Groundworks for Samherji's Salmon Garden began in October 2024. The land-based aquaculture facility will be built in three phases.
Photo: Steinar Sæmundsson / Samherji hf.
When we learned in late April that Samherji Fish Farming had completed the financing for Phase 1 of its Salmon Garden, securing EUR 235 million, we also knew the equity round would be upsized due to growing investor interest. Now, the company has announced that, due to the success among investors, the capital raised has increased to EUR 210 million from the initial EUR 125 million, which will allow it to build the facility faster than expected.
"Just like catching and processing, land-based aquaculture is a capital-intensive, knowledge-driven industry, where value creation depends upon heavy investment. Increased investor interest in this project is a vote of confidence for Samherji Fish Farming and reflects their trust in the Salmon Garden," Thorsteinn Már Baldvinsson, Chairman of the Board of Directors of Samherji Fish Farming, said about the equity private placement.
"Accepting funds from investors entails significant responsibility. They assume we will live up to it and fulfil their expectations, which we intend to do. I want to thank the employees of Samherji Fish Farming, as well as our partners and advisors, for their professionalism and a job well done in relation to this project," he added.
A subsidiary of Iceland's Samherji hf. – which recently changed CEO -, Samherji Fish Farming announced Salmon Garden in March 2023. Intended to be one of the world's largest salmon farms, once completed, the new land-based aquaculture facility located on the Reykjanes Peninsula in Iceland will produce 36,000 tonnes of liveweight salmon, equivalent to 30,000 head-on gutted (HOG) tonnes.
The construction of the Salmon Garden is planned in three phases. As mentioned above, the financing of Phase 1 of the project was completed at the end of April with the raising of a total of EUR 235 million from two components: an equity private placement of EUR 125 million and a syndicated loan of EUR 110 million.
Of this equity capital, Samherji hf., owner of 99% of the shares of Samherji Fish Farming, contributed approximately half. The remainder was completed by a group of investors led by the Icelandic private equity fund AF3 slhf. - managed by Alfa Framtak ehf. - and two family-owned investment companies, CCap of the Netherlands and Snaebol ehf. of Iceland.
This group of investors has now been joined by six Icelandic pension funds: Almenni Pension Fund, Festa Pension Fund, Gildi Pension Fund, Pension Fund of Commerce, LSR, and Stapi Pension Fund. According to the company's release, total financing, including the syndicated loan, amounts to EUR 320 million, or over ISK 45 billion.
Now that the equity placement by shareholders for the first two phases of the Salmon Garden has been completed, Samherji Fish Farming can immediately begin preparations for the design and construction of Phase 2 of the facility in Reykjanes. As mentioned, as a result of this, the company will be able to build the facility more quickly than planned. Meanwhile, site preparation work, which began in October 2024, continues underway.
Under development since 2020, the Salmon Garden will be located specifically in HS Orka's Resource Park, adjacent to the Reykjanes Geothermal Plant, giving it access to 100% renewable energy from the plant. The facility is planned to include a freshwater RAS hatchery, an on-growing section with three on-growing stages, and a harvesting facility.
Once completed, approximately 100 people will work on the project, mostly in knowledge-based roles. As the company has previously explained, these 100 new direct jobs will be joined by a similar number of indirect jobs in associated services and industries.
In addition, the facility will also benefit from the support of the 120 employees and specialists currently working at Samherji Fish Farming, which has been successfully raising Arctic char and salmon for more than two decades. A leader in land-based aquaculture, the company is currently the world's largest producer of Arctic char, with a market share of around 30%.
If Samherji Fish Farming currently produces 6,000 HOG tons of Arctic char and salmon products, it is expected that, once the Salmon Garden is fully constructed, that production capacity will multiply. The company estimates that, when fully operational, the new land-based facility will generate around EUR 300 million per year in export revenues.