"Nordic Aqua is in the forefront of the development of land-based salmon farming, and learning and minor surprises is a part of such development," CEO, Ragnar Joensen emphasized commenting on the problem.
Photo: Nordic Aqua Partners.
Just 15 days ago, Nordic Aqua Partners (NOAP) published an operational update announcing its promising Q2 results. Now, the first commercial-scale RAS Atlantic salmon producer in China has been forced to downgrade its 2024 expectations after an off-flavor problem affected part of its Q3 harvest. As a result, approximately 190 metric tons (HOG) of salmon will not be sold for human consumption, which will negatively impact Q3 revenues.
The land-based salmon farming company, which already had to slightly delay its first harvest from March to April to implement some adjustments to the water circulation systems, is calm about the unexpected incident, which it considers part of the normal development of a state-of-the-art facility such as the one the Norwegian-owned company has in Gaotang, Ningbo, China.
"Nordic Aqua is in the forefront of the development of land-based salmon farming, and learning and minor surprises is a part of such development," emphasized CEO, Ragnar Joensen. "Nordic Aqua has given focus on recruiting the best of competence and experience and have chosen to go for the highest quality partnership suppliers, such as AKVA Group and Skretting. This has again proven to be a critical part of our strategies, as issues like this are dealt with, in an efficient manner, based on deep and broad insight," he added.
According to the operational update in which Nordic Aqua has reported the problem, the company detected high concentrations of the off-flavor compound geosmin in approximately 190 metric tons (HOG) of ready-to-harvest salmon and identified that it was due to overloading of the purge unit.
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.
"Our Atlantic salmon has since its launch in April received very good feedback in the market. However, following recent quality checks, elevated levels of geosmin were identified in specific production sections. As a result, the affected salmon, 190 MT HOG, will not be sold for human consumption but thus at a substantially lower price," explained the managing director of Nordic Aqua Ningbo, Andreas Thorud.
"Nordic Aqua does not compromise on quality and we relentlessly seek premium products at our facility. Hence, the decision to harvest is in line with our commitment to maintain the highest standards of quality and safety for our consumers while ensuring that the affected product is utilized responsibly," he continued.
Now, having identified the root causes of the problem, the Nordic Aqua team is implementing both immediate and long-term solutions to prevent future incidents, including improving its filtration and water management processes.
The immediate solution has been to harvest those 190 metric tons (HOG). After that, the purge department - consisting of 8 tanks - will be emptied, disinfected, and refilled with pure and clean water, and new salmon will eventually be transferred to purge. In addition, since one of the elements of the incident was the overloading of the purge capacity due to the excellent growth of the fish, the purge department will be restarted in a controlled manner.
The latter will further impact the harvest volume for the entire second half of 2024 as a slower-than-planned harvest will possibly influence Q4 too. Add to that the reduced harvest and the alternative use of those 190 tons of salmon from Q3, which will negatively impact revenues. Nordic Aqua has announced an update on the estimated 2024 volume by August when it presents Q2 results.
Meanwhile, the company continues its efforts to build distribution and exposure in the Chinese market for its 'Nordic PureAtlantic' brand. In particular, NOAP is focused on establishing and developing long-lasting customer relationships in important premium segments to optimize the value attainment of its premium product, for which it recently hired two new sales executives.
