New Zealand King Salmon cuts staff as climate change and soaring costs cripple company

The company is still waiting for approval of its offshore farming application, which it says will provide more sustainable production.

New Zealand King Fish CEO Grant Rosewarne is experiencing first-hand the damaging effects of climate change on his company's business.
New Zealand King Fish CEO Grant Rosewarne is experiencing first-hand the damaging effects of climate change on his company's business.Photo: Anders Furuset

New Zealand King Salmon is cutting 139 jobs in an effort to recover costs associated with the pandemic and the impact of rising sea temperatures.

Jobs will be reduced in various parts of the company, with factory roles particularly affected.

There will be an emphasis on "natural attrition," Paul McIntyre the company's sustainability and stakeholder manager, told IntraFish.

The company first mentioned downsizing last month following "deeply disappointing" results caused by crushing costs and high mortalities at some of its farm sites, but did not give numbers.

It also said it would be fallowing three of its farms in the Pelorus Sound to combat the continuing effects of climate change.

“Unusually early elevated seawater temperatures were a major factor behind high mortality rates, with the marine heat wave during summer associated with a La Nina event," said CEO Grant Rosewarne.

The die-off that hit the company in January increased costs by almost 30 percent to NZD 20.8 million (€13 million/$14.1 million) in the year.
New Zealand King Salmon's share price has fallen 75.6 percent in the last year to just NZD 0.20 (€0.12/$0.13), marking almost the biggest fall among the seafood companies highlighted in IntraFish's recent CEO salary ranking.
Only land-based producer Atlantic Sapphire saw a bigger one, after a year of mass mortalities, its Danish facilities burning down in a fire and a reshuffling of its senior executives.

Changing tack

New Zealand King Salmon has traditionally farmed salmon all year round in the Pelorus and Queen Charlotte Sounds, as well as Tory Channel, in the Marlborough Sounds.

The bulk of mortalities have occurred when it has farmed through the summer in the Pelorus or Queen Charlotte Sounds.

The fallowing of the three Pelorus Sounds sites will result in reduced harvest volumes but lower mortality costs, thereby giving the company a more stable, predictable operation, said Rosewarne.

These measures will result in a forecast decline in production in 2023 and 2024 to 5,700 and 6,500 metric tons, respectively, with a 200-metric-ton predicted increase in 2025.

"This reduction in output will be partially offset by a rigorous review of overheads and a downsizing of the company," said Rosewarne last month.

An agonizing wait for offshore licences

CEO Grant Rosewarne told New Zealand newspaper Stuff that the situation of job losses is largely a result of a lack of new water space for salmon farming.

The hearing for New Zealand King Salmon's open ocean Blue Endeavour application, seven kilometers north of Cape Lambert in the Cook Strait, is due to be completed at the end of April and the company is hopeful for a decision mid-year.

This project is expected to have multiple benefits, including an increase in the scale of operations, reduction in operating costs and improvements in fish health.

If Blue Endeavour is approved, the three fallowed farms in the Pelorus Sound will be used as nursery sites for nine months of the year, avoiding the summer months. Fish from these nursery sites will be transferred to Blue Endeavour at around 1.5 kilos for full growout to around 4.2 kilograms.

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Published 27 May 2022, 05:31Updated 27 May 2022, 13:12
New Zealand King SalmonNew ZealandClimate changeFarmed salmon