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Aker BioMarine sees opening for krill in Chinese aquaculture market

Potential for krill supplier could 'double' if and when political relations between Norway and China normalize.

The normalization of political relations between China and Norway will be a game-changer for vertically integrated krill supplier Aker BioMarine, CEO Matts Johansen told IntraFish.

In December, Oslo and Beijing agreed to normalize diplomatic and political ties, which were frozen since 2010 when Chinese dissident Liu Xiaobo was awarded the Nobel Peace Prize.

Aker BioMarine currently sells around 26,000 metric tons of krill meal to the aquaculture industry, and Johansen hopes "the potential will double for us" with the opening of the Chinese market.

China is by far the biggest and most important aquaculture production nation and the biggest market for marine ingredients globally.

Around 60 percent of the world's aquaculture output is produced in China, Johansen said, making it a "really interesting market" for fish feed producers and meal providers such as Aker BioMarine.

"China is going to be exciting and we're going to go after that [market] systematically," he said.

Aker BioMarine has been preparing for it and has several approvals pending "to start shipping into China."

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The company -- owned by Norwegian magnate Kjell Inge Rokke through his main shareholding in Aker -- operates two fishing vessels, the Antarctic Sea and the Sea Saga, which are fishing in the Antarctica.

In addition, it owns a transport vessel, La Manche, which delivers the catch to its logistic hub in Montevideo, Uruguay.

Within the aquaculture segment, it relies equally on the shrimp and salmon farming sectors, through partnerships such as aquaculture feed giant BioMar Group, Johansen said.

More than 50 percent of BioMar's feed now contains krill meal, which Aker BioMarine markets as Qrill.

Growth is on the cards

In 2015, Aker BioMarine revenues were $105.1 million (€99.2 million), with earnings before interest, taxes, depreciation and amortization (EBITDA) of $25.7 million (€24.3 million) and net profits of $805,000 (€760,000), the first profit reported by the company.

Johansen said the company grew both the bottom and top line last year, with sales exceeding NOK 1 billion for the first time in its history. Aker BioMarine's full financial results for the year will be released in March.

"And we're growing," he told IntraFish.

This future growth will come from both the aquaculture segment as well as the omega-3 market with its Superba brand, which according to Johansen is "much more marketing-driven" whereas the fish farming segment is "very nutrition- and performance-focused."

To combine the best of the two, Aker BioMarine recently launched a pet segment -- Qrill Pet -- as a third commercial leg.

"We have high expectations for it in the future," Johansen said.

For the remainder of the New Year, the company will focus on four core areas, including cost leadership, innovation to build up future markets, to work in strong partnerships with customers for tailored marketing, as well as educating its employees to become "people who are the best in the industry."

"We have a very exciting future ahead," Johansen said -- despite the ongoing patent infringement lawsuits it filed against its competitors in the United States over its omega-3 products, which according to him are "still ongoing."


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