Oslo Business Memo
Close

Frontpage

Preparing for the revolution

Geir Spiten, CEO in Akvatech. - The real job is to solve problems, not to sell a particular solution, he says. Photo: Gorm K. Gaare

Geir Spiten, CEO in Akvatech. - The real job is to solve problems, not to sell a particular solution, he says. Photo: Gorm K. Gaare

BFM FEATURE: Closed-containment cages at sea could revolutionize global aquaculture. Smart capital is needed to solve the problems.

CLOSED RACE:   After years of skepticism towards other solutions than the traditional net cages, a large number of companies are now developing closed or partially closed solutions.
One of the companies is Aquafarm Equipment, based in Haugesund at the Norwegian West Coast, where the work is well underway with the construction of the prototype of a large closed sea cage. In April 2013, the plant will be launched and towed to Marine Harvest's test license at Skånevik, Hardanger.
CEO Atle Presthaug at Aquafarm Equipment believes that the solution will eliminate the problems with sea lice and escapes of fish.  - We will take in the water at a depth of 30 meters, and release it through hatches at 15 meters. Since lice live no deeper than 15-20 meters, we secure that no lice come into the facility. The system also ensures good flow-through, which is important for the fish to thrive and grow.

 

Illustrations, opposite page: Aquafarm Equipment installs the prototype closed cages in Hardanger, April 2013.

Illustrations, opposite page: Aquafarm Equipment installs the prototype closed cages in Hardanger, April 2013.

ENVIRONMEN-TAL CHALLENGE:   The development work has been underway for three years, where Innovation Norway has contributed with NOK 8.4 million through the Environmental Scheme. Also, Uni Research at University of Bergen is a partner.
Presthaug states that all the sludge is collected at the bottom of the tank and composted on land.
- We are trying to solve the industry's environmental challenges, also handling and utilization of sludge. This is an environmental friendly solution that will fit very well for smolt from 100 gram to one kilogram. We also think that the method is suitable for bigger fish.
The construction of fiberglass armed polyester is 40 meters in diameter and 20 meters deep. The size is in line with the most common traditional open net cages. The plan is to test the system out 2014, but start already this year with commercial sale.
- The price is around NOK 1  million for 1000 cubic meters. It is somewhat more expensive than traditional constructions, but on the other hand you save a lot of money since you don’t have escapes of fish and don’t need to spend money on delousing.
Presthaug is aware that a number of other companies are working on similar solutions.
- But we think we've come far since we very soon have at sea   full scale plant of 21,000 cubic meters.

ZERO LICE:   In May 2012 another Norwegian company, Akvadesign, based at Brønnøysund further north on the Norwegian Coast  stocked 80 000 smolt into two closed sea cages. The result so far is zero sea lice. In two open cages close by, there has been proven much lice.
- It looks very good. We have no sea lice in the closed cages, although we are based in an area with enormous amounts of lice. We believe we now have a product that is ready to be launched commercially, says CEO Anders Næss at Akvadesign, the company behind the solution, while subsidiary Akvafuture is responsible for marketing and sales.
The solution consists of a plastic tarpaulin placed inside an open net cage. The water is taken in from 25 meters deep, and through a system of pumps and inlet the water is put in rotation inside the plant.
Akvadesign is now testing out the system with bigger salmon.
- We think this will work well also for salmon from one to five kilo, but first and foremost the system is best suited for smolt production at sea.
Næss believes that the system eliminates the lice problem, and is also well suited to prevent escapes.
- The plastic tarpaulin lies on the inside of a traditional cage. If there is a failure with the inner system, the fish is caught in the net cage.
Næss believes the price of the 3.000 cubic meter cage is competitive.
- The price is so far slightly above the price for conventional construction, but this is quickly compensated by eliminating the problem with sea lice and escapes.

INTERNATIONAL PROJECTS:   A number of international companies are working with closed or partially closed aquaculture methods at sea. Among these are the Institute of Technology and the company Plastsveis with a plastic tarpaulin called ClosedFishCage. The Company Feed Control has launched the closed cage system Ecomerden while the company Coast Innovation focuses on tanks of steel build on a larger floating frame.
The Company Future Sea Technology has launched Sea System 2, with large plastic bags at sea, while Botngård has developed a plastic tarpaulin outside the top part of the cage to prevent lice.
Also, Canada's Agri Marine is investing big on closed solutions. The company has conducted successful tests at facilities in China and Vancouver, Canada. In November 2012,  the company signed an agreement with the Norwegian private equity group Akvatech to advance the adoption of the company's closed containment fish rearing technology.

 

 

Communications director Are Kvistad, The Norwegian Seafood Federation

Communications director Are Kvistad, The Norwegian Seafood Federation

 
In Denmark and the U.S. the first onshore farmed salmon is now ready for sale, but communications director Are Kvistad at The Norwegian Seafood Federation does not believe such closed onshore facilities will threaten the Norwegian aquaculture industry - an industry that expects to export 1.2 million tons of fish in 2013.
- Deep Norwegian fjords with heavy flow-through along the Norwegian coast are well suited to producing Norwegian salmon in open cages in the future.

