UK land-based salmon project still on the table

Despite facing obstacles in raising finance, company founder is confident things will start moving in 2016.

FishFrom, a UK company which unveiled plans back in 2013 to set up a 3,000-metric-ton land-based salmon farm in Scotland, is still looking for money to get its project off the ground, but its founder is confident things will start moving this year.

The company was initially granted planning permits to build its land-based salmon farm in Tayinloan on the Kintyre Peninsula, in December 2013, and the original plan was to have the first fish harvested in time for Christmas 2015.

However, raising finance for the project has not been as easy as initially hoped.

“It’s been a battle raising the finance for this project,” Andrew Robertson, founder and director of the company, told IntraFish.

“It is a big project at around £22 million (€29.2 million/$31.7 million) which is not easily found at a moment’s notice."

Since the 2008 financial crisis banks are reticent about anything to do with start-up businesses, and investors have also changed their lending mandates, Robertson said.

“All in all it’s all proven to be relatively hard,” he said.

Nevertheless, Robertson said there is “a massive amount of interest” in the project and “numerous conversations going on in various spheres.”

“We are quite hopeful we will get things moving in 2016, which is only because we are far down the line on some of the conversations we’ve had,” he told IntraFish.

Additionally the project received some finance just before Christmas, albeit a relatively small amount in the larger scheme of things.

“Rather than stand still and wait for the world to come to us, we’ve been very busy organizing all sorts of things to get investors on board and just before Christmas we penned a deal with an investor on a much smaller basis – but it remains our priority to get the larger project up and running,” said Robertson.

“I would like to think that at some stage during the course of 2016 we will start ground works on that.”

Once the ground work has started then the company will consider its original plans in terms of size and production volumes.

“Then I think a decision will be made as to whether we commence with the footprint of the project, whether we start slightly smaller or whether we go the full whack.”

Unsurprisingly at this stage, it is difficult for Robertson to say when any fish from his project will hit the market, but he expects the next three months “will be quite interesting for us.”

Difficulties finding investment

The United Kingdom is not particularly graced with a lot of aquaculture investments, and the majority of the investment in the Scottish aquaculture industry comes from foreign companies, noted Robertson.

The company has done a lot of work in London attempting to raise the funds, and while the general consensus is it is a “fantastic project," investors are cautious and eager to see how it takes off first, said Robertson.

“The idea being that once we’ve established one farm and the idea is proven and it works producing fish as efficiently as we think it can, then number two will be a relatively easy sell to banks and investors," he said.

Room for land-based in Scotland?

The Scottish salmon industry has stayed fairly static for the past 10 to 15 years, and while last year there was a reasonable improvement in volumes, there was still a lot of undersized fish and biological issues, said Robertson.

“A lot of people will look at our project and say there are a lot of capital costs to start this project up but, while that is true, you do control the process significantly better and don’t have the same issues such as sea lice issues and AGD," he said.

“The way we see it, once you’re established your cost of production eminently more manageable. So we are still pursuing this as our main project.”

FishFrom originally said it planned to ship out 800,000 salmon a year from the site, supplying retailers such as Marks & Spencer, Waitrose and Young's Seafood.

It also said it had plans for another onshore farm on the Scottish mainland and hopes to roll out the ­model worldwide in a bid to meet the growing demand for farm-raised fish.

“You have to look at what our relatively bold statements were first time out and we have to rein those in and reduce our expectations on how we are going to achieve what we want to achieve,” Robertson told IntraFish.

“We’ve not lost sight of what our end ambitions are, though, and we now have more stings to our bow on how we will manage it all.”

He is confident there is a great opportunity for the closed-containment rearing of salmon in Scotland, and believes the project will ultimately be a success.

“As time goes by biological issues are definitely having a major trauma on the existing industry," he said. "I think people will start to relax a lot more if they found an easier way of growing fish that does not involve putting them in the sea.”

The main problem with the company’s ambitions is investors will look to other examples of land-based salmon projects and analyze the trials and tribulations these have faced -- Langsand Laks being a prime example.

“The point being is that if anybody embarking on that type of project, does not succeed, it becomes a very difficult hurdle to convince other people you’ve got answers and methodologies that make your position different,” said Robertson. “But that’s the nature of all things new I guess.”