A "weakness" in Atlantic Sapphire's recirculating aquaculture system (RAS) has caused the loss of 500 metric tons of fish at the company's Miami land-based salmon farm.
The incident occurred Tuesday when significant amounts of particles were allowed to flow from the drum filters (particle filtration systems) into the biofilters and trickling filters, said the company in an announcement on the Oslo Stock Exchange on Wednesday.
This resulted in elevated turbidity and possibly a buildup of gasses and caused abnormal fish behavior, it said. Fish gathered at the bottom of the tanks, disrupting the flow of new water, causing increasing mortality.
The 500 metric tons (head-on, gutted) expected to be lost is equivalent to around 5 percent of the company's annualized Phase 1 harvest volumes, with an average weight of approximately 1kilogram.
The announcement sent the company's share price sliding 11 percent to NOK 123 (€12.05/$14.25) at the opening of the trading on Wednesday.
"The incident comes in addition to the temporary challenges due to maturation and contractor workmanship but will not affect the continuity of supply to customers," said Atlantic Sapphire.
Keeping an undisrupted water flow is critical to the operation of a RAS system.
The company had, from a previous incident, already identified an opportunity to ensure this by modifying the center drain design in all of its grow-out tanks. This work had already started prior to this incident, but had not yet been carried out in the affected system.
The company is also the process of splitting its US Phase 1 grow out systems in half in order to reduce the impact of another incident. Currently, four out of six systems have been split, bit once again, work on the affected system had not yet been completed.
Billund Aquaculture is the RAS system supplier to Atlantic Sapphire, but the company had not been informed of the event, COO Bjarne Hald Olsen told IntraFish.
“We have noted the information given to the market and note that Atlantic Sapphire has a preliminary analysis of the cause of the incident, which we cannot comment on, as we have not been involved nor informed of or notified of Atlantic Sapphires' preliminary root cause," the company said in a statement sent to IntraFish.
"We have offered our assistance to a detailed investigation, based on detailed operational data in order to fully understand the correlation between how the system was operated against the design criteria of the system.”
Atlantic Sapphire announced in January it would increase production during the second phase of its Miami facility, a move that would have a significant impact on the company's potential revenue.
Under the new plan, the company's Phase 2 expansion will produce an additional 5,500 metric tons of HOG fish -- around 57 percent more than the initial Phase 2 plan.
Upon completion of Phase 2, scheduled for 2022, annual production of fish from the Miami facility will be 25,000 metric tons of HOG, or around 30,000 metric tons round weight.
The company reported revenue per kilo of $9.40 (€7.60) per kilo on fish from its Miami facility, a return the company expects to improve on as the share of superior product in its harvests increases. The company managed to achieve $12 (€9.75) per kilo for its highest quality fish -- as much as 145 percent higher than the reference price.
Atlantic Sapphire harvested its first volumes of salmon from its Miami facility in the final three months of 2020, bringing annual production to 166 metric tons of salmon. The company is targeting around 9,500 metric tons of production in 2021, with "steady state" production beginning in the second quarter.
Atlantic Sapphire is targeting an annual harvest volume of 220,000 metric tons in 2031, an amount that would make it one of the world's largest salmon farming companies.
However, reaching that volume will be a challenge, market watchers say, particularly given the relatively unproven land-based grow-out technology.
In July 2020, the company's Miami facility was forced to make an emergency early harvest of 200,000 fish at one of its land-based salmon grow-out systems.
Atlantic Sapphire subsidiary Atlantic Sapphire Denmark experienced a mass die-off in March 2020, losing around 227,000 fish and pushing the company's next harvest revenue back by about four months. A similar mass die-off occurred at the plant in 2017.
