramp up production and resume harvesting salmon "of the best quality and taste."
Thus, even though, as said, there was no commercial harvest in the third quarter - 651 tons of biomass were extracted during the third quarter to optimize the stock -, in the results' presentation, Nordic Aqua was satisfied with the good underlying operational and biological performance for all batches, "with excellent fish health and welfare."
According to the company, the underlying operational and biological performance was good for all batches. Total biomass production exceeded 1,000 tons during Q3 2024, reaching almost 2,800 tons by the end of the quarter, fish health and welfare were good, and mortality rates were low.
"We are encouraged by the progress made in recent months and are pleased to see the resilience of our operations as we rebound from the geosmin setback," CEO Ragnar Joensen said commenting on the development. "With rigorous measures in place and strengthened biological performance, we are now positioned to continue expanding our Nordic PureAtlantic brand in the Chinese market."
Despite adjustments to manage the biological situation, Nordic Aqua Partners' construction of the Phase 2 farming operation has continued as planned. Extra capacity for hatchery, start-feeding, parr unit, and smolt unit are finished and operational, and the first egg inlay was completed in September 2024.
In the same month, the company successfully completed a private placement, raising new capital of NOK 350 million (EUR 29.7 million / USD 33.1 million). Combined with the company's strategic agreement with the Bank of China for long-term financing of the development and construction of its facility at Gaotang, this will secure financing until the completion of Phase 2.
In addition, this financing will also be used for the repayment of short-term debt, capital expenditures related to geosmin improvements, working capital, and other general corporate purposes.
"We are well underway with the buildout of Stage 2, which will double our capacity to 8,000 tonnes. The technical installations are expected to start in January 2025 with first harvest scheduled for the second half of 2026," Ragnar Joensen claimed.
"Preparations for Stage 3, expanding capacity to 20,000 tonnes are ongoing, and a final decision on the timeline will be made during H1 2025," the CEO of Nordic Aqua Partners concluded.