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Will diversification bring new investors to the seafood sector?

Leroy, Austevoll and Cooke may be models of the future.

Vertical integration of companies, combined with diversification of species and geographies is the future of the seafood sector, according to finance experts at the IntraFish Investor Forum.

If you look at companies such as Leroy, Austevoll and Cooke, all of whom are involved with a number of species – both wild and farmed -- and in varied geographies, “this is the future," said Per Even Hauge, director at DNB markets.

The customers, namely retailers, are looking for a diverse portfolio, so if one company can offer different species this is the key, said Hauge.

As a result, Hauge expects to see more consolidation within the salmon farming segment. "It is strange to me only two salmon companies listed on the Oslo Stock Exchange are geographically diversified, and also strange there are not others who have diversified species.

Thor Arne Talseth, portfolio manager at Amerra Capital Management, however, believes companies need to focus operationally, and questions whether one can be the best in everything from farming salmon, or bass, or catching cod.

“I think it’s possible, but it’s a fairly complex proposition,” he said. “On top of that there would need to be a sales or marketing department on top of it to get all the synergies -- very few have been successful.”

Nevertheless, Talseth believes ultimately this will happen.

“If we have this discussion 10 years from now, there will be a number of companies who are multi-species, multi product.”

Helge Moen, CEO Kverva, though thinks companies should stick to what they’re good at.

Salmon producers should focus on production and another on distribution and another on the consumer," Moen said.

“It is a different strategy – whether it’s better or works, we’ll see, but I believe in focused operations and how you organize that.”


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