Aquaculture equipment and technology supplier Akva Group on Tuesday signed a new recirculating aquaculture system (RAS) technology contract with salmon giant Cermaq Norway to build a 12 million post-smolt facility at Soroya in Finnmark, Norway.

The estimated contract value will be a minimum of €60 million ($64.2 million), said Akva. Engineering and design work will start immediately.

"This contract with Cermaq Norway represents for Akva the largest contract in Norway ever, and will support the activity level in our land-based business for the next few years," said Knut Nesse, CEO of Akva.

Scaled down following tax

Mitsubishi-owned salmon farmer Cermaq expects the new smolt facility to be ready in 2026.

The project will secure current jobs and business in Nordland and Finnmark, however will not take future growth into account due to uncertain framework conditions surrounding the new salmon tax, said Cermaq.

After the proposal for a ground rent tax was put forward last September, the planned land-based smolt plant in Hasvik was put on hold due to the ensuing uncertainty.

At the time, Cermaq, like the rest of the industry, said it would freeze investments in Norway as a direct consequence of the proposed new resource tax.

In May, the Norwegian parliament officially adopted an aquaculture tax of 25 percent after eight months of debate, down from the original proposal of a 40 percent tax.

"The uncertainty surrounding the effect of the chosen tax model and tax level will affect the level of investment [in the new smolt plant], particularly related to growth," said Knut Ellekjaer, CEO of Cermaq Norway.

The supply of smolt for existing production is, however, a significant bottleneck for current operations, he said.

"When the plant is completed, we will be able to cover today's need for smolt, but the does not take into account any increase in production."

This is the first smolt plant Cermaq is building in western Finnmark, and it will create 24 new jobs in Hasvik.

"Given our need for smolt, it is crucial to increase our own smolt production, regardless of the tax regime," said Ellekjaer.

" At the same time, we have scaled down the project because the framework conditions going forward are uncertain as we experience it," he said.