When he took over as interim CEO a month ago, Trond Håkon Schaug-Pettersen claimed that the first harvest would be the "proof of concept demonstrated" of Salmon Evolution. At the harvest announcement, just 15 days later, he repeated the same message but already took it for granted. "In just 7 months we have grown our salmon from 300 grams to harvest weight. Demonstrating proof of concept as to our approach to land-based salmon farming", he said. WeAreAquaculture spoke with him to learn more about this concept and why this first harvest is proof that it does indeed work.
On its website, Salmon Evolution says it not only raises salmon but raises a new standard for salmon. They are a first mover in utilizing the hybrid flow-through system (HFS) to farm salmon on land. This allows them to control and optimize the rearing environment, ensures abundant access to fresh, filtered seawater, eliminates the risk of parasites, and limits the threat of infection. Demonstrate that proof of concept was the way to tell everyone that a different way of doing things is possible and that you can have results and profit without compromising on water quality, fish welfare, or environmental responsibility.
Theirs is not a RAS installation, not a pure flow installation, but a blend where they take the best of the ocean (fresh seawater) about 1/3, and reuse the rest of the water. This hybrid system allows them also to control the temperature. "And we see that by doing that, we can provide the fish with very good growth conditions", says Trond Håkon Schaug-Pettersen. "Basically, ideal and constant conditions all year round", he adds.
In addition to the system, since the company's founding five years ago, Salmon Evolution has also focused on biology. "That's sort of the 1st and foremost, and 2nd, and 3rd, and 4th, and 5th most important thing", its interim CEO and CFO says. "It's all about biology and, in all the things we have done, that's been the number one priority", he confesses. Time seems to have proven them right. "All the assumptions we had going into this project are absolutely realistic", he claims.
The company had a configuration for assumptions such as growth, quality, or mortality, and that's where that realism has been demonstrated. "We have seen that when you provide the fish with good conditions in a controlled environment like this, it is a fantastic potential to get really exceptional performance and at the end of the day, that's what really matters in terms of actually being able to achieve good profitability in the long run as well".
However, the feasibility of the farming method was not the only thing Salmon Evolution wanted to demonstrate. Their other endeavor was to prove that Norway was the right place to start their project. "In the beginning, we had a lot of people questioning why we started in Norway because it didn't make sense", claims Trond Håkon Schaug-Pettersen. It was better to produce abroad and capture a higher margin, they said. "But we've been very firm that in Norway, it's not only the geographics and the water conditions but it's also the whole competence, and the people, and the cluster here, you have access to everything in addition to having very good natural conditions", he says.
That "everything" includes much more than we might at first glance think when we talk about aquaculture and Norway. "Land-based salmon farming at this scale is a merge between traditional farming and advanced processing industry, so, you need the people, you need the biological competence, but you also need mechanics, engineers, technicians, and people with a totally different set of competence", he explains.
"We've been very fortunate in our area because there is a lot of processing industry, either refineries for oil and gas, alumina producers, so sort of high tech processing industry and sort of the skills built up over decades and that industry it's something you need if you're going to do farming on land at this scale", he continues. "So, we are very much focused on top of combining the traditional farming competence and mentality with some of that more like industrialized skill set and thinking".
So, contrary to the general opinion, their strategy was to stay in Norway. "We are going to build the world's best land-based salmon farming facility in Norway at Indre Harøy, that's going to be our global center of expertise", he states. Then, he tells WeAreAquaculture, they will use everything they learn from this operation to replicate it abroad. They will take their people and suppliers overseas to do it there, but they will also bring people to Norway to train them. Their goal is to "basically use this platform in Norway as sort of the foundation for growth".
So, starting in Norway, to expand overseas, that is Salmon Evolution's strategy, although they are taking it to step by step. As Trond Håkon Schaug-Pettersen tells us, this is a very suitable concept for many other geographies, although it is also true that there are certain places in the world where they will not be able to operate because they need enough water and at a certain temperature. There is also another detail, "it will take some years to fully build out that", the company's interim CEO and CFO emphasizes.
"When operating in this industry, you have to have respect for the timelines because there are very long lead times", he says. They are now completing phase 1 in Norway, which is about 25% of the path through. Phase 2 will complete another 25% and, when it is completed too, it will start phase 3, which is the last 50%. In the meantime, they have set up a joint venture in Korea with Dongwon Industries, and earlier this year, they announced their intention to have a presence in North America as well.
Regarding the Korea project, he tells us that it is quite advanced. "We've been working on that for quite some time, so the first step in the international expansion plan is to get that project started and that is approaching that phase", he tells us. And, as far as North America is concerned, they have set up a structure there, assembled a team, and are now actively working on site selection and initial due diligence. They expect to take two to three years there to secure the site and get all the permits, so they will start building in 2025 or 2026.
"That's part of the challenge when going overseas because, in Norway, you have such a big industry already, so you have all the regulatory framework in place. So, if you have a site, then it's a very standardized process of how this would work", he explains. "When you move into other markets where this is a new industry, you have a lot of stakeholders, you have local, state, federal and tribal stakeholders, and you need to address in a good manner", he adds.
The first harvest has been a big milestone for Salmon Evolution, but as Trond Håkon tells us things don't get done in a heartbeat, it takes time. "We have now a very tangible pipeline in Norway, we have the project in Korea, and then it's a natural evolution to move into North America, and by then we will have, I think, a tremendous amount of experience and potentially enabling us to even fast track the building process when we get to that stage", he says.
"When we put into operation a facility like this you don't get the user manual and it's just pushing the start button and getting started", he claims, "there's a lot of tuning, a lot of getting a customized to the facility, how it works, how everything is interconnected. If you change the level of this, then that will have a trickle-down effect". Now is the time to learn and that is what they like most about this first harvest, which, despite being the first batch with all the challenges it entailed, has obtained a result that validates their assumptions and points to the potential of this operation.
And not only in quantity but also in quality. To prove it, they have followed the same model, testing it first at home and then sending it overseas. The first to try their salmon have been the 60 employees of the company, as well as supermarkets and restaurants in their region, then they have exported it to markets in Europe, the United States, and Asia. They are satisfied. "We are very confident in the quality, it tastes very good and on the sort of both the physical conditions of the fish, the fillet quality, the color, everything looks very good", the interim CEO of Salmon Evolution says. "The general feedback is very positive, and people seem to be very happy about the quality", he concludes.
"For everybody involved it's a big moment because, I think I speak for all based in the company, this is something we've worked really hard for, for a long time, and obviously it's a big milestone, but at the same time, it's not like we have completed that or finished. This is just the beginning", he claims. "This is something we will do every week", he adds.And – at least for the time being and even though it was sudden following the resignation for family reasons of his predecessor Håkon André Berg – he will be at the helm, which is something he feels honored about. "It's an honor to take up the position and have such a great team in place", he claims, but clarifies, "our goals and our strategy remain unchanged".