Grieg Seafood BC Ltd farms salmon on the east and west side of Vancouver Island, and along the Sunshine Coast north of Vancouver. The company has 20 seawater licenses and one license for land-based production of smolt. We do not process our own salmon.
All of our sites are located in traditional First Nation territories, and our relationships with the Mowachaht Muchalat and Tlowitsis First Nations are good and very important to us. For more information on our initiatives in local communities and how we work with First Nations, see Local value creation and Farming salmon with respect for the indigenous land and peoples.
Access to high quality smolt is key to ensuring production growth with sustainable biology. We are expanding the capacity of our Gold River smolt facility from 500 to 900 tonnes. When the expansion takes full effect in 2020, we will be self-sufficient in terms of smolt deliveries.
Harmful Algal Bloom (HAB) is a main biological risk in this region. We continuously monitor and analyze algae movements and oxygen levels and have implemented aeration systems to allow feeding in difficult situations. We believe that our improvements to sea production will contribute to improved survival rates during these events, although sudden and massive blooming will still be a risk. For more details on how we intend to improve our growth with big data, please read our story on Improved growth with big data.
The harvest volume was 16 632 tonnes in 2018. After some years of reduced smolt stocking and biological challenges stemming from HAB, the volume is increasing. Revenues amounted to NOK 1 075 million, with an average of NOK 64.7 per kg.
The cost per kg of salmon harvested was on a similar level compared to 2017 and is still high. The cost is impacted by reduced survival rates of 88 % (calculated according to the GSI definition) from previous HAB incidents and corresponding write-downs. Going forward we expect to realize considerably lower production cost due to our measures within monitoring and analyzing sea water conditions.
At year end the biological situation was stable, with the generations affected by HAB harvested. The biomass in sea is lower at year end 2018 than it was at year end 2017, and we expect a lower harvest volume in 2019.
The EBIT per kg before fair value adjustments amounted to NOK 17.5, up from NOK 12.5 in 2017.