With their EBITDA (earnings before interest, taxes, depreciation and amortization) at about DKK 1 million (USD 156,000), self-styled Danish Salmon believe they have the first commercially viable salmon-rearing operation in Scandinavia.
“To date we’re at a positive EBITDA. The year’s about to end, and we expect to be on the positive side,” Danish Salmon director, Kim Hieronymus Nielsen, told SalmonBusiness.
While tried in B.C. and elsewhere, the riddle of how to make land-based salmon profitable has eluded just about all who have tried. Electricity costs, building costs and land rights are among the prohibitive costs involved.
“We’re obviously optimistic,” he said, adding, “We believe land-based aquaculture provides meaning. We have struggled hard to succeed. We have bettered ourselves and expect to do that in the future as well,” Nielsen said.
Survival hasn’t been easy. After start-up in the two years ending in 2014, 2015 brought immense difficulty recirculating clean water and preventing slime build-up outside the system. The smell brought threats of lawsuits from tourist-conscious neighbors.
“We have turned it around and have good, stable water quality internally, and the odour problem outside is history. We went through a trial-and-error process with many improvement measures, both investment and management-wise,” he said.
To cap it all, 2015 brought a DKK 33-million loss for the land-based salmon facility.
After filtration controls were put in place, the processing of a first harvest in 2015 started a period of increasing smaller losses, and 2017’s loss is expected to be marginal. Production is set to ramp up at the 6,000-square-meter Hirtshals site overlooking the Skagerrak Strait.
“Now we know the facility well, not least how the fish ought to be treated in the system. We can see potential problems before they begin, and that’s the advantage. In 2017 we expect a negative EBIT, but not in the same class,” Nielsen said.