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 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.
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.
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
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.
(Copyright)