Marine Harvest fish feed plant in Scotland gets green light

Highland Councilors granted the salmon producer the planning permission yesterday (21 February).

The plant will be located in Skye. It will supply Scottish fish farms as well as those in Norway, Ireland and the Faroe Islands.

Work on the factory, which Marine Harvest first announced in April 2016, is set to start next month.

The Norway headquartered company said the build, costing some €110m ($115m), will be completed during 2018, and that it expects the investment to yield good results - a capital return target in the range of 15%.

The factory will have total capacity of around 170,000 tons, with the potential for further expansion, while the feed range at the Skye plant will include starter feed for freshwater and organic feed for its Irish operations. In terms of likely feed formulation innovation, Steve Bracken, business support manager, Marine Harvest Scotland, said: "Marine Harvest is already using alternative proteins and oils and continues to research and develop this aspect of its operations. This will continue."​

Ecological objectives have been integrated into the project: "The plant will use liquid natural gas which is a much more sustainable energy source than current arrangements. Most of the raw materials and the pelleted feed will be transported into and out of the site by sea, thereby substantially reducing the number of vehicle movements over current arrangements," ​Bracken told us.

The salmon company also said it is weighing up the sustainability and operational benefits of constructing a fishmeal factory in Scotland, one that would utilize all edible by-products from salmon processing, but it is not evident yet where such a plant would be built: "We are at an early stage in examining the business case for the fishmeal plant and consideration of potential locations will form part of that process," ​added Bracken.

Integration strategy 

The salmon producer first entered the feed production business in July 2014, with the opening of a 200,000 metric tons (MT) facility in Bjugn, Norway as a way to get “control over the whole value chain.”​

Last year the company noted: “T​he factory at Bjugn has over the past 18 months proven to be a success. Operational excellence and effective transportation and logistics have been key contributors to the good results. Today the factory covers approximately 80% of our Norwegian feed requirements.​

“We see, however, that third party European feed purchases remain significant, within Scotland, Ireland and the Faroe Islands as salmon farming centers where we today are 100% supplied by external feed companies. ​

“A second feed factory is therefore in line with the strategy of being a fully integrated protein company.” ​

It also flagged then that that all existing external feed supply contracts in Scotland, Ireland and the Faroe Island would expire during the first half of 2018.

Some industry analysts​ ​questioned that strategy, saying establishment of a feed plant outside of Norway might not be financially sound, considering the smaller production scales involved.