Marine Harvest’s hostile takeover offer for Cermaq confirms the company is keen to backward integrate into fish feed through the acquisition of an established player such as EWOS. In fact, I think Marine Harvest is actually less interested in Cermaq’s fish farming assets.
A takeover of EWOS would make good strategic sense. The strategic rationale of backward integration into fish feed is clear, with fish feed accounting for over 50 percent of the production costs of salmon.
I was initially skeptical of Marine Harvest’s plans to build a brand-new NOK 800 million ($137 million/€106 million) fish feed plant in Bjugn, Norway, due to suboptimal economies of scale in the purchasing of raw materials, suboptimal logistics and a 20-year R&D gap with its current suppliers.
