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Akva Group CEO: Land-based aquaculture tech sales 'exploding'

Exec is confident the trend toward more land-based technology will continue and intensify.

Akva Group reported NOK 96.3 million (€10.4 million/$11.8 million) from land-based technology sales in the second quarter -- an indication that the trend toward on-land aquaculture is growing.

Land-based technology sales made up 23 percent of the group’s total turnover in the second quarter -- a rise of increase of 74 percent from last year.

"Land-based has come to stay, and will continue to account for a significant portion of Akva activities," said CEO Trond Williksen during the company’s quarterly presentation on Wednesday.

"A paradigm shift is occurring in the industry, where more of the production cycle is moved from the sea to land."

The increase from the second quarter of 2015 was “an explosion," but noted this was in part due to Akva's acquisition of Danish firm Aquatech Solutions.

Over half the order book

Akva Group’s order book at the end of the quarter showed a record-high NOK 822 million (€88.8 million/$100.5 million), with 53 percent of this connected to land-based technology.

"Land-based is hauling in the orders... it’s becoming increasingly important for Akva Group, and we are convinced it will only intensify in the time ahead," said Williksen.

More contracts are on the way in, he added.

"The projects have a long lead-in period," he noted. "The companies don’t sign contracts until all licenses and permits are in motion. Practically all [of the major salmon producers] have these types of projects in the works."

Mostly salmon

The bulk of AKVA Group’s land-based revenue originates from smolt production facilities, mostly in Northern Europe (Norway, the Faroe Islands and Iceland), but also in other salmon production countries.

Additional revenue is earned from land-based production facilities for other species in other countries.

Williksen also said the market for smolt production facilities has become more professional.

“Previously it was a little bit like Lego blocks," he said. "Companies pluck different components from different suppliers. Now everything has become much bigger, and more complex, and the trend is veering increasingly towards one single supplier servicing one single production facility."

Interest in other species has grown substantially, but the company is proceeding cautiously with how they pursue them.

“We’ve been inundated with enquiries," Williksen said. "To put it diplomatically, they are projects of varying quality. We can’t run after all of them, but have taken some on board. With limited resources we have to prioritize where we are spending and time and energy."

Management will prioritize known areas with low risk – preferably salmon, he said.

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