The third wave

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Norcod’s CEO believes that the secret to successful cod farming has finally been cracked.

In the race to restart Norway’s cod farming industry, Norcod is in pole position. Following a trial harvest in December last year, the company is now gearing up for its first commercial harvest this quarter.

Chief Executive Christian Riber is confident. He says: “Our current production is on target and the fish is doing well. We still see very low mortality, good growth and good fish welfare. And just this week [speaking in June] we’ve started setting out the next round of fish into the ocean, which will become the next 10,000 tonnes for 2022.”

He describes the December trial as “a huge milestone” for the company, with the first 2kg-plus fish and expectations that the coming harvest will exceed the planned average of 4kg-4.5kg.

Even so, he says: “When we started back in 2018, a lot of people thought we were nuts!”

Cod aquaculture began with experimental hatcheries to revive wild stocks in the 1880s, but the first wave of full scale commercial farming started a century later. It was not a roaring success – biological problems were challenging and profits low – and most closed during the 1980s.

The second wave came in the early 2000s, with farms established in Norway and elsewhere, but again biological problems – and the global financial crisis – meant the industry was once more on the back burner.

Riber believes that solutions have now been found for both the biological and financial challenges: “Now everyone is talking about cod farming in Norway and there are new companies coming into the market, which is very positive.”

So what’s different about the model now? One factor, says Riber, is the biology. As he puts it: “Back in 2012-13, they reached generation three, and they felt they had cracked the biology at that time, but then they got killed by the financial crisis.

“Today we are setting out with generation six – it’s a totally domesticated fish, it swims around in the pens similar to the salmon. As long as the cod is fed correctly and is kept with the right equipment, we see zero problems with cannibalism or escapes.”

He adds: “We’ve done it the hard way from the beginning, so we’ve invested in completely new equipment, new rings, new feed barges and new service boats, which gives us a lot of advantages.

“And we’ve chosen a strategy where we use feed with a very high marine content. We’ve seen very good results with that, in the Faroes, for salmon.

“So our fish has fantastic growth and they are really strong, and fish welfare is really good. We see very low mortality.”

Feeding and breeding

To develop the feed, Norcod worked with Danish-based aquafeed producer Aller Aqua, a company with a lot of experience working with halibut farmers in Norway and also with sea bass and sea bream.

Norwegian research institute Nofima has been running a national breeding programme for cod since 2003, and their stock was the basis for Norcod’s initial broodstock. For its commercial production going forward, however, Norcod is working with Norwegian company Havlandet Marin Yngel for its genetics and breeding. Havlandet is the only commercial, privately owned breeder for cod, and Norcod is planning to construct a dedicated fry facility in Florø, in partnership with Havlandet.

Christian Riber, CEO Norcod

Another key factor is the market. Riber notes that in the late 2000s cod was selling for 10 or 15 NOK per kilo, but now prices are up to as much as 50 NOK.

In fact, for Q1 of this year Norcod announced an income of NOK 11.8m (£1m) compared to NOK 6.3m (£546k) for the same period last year. The pre-tax operating profit was NOK 1.5m (£130k) against a loss of NOK 16.7m (£1.4m) in Q1 2019.

Danish wealth management business Artha recently bought out the stake owned by seafood producer Isfjord Norway. Artha was already a major investor but the move, which took its stake to just under 33%, underlines its confidence in the venture.

Riber says: “Now more than ever, consumers are very focused on how is the fish raised, how sustainable is it, what is the environmental impact?

“Our cod is checking all those boxes. We are very much focused on sustainability in our production.”

In May, Norcod became the first cod farmer to achieve the Global GAP Aquaculture standard. This covers the entire production chain from broodstock, seedlings and feed suppliers to farming, harvesting and processing, setting out detailed requirements for legal compliance, employees’ occupational health and safety, animal welfare, food safety and environmental and ecological care.

Now, the company is working towards certification with the Aquaculture Stewardship Council. This will not be granted until Norcod has been through at least one full production cycle, and Riber hopes to achieve certification some time in 2022.

Taste the difference

Wild caught cod is a familiar product, but how is the farmed version different? Riber says: “It’s the same species, but due to the feed it has a significantly sweeter taste to it and it is very firm. It has less of the salt water, ocean taste and it is less watery.

“What’s interesting about the farmed cod is that we can get a much better average size so, while wild caught fish can be anywhere between half a kilo and 7kg, we have a much narrower size range. And it has a much more stable quality. We don’t use nets or hooks to catch the fish, so there is very little bruising or damage to the fish.”

As the farmed cod do not go all the way down to the sea bed they are also very unlikely to pick up nematode worms, which can be a problem for wild caught cod. The worms are harmless to humans when the fish is cooked, but are very offputting when they turn up alive.

Stability of quality and supply are also advantages Norcod is keen to stress. Riber says: “Our customers are high end food service and retailers – none of them like to buy on spot markets, they like programmes, stability and fixed prices. And that’s exactly what we can deliver to them.

“We can do it outside the usual fresh fish season. So, from May onwards there is very little fresh cod available on the market, especially in high, stable quality, and that’s the demand that we can meet.”

Norcod is working in partnership with Denmark’s Sirena Group, which markets a variety of seafood including wild caught white fish. Riber himself was formerly Commercial Director with Sirena before moving to head Norcod in December 2020.

The connection means that Norcod should be able to get its product to its key markets, both whole fish for processors and retailers in Europe – including Scandinavia, the UK and elsewhere in western Europe – and fillets for retail and hospitality.

As Riber says: “A big thing that we’ve done from the beginning, which differentiates us a little bit from the others, is that we’ve built Norcod based on production and marketing together; we haven’t just focused on production.

“We see our first mover advantage in the market but even more so when it comes to locations and licences, where we have a big advantage.”

Norway’s emerging cod farming industry is not currently governed by the kind of “traffic light” system which governs salmon farming, but it’s not hard to see that if the profitability of the model is proven, the government will start to licence it more stringently.

Currently, Norcod operates at Jamnungen in Frøya municipality and earlier this year it was granted permission for a further site at Meløy, Nordland county. The company’s strategy is to farm cod from the Trøndelag region in Mid-Norway and northwards along the coast.

One difference in the way cod farming licences are awarded is that they are fixed to a particular location rather than transferable. Cod are saltwater fish for the whole of their life cycle, so the issue of farm sites being too close to migratory routes between rivers and the sea is not a problem, but the location still has to have regard for the wellbeing of local wild cod.

Otherwise the requirements for a cod farm are fairly similar to those for salmon – strong, high energy currents are good, as well as stable water temperatures. Cod, perhaps surprisingly, do not need as great a depth of water – 30 metres is usually sufficient. Also, while cod are subject to lice, like most fish, cod lice are nowhere near the problem that salmon lice present. With no freshwater phase in the cod’s life cycle, production is arguably simpler than for salmon farming, Riber argues.

The move to Norcod has involved quite a change for Riber himself, who is Danish but has long experience of working with Norwegian producers during his time with Sirena.

He says: “The plan was I should go back and forth on a weekly basis – of course that hasn’t been possible in the current environment, but things are opening up now.

“There’s been a difference in going from a wild fish mindset to a farming mindset, that’s for sure, and it’s been an extremely interesting process, but I can use all my experience with Sirena. With the high quality of this product, it’s going to be extremely exciting to see how the market reacts to it!”

 

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