CEO letter

Building a platform for sustainable growth

I am pleased to report that 2018 was another good year for Grieg Seafood. Throughout the year, we significantly advanced our business, delivered solid financial results, and took important steps to position the Company for continued sustainable growth. Harvest volumes increased by 20 percent and reached 75 000 tonnes for the year. Finnmark, Rogaland and British Columbia reached their 2018 targets on volume, cost and smolt transfers to sea. Shetland ended slightly behind target. All in all, we are in a strong position to reach our 2020 targets of 100 000 tonnes with a cost at or below industry level.

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“We are only at the very beginning of our journey to digitalize salmon farming and to utilize the power of big data and artificial intelligence.”

ANDREAS KVAME
CEO
Grieg Seafood

POST-SMOLT ON TRACK

Throughout 2018, we have focused on four key strategic priorities; post-smolt, digitalization, biological control and fish welfare, as well as expansion opportunities. In 2018, we made progress in the development of our post-smolt capabilities, upgrading our smolt facilities to produce bigger smolt in Rogaland, Finnmark and British Columbia. Construction finished at our first post-smolt only facility in Rogaland, which targets production of smolts weighing up to one kilo, with an average weight of 500 grams. That will improve robustness before the fish is released into the sea, and it limits each salmon’s exposure to sea lice and other possible diseases in the open pens. So far, the results from post-smolt in sea are promising.

 

FIRST RESULTS FROM DIGITALIZATION

We have started to reap the first results from our investments into digitalization. In British Columbia, feeding days increased due to mitigating actions against toxic algae blooms and low oxygen levels, enabled by sensor technology and surveillance. On our farms in Esperanza, where toxic algae blooms can be a challenge, growth rate improved with 7 percent in 2018.

Opening our first pilot for an operational center in Rogaland was another milestone. We are now running sensor pilots in every region to collect standardized data from our farms, which will enable us to compare an increasing number of production- and environmental parameters between sites daily, driving learning and production
control.

We are only at the very beginning of our journey to digitalize salmon farming and to utilize the power of big data and artificial intelligence. We believe digitalization has the potential to transform the industry. New data-driven knowledge about connections between the fish and the environment in the sea will allow us to increasingly farm salmon on nature’s premises. I am proud that Grieg Seafood is driving digital aquaculture.

 

IMPROVED BIOLOGY

Biological control is key to increased harvest volumes, lower cost, lower environmental impact and better fish welfare. Although there are regional differences, biological control is steadily improving, and preventative efforts against diseases, sea lice and toxic algae blooms are starting to show results. However, there is still a long way to go before we have solved these challenges permanently. In Shetland, biological control remains a challenge and we are not satisfied with the situation. We have therefore initiated several targeted measures to improve performance in this region.

 

MORE SITES WITH SOCIAL LICENSE TO OPERATE

We received two new sites in Finnmark in 2018. To be able to expand with more sites, we need to strengthen our social license to operate. In the aquaculture industry, we operate in the commons, and the fjords where we farm belong to all. To obtain formal permission from authorities and follow regulations is not enough. We also need to earn our communities’ trust. We achieve that by behaving ethically and responsibly, by always doing what we can to keep our footprint on the environment low, and by contributing sufficiently to local value creation. To make it easier for our stakeholders to keep us accountable also on such parameters, we are for the first time this year integrating our sustainability report and annual report. Going forward, we will continue our efforts to improve relations and honest dialogue with our local communities.

 

SUSTAINABILITY IS CORE BUSINESS

Sustainability lays the foundation for our business. In our view, there is no contradiction between sustainability and financial performance. For instance, when we achieve low sea lice levels with preventative methods, we avoid sea lice treatments that are stressful for the fish, that can potentially affect the marine eco-system, and that is expensive. It is our utmost belief, that healthy oceans, sustainable food and contributions to local communities are prerequisites for profitability. By driving forward improvements to our farming operations, we aim to create value for all our stakeholders. We take our responsibility in reaching the United Nations Development Goals. In 2018, we were proud to receive the second highest grade by the Carbon Disclosure Project, which scores companies based on their work to cut carbon emissions.

Sustainability parameters such as sea lice levels and reduced survival directly impact cost and volume and are therefore monitored daily throughout the Company. Other KPIs related to sustainability are reviewed monthly. Going forward, we aim to certify all our farms with Aquaculture Stewardship Council (ASC) certifications to ensure external and independent auditing of our operations.

 

AN ENERGIZED ORGANIZATION

Grieg Seafood’s dedicated employees deserve all the credit for our achievements in 2018. After completing our culture project in 2017, the organization is energized with a new drive. We are developing a culture of sharing. People are using Workplace to discuss challenges and learn from best practice across regions.

We will build upon this momentum going forward. It is early days of our growth journey, and we are preparing to go beyond our 2020 goals. We must digitize operations. We must think about which skillsets we need to develop internally and which we need to hire to complement what we have. We need to explore new business models and to pursue further growth opportunities. Constant learning will be the new norm.

I am excited to be a part of this Company and I am looking forward to the next step of our journey. Grieg Seafood has been around for a quarter of a century. That is a respectable age in the salmon farming business. Still, in my mind we are only at the end of the beginning. 70 percent of the globe is covered by water, and yet only two percent of our food comes from the ocean. The road ahead is paved with growth opportunities.

We are on a set direction. We are on a clear mission. We are farming the ocean for a better future.

 
 
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