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Revitalising the fish farming sector through science
The case of Norway
byViggo Halseth
Director of Marketing and Product DevelopmentNutreco Aquaculture Research Centre, Norway
felles/arkivet/admin/T-presen/oecd1
BelgiumBelgium
ChileChile
JapanJapan
NorwayNorway
Great-BritainGreat-Britain
SpainSpain
ItalyItaly
FranceFrance
PortugalPortugal
NetherlandsNetherlands
Central EuropeCentral Europe
GermanyGermany
CanadaCanada
United StatesUnited States
AquacultureAquaculture
AgricultureAgriculture
Nutreco - International Spread
felles/arkivet/admin/T-presen/oecd1
Nutreco Aquaculture Research Centre(ISO 9001 certified )
• Established January 1989
• USD 9 million investment
(NOK 72 million)
• 45 man years per annum
• Analytical laboratory
• Research station
• Pilot plant
• Marketing / Communication
Nutreco Aquaculture spends about USD 8.75 million (NOK 70 million) annually on R & D
felles/arkivet/admin/T-presen/oecd1
0
100
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400
500
600
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1.000
1993 1994 1995 1996 1997 1998 1999
Farmed SalmonFarmed SalmonFarmed Salmon(M
T)
• World’s fastest growingfood sector
(Food and AgricultureOrganisation of theUnited Nations, Feb. 2000)
• Fast, emerging industrywith its own unique andunexpected technology
(Peter Drucker, Beyond theInformation Revolution, Oct.1999)
Key commentsKey commentsKey comments
21%Annual growth
1987-2000
Norway Chile UK OthersN.America
Today’s Salmon Supply
felles/arkivet/admin/T-presen/oecd1
kg per capita1999
kg per capita1999
Annualgrowth‘94-’99
Annualgrowth‘94-’99
Japan 72 0.32 10%
USA 7 0.62 22%
Spain 41 0.64 5%Germany 11 0.94 9%
UK 18 1.33 12%
France 25 1.81 5%
743 MT
384 MT
OtherCountries
Total fishconsumption
(kg per capita)
Total fishconsumption
(kg per capita)
1994 1999
Consumption of Atlanticsalmon
Consumption of Atlanticsalmon
Consumption per capita and shopdistribution still low
Consumption Farmed Atlantic Salmon
felles/arkivet/admin/T-presen/oecd1
4 Healthy: High in Omega 3
4 Tasty: Not too ‘fishy’, relatively boneless
4 Convenient: Easy to prepare, often ready prepared
4 Versatile: Smoked, hot / cold, meal centre / ingredient
4 Value: Increasingly competitive
Salmon portions
Salmon Kebabs
In line with long term consumer eating trends:
felles/arkivet/admin/T-presen/oecd1
Catches of wild fish - World Wide
(Source: FAO)
0
10
20
30
40
50
60
70
80
1960 1965 1970 1975 1980 1985 1990 1995 2000
1000
000
tonn
es
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Technical development that have supported the strong growth of salmon farming
Cost of production
Production pr manyearFeed conversion rate
Survival
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Norway -The strongest innovative cluster insalmon farming - Why?
- High labour cost (blue collar)- High education level - also in aquaculture- Role of feed suppliers / universities / research- Open culture - fast mitigration- Good infrastructure (IT/Roads/Airports)- Well balanced steering from authorities on health and environment- New: 0.3% R&D fee on all salmon in addition to 2.5% on Marketing
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Future growth is driven by retail andfocused at fresh and value addedproducts
• Modern retail accounts for over 50% in all main markets
• USA is the new frontier for future growth
• Growth mainly in fillets and value added products
00
1 01 0
2 02 0
3 03 0
4 04 0
5 05 0
6 06 0
7 07 0
8 08 0
9 09 0
Volume
Time
Whole salmon
Fillets & portions
Pre-packed
Ready-meals
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100
200
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600
700
800
1976 1984 1988 1992 1996 2000
1994 1999E
• Norway 360 180
• Chile 65 35
• UK 40 20
• Canada 40 7
• US 22 5
• Faeroe 30 15
• Ireland 15 4
• Other 20 5
• TOTAL 592 271(Source: Kontali Analyse AS)
Number of playersNorway
Number of playersWorld
Norway fast consolidating butstill relatively fragmented
Consolidation salmon industry
felles/arkivet/admin/T-presen/oecd1
Norway, traditionally strong:- Fish Health- New raw materials for fish feed- Cost reduction - still great opportunities in all parts of the value chainNorway, traditionally weak:- New species- Market segmentation and product differentiation of salmon (Further processing)- Environmental impact farming.
Challenges - need for innovation to sustain growth
felles/arkivet/admin/T-presen/oecd1
The innovative climate in Norwegian aquaculture - the good and bad experience
• Salmon farming has had a lot of small, but important, innovation projects that have been fast implemented. The projects have to a large extent been prioritised by the industry, with good ownership and close cooperation with science.• New, marine species have not had much success.
• Low ownership in the industry• Grants spread thin to many universities• Researcher driven
felles/arkivet/admin/T-presen/oecd1
The innovative climate in Norwegian aquaculture - is the industry ready forthe next step?• From farmers and fishermen to industry in 10 years• R&D has to a large extent been problem solving, or “good idea” driven projects of 4-18 months.• Farming and primary processing of salmon is about managing a high number of “low tech” processes.• From experience, only one unique invention of major importance - Astaxanthin from H.I. Roche• With the consolidation of the industry, there is expectations that the industry take a greater responsibility in defining development needs!!
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The innovative climate in Norwegian aquaculture - is Norway the right place?
• Further processing need more focus to maintain the growth in salmon, but should it happen in Norway?
• Closeness to market• Trade barriers• Norwegian raw material culture• Low paid jobs
• Norwegian aquaculture should invest in developing VAP, but not necessarily in Norway or with Norwegian partners.
felles/arkivet/admin/T-presen/oecd1
The innovative climate in Norwegian aquaculture - need creativity and newcompetence.• Productivity gains (5x production, 1,3x no. of jobs) have reduced the chance for a job in aquaculture.
• Problems keeping lower education in Aquaculture going• Challenge to avoid “inbreed” in the industry.• 5 universities have aquaculture science in their program.
• 3 universities should focus on Aquaculture, with complementary focus areas, regularly exchange of people with the industry and educate a relative high number of technical specialists, in addition to general aquaculture education.
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The innovative climate in Norwegian aquaculture - is Norway competitive forhosting research?
• Aquaculture is a global industry, with its global information flow.• Norway is spending less than most developed countries on Research.• Funding and/or tax refund is not favourable in Norway, compared to the major part of Europe.• Norway has lost competitive advantage ashost for aquaculture.