Nova Sea announced this week that its board of directors has decided to resume construction of the new slaughterhouse in Lovudn, Nordland, Norway, which will create between 10 and 40 new jobs. The project had been put on hold last fall when the Norwegian government proposed a 40% tax rate for its ground rent tax – also known as salmon tax – and is now being restarted at 25%.
The investment, which has an estimated total framework of just over NOK 2 billion (EUR 173.95 million / USD 186.59 million), is the largest ever made in the municipality of Lurøy, to which the island of Lovudn belongs. Construction will start in April 2024 and, if all goes according to plan, the new Nova Sea slaughterhouse will receive its first salmon in 2026.
With the new slaughterhouse, Nova Sea will significantly increase its slaughter capacity. The company estimates that, depending on the level of activity, the new facility will help to create between 10 and 40 new jobs on the small island off the coast of Helgeland in addition to those it already has there today.
"The old slaughterhouse is outdated and cramped. We must have a new slaughterhouse to keep up with developments in the industry," said Tom Eirik Aasjord, CEO of Nova Sea. "With this investment, we will have a state-of-the-art and future-oriented slaughterhouse at Lovund. This provides an even better everyday life both for our fish and for our employees."
The chairwoman and majority owner, Aino Olaisen, emphasized that the desire to create a viable and attractive society for the entire region has been part of the company's mission since its foundation. "The love for the Helgeland coast resulted in the Nova Sea we see today, with a large number of jobs, and significant ripple effects for the entire region. We are now building the company further, because we want to be an important social actor in Nordland in the future as well," she said.
Håkon Lund, mayor of Lurøy, is excited with Nova Sea's announcement. "This is the best thing that could have happened. This investment will help ensure that the company secures current jobs, in addition to establishing new ones," he said. As mentioned, this is the largest single investment ever made in this Norwegian municipality. "Such an investment will also have ripple effects far beyond the municipal boundary, and thus have great regional significance," Lund added.
The investment is not only the largest ever made in the municipality of Lurøy but also Nova Sea's largest investment in its entire history. Although the final decisions on what taxable ground rent income should be are not yet in place, the company has decided to go ahead with the project once the tax rate has been reduced from the proposed 40% to 25% and, in addition, the property tax base has been reduced considerably.
As a consequence of the uncertainty after the government's announcement of the ground rent tax Nova Sea reduced from two to one shift the filleting line at Lovund at the end of 2022, and shortly thereafter created a subsidiary company – Nova Sea Havbruk – to transfer its food fish permits. However, from the outset, the company made it clear that, while it disagreed with the proposed system, it was willing to contribute more taxes to the community. In fact, this is not its first after-salmon tax investment, as in July it already announced a new project through its subsidiary Helgeland Smolt.
"We have now gone through a year of great uncertainty as a result of the ground rent tax," continued Tom Eirik Aasjord. "But we want to develop our local community, provide work for our suppliers, have good quality in the fish we sell, and take good care of our employees. It is far more important to us than the prime rate, and we are incredibly happy to have a board that chooses to invest so aggressively in a time where there is still a lot of uncertainty."
However, Nova Sea's CEO stressed that the investment is much more demanding to make now that the land rent tax has been introduced and called for the collaboration of politicians for the future development of the industry in the area. "The investment is a big financial burden for us, now that the basic rent tax has been introduced," Aasjord said. "We expect the politicians to contribute in the future by putting the conditions right along the coast, through stable and predictable framework conditions for the farming industry. Now we are making a formidable boost to secure both the farming industry and the supplier industry in the region. We expect the politicians to see the benefit in being part of the journey ahead."
The original Nova Sea AS was founded as a multi-species fish processing company in Naustholmen, Lovund, in 1985. Its founder, Steinar Olaisen was also a salmon farming pioneer. In the early 1990s the company started acquiring salmon production licenses through a subsidiary. The acquired companies were merged and since then it has been recognized as a pure fish farming company that, since 1994, has concentrated exclusively on salmon.
