A Fistful of Dollars: 8F, Pure Salmon and the big hunt for money

Aslak Berge

Faith Hope and Love. There is no shortage of ambitions and hopes when 8F Asset Managment and Pure Salmon are chasing funding for the aquaculture project of the time.

“Ay, think of it — wish it done — will it to boot — but do it,” wrote the Henrik Ibsen in famed Norwegian play “ Peer Gynt”.

Precisely this quote is at the forefront when asset manager 8F Asset Managment is currently on the roadshow to raise money. The plan is to build a chain of large land-based salmon farms.

Martin Fothergill, founder and partner of 8F, emphasized scale as the magic tool that will be able to produce land-based salmon with profitability – that is, below market price.

And not only that, 8F’s farming company Pure Salmon will produce salmon at costs “significantly lower than in sea production”.

Opinion: Aslak Berge

Fothergill, who came from Deutsche Bank, established 8F along with two others three years ago. The experience base and the knowledge base on industrial salmon farming on land – on a large scale – is thus somewhat thin.

If 8F receives $ 1.6 billion, which they are seeking, they will be able to build a number of plants with a total production capacity of 260,000 tonnes of salmon. That will make Pure Salmon the world’s second largest fish farming company, bypassed only by Mowi.

8F definitely has the burden of proof on its side.

But they also have the financial market on their side. Just look at two other, and not completely different investment cases: Atlantic Sapphire and Andfjord Salmon. Both have raised money for land-based salmon farming in the financial market over the past year. Both got what they asked for. And both have experienced significant price increases in the wake of the share issues.

Demand for these types of projects is high.

A Fistful of Dollars
8F’s business partner at the test facility in Poland, Israeli Aquamaof, who claimed in an interview with SalmonBusiness during this year’s Brussels fair that they will produce salmon for three dollars per kilo.

It is “significantly lower than in sea production”.

With a salmon price of around EUR 6,  this would indicate a juicy EBIT per kilo of EUR 3.3. Given a sale of 260 million kilos of salmon, it could earn almost EUR 866 million – annually.

This calculation means that investors will be repaid their investment in just under two years. So the investment decision should be simple.

The catch is that we are not talking about straightforward production here.

This is the biological production of a company with no real experience. In something that has proven to be extremely demanding. Many and significantly more experienced players have had their fingers burnt.

Therefore, investors who are now investing their money on 8F’s huge project should know that the risk of this ending in tears is sky high.


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