ELIMINATES CHALLENGES:   The Norwegian Seafood Federation represents the interests of 500 member companies, which are expected to have a tremendous impact for feeding the world's population with fish in the future. 

Kvistad finds many of the closed or partially closed solutions interesting and thinks some of the new methods can help eliminate some of the challenges the industry has.
- The new technology solutions can eliminate the problem of lice, but we need better documentation that such systems are better to prevent cage-failures leading to escapes. We also need to know more about the growth and welfare of the fish in such closed systems before it becomes commercially on a large scale.
Kvistad believes that closed-containment cages are of particular interest in environmentally vulnerable areas, like in the end of national salmon fjords or in areas with a huge number of sea lice.
- But my guess is that most of the production of farmed salmon for many years will take place in the open sea cages.
He believes that the new technology solutions around the sludge handling are even more interesting.
- There are absolutely interesting ideas about how to handle the sludge, and make a business out of it, for instance to extract the phosphor for reuse.

GOVERNMENT SPONSORED R&D:  To bring forward new innovations like closed cages and technology solutions for sludge handling, a steady stream of risk capital is required. In Norway the public sector plays a significant role both in financing and conducting R&D, for instance through public research institutions and universities.  
According to an article written by Frank Asche, Kristin Helen Roll and Ragnar Tveterås, many innovations within aquaculture are a result of R&D which has been financed by the public sector, and public sector represents over 50 percent of total R&D spending. The fish farming companies have historically played a less important direct role in conducting and financing R&D,  while their role have been more to adopt innovations by the suppliers, like feed companies, equipment suppliers and pharmaceutical companies.
The total R&D spending amounts to around NOK 1.3 billion (2009). Looking at the last 20 years, the R&D spending has doubled while sales has increased six times and production eight times, according to figures by Asche, Roll and Tveterås. As a consequence, the R&D intensity has decreased.
According to Asche, Roll and Tveterås, it is not realistic to expect the R&D intensity to rebound back to 1990-levels, which would have required a total R&D spending of about NOK 2 billion. The question is if it is possible to increase the R&D efficiency? It is probably necessary for the fish farming companies to play a more direct role when it comes to financing and conducting R&D. Bigger companies with sufficient human and financial capital have better conditions to take on a more direct role, according to Asche, Roll and Tveterås.

SMART CAPITAL: When Geir Spiten was searching for capital to the startup company Akvatech, which develops closed containment cages, he chased private investors who could help him solve problems.- I'm dependent on smart capital, to help me to find the best solutions. You just have to realize that you cannot find them alone, says Geir Spiten, CEO in Akvatech. - The real job is to solve problems, not to sell a particular solution, he says.
According to Spiten, Akvatech recently raised NOK 15 million from private investors. The company has a partnership with Canadian AgriMarine, which includes licenses for AgriMarines technology used in closed containment cages. The plan is to have the first cage in water with fish in May, on Smøla, which is an island north of Kristiansund in the north western part of Norway.
The ability to combine capital and expertise was Spiten`s priority rather than seeking out public grant schemes.
- Initially, I have stayed away from public schemes. You have to spend a lot of time to substantiate your idea and do all the reporting stuff.  And it would not get me the help I now get from investors, says Spiten.
Spiten wanted investors who can help him solve the challenges in areas such as engineering, manufacturing and logistics.

Frame 1860

- Among the investors, there are people who knows manufacturing and has set up factories, shipping companies and shipyards which have operations in many countries and people who knows technology, related to the materials we use in cages, like fiber and resin.
- We also got an oil trader who helps me with contacts in connection to sourcing and commodity purchases. Generally, it's about looking at the whole product and the life cycle, says Spiten.
- What about the players in the industry, are they potential investors in a project like this?
- They prefer to be demanding customers, and not owners of technology. I think it's healthy, because it contributes to technology development.

Relaterte saker fra arkivet

A troubled saga about marine researchers, politicians, and the industry

A heated quarrel between marine researchers and the government over the past months raises doubts about what Norwegian politicians really think about the independence of research.

Les mer...

Small countries, but ocean giants

Controlling more than 50 % of the total European maritime zone, the two small nations Portugal and Norway are maritime giants that now want more marine innovation under the umbrella of EUs blue strategy.

Les mer...

Sir Bob with a message to the future

Stavanger 16-18 June 2014: Innovation is at the heart of the AquaVision  conference.

Les mer...

In for the laser lice kill

BFM FEATURE - The “Stingray” innovation can contribute to the sustainable growth of the aquaculture industry.

Les mer...

Grow the fish; slow and with love.

BFM-INTERVIEW:  The aquaculture industry has tremendous potential for playing an active part in the future food supply. The dangers lies in not respecting what consumers and neighbours want, warns Lara Barazi-Yeroulanos, CEO of Kefalonia Fisheries.

Les mer...

Shaping the world's marine capital.

Key marine players in Bergen are rallying to establish the Norwegian west-coast capital as the World Marine Capital.

Les mer...

A blue revolution in the making

A pilot plant for industrial production of microalgae will give strengthened and focused research on microalgae as marine resource for the future, and will help developing a knowledge platform on upscale systems to support  bioindustries.

Les mer...