BioMar faces growing competition: ‘May be shaky for 12-18 months, but we are optimistic’

Ole Alexander Saue

While BioMar recently expanded its production capacity by 70 percent, to 340,000 tonnes, Marine Harvest has strengthened its feed ambitions with a new plant in Scotland.

This Wednesday, BioMar invited industry leaders, employees, politicians, and media, to the official opening of the new production line at the factory. Both CEO, Carlos Diaz, director in Norway, Jan Sverre Rosstad, and the State Secretary for the Minister of Fisheries, Roy Angelvik, was present.

Marine Harvest is currently extending its feed production with a new plant in Kyleakin, Scotland. It is nearly three years since they opened the factory in Bjugn in Norway, which last year produced over 300,000 tonnes.

“I do not like it”
“Of course, it will affect the Scottish market,” CEO Diaz responds when SalmonBusiness asked how they will deal with the new competition.

“It’s not only a matter of building a new factory, one must also develop a new product. They’ve probably built it because they think it is a good idea. When salmon production grows as it is doing, feed producers must expand. Of course, I do not like having a competitor, but it is a fact and we will handle it as we handled it when they built a factory in Norway. Marine Harvest was a very important customer for us before, but we have managed without them,” Diaz continues.

NEW PRODUCTION LINE: Here is the brand new production line at the factory in Karmoy. PHOTO: Ole Alexander Saue.

On the rise
Overproduction in the Norwegian feed market has been mentioned in different situations. Diaz agrees, but insists BioMar’s expansion is a necessity, which will now be right up there with the biggest in the market.

“For a long time we’ve been the smallest of the three largest producers (Skretting, Cargill, BioMar) and now it was about time for BioMar to come up to the same level. Now we compete on equal terms,” he claims.

CEO Carlos Diaz in BioMar. PHOTO: Ole Alexander Saue.

“Need for capacity”
The director of the department in Norway, Jan Sverre Rosstad, acknowledges competition is healthy, and also says the capacity they have built is already sold out.

“Is there any overcapacity here?”

“There is a need for the capacity we’ve built, but other companies have to decide their own production,” says Rosstad.

“What do you think about having new competition in Scotland?”

“Competition is always healthy. We do our best to develop all the time, so that we are ready for all kinds of competition. This plant is an example of that.”

DIRECTOR IN NORWAY: Jan Sverre Rosstad. PHOTO: Ole Alexander Saue.

“Marine Harvest will take market shares”
The Kyleakin plant can produce 170,000 tonnes annually, and also marks an ambitious presence in the growing Scottish market. Diaz is nevertheless confident that there is a place for them in the Scottish market.

“Scotland is not lost to us. We do not sell a lot of feed to Marine Harvest. We have a good position in the Scottish market”, he says.

“Still, it will surely affect the market, and they will take market shares. It may be shaky for one and a half years, but we are optimistic,” Diaz adds.

“They are not only building for Scotland, I suppose they are also building for Norway, Faroe Islands, and so on. And if not, they will definitely do it in the future,” he quits.