Freshwater fish will become more important in aquaculture
World Fishing & Aquaculture interviews Norwegian modern fish farming pioneer, Bjørn Myrseth to discover what he believes the future holds for the fast growing industry.
Fish that do not require fish protein in their feed will become important in tomorrow’s aquaculture, says Norwegian fish farming pioneer, Bjørn Myrseth. “I will continue to work with marine fish that can be grown in cages, but at the moment I am also interested in taking a look at the herbivore or omnivore fish that are sold at low prices such as tilapia and pangasius.”
This is far removed from the farming of rainbow trout and Atlantic salmon in Norway, which is where Mr Myrseth began his long career in aquaculture. This career has taken him all over the world and has involved the farming of many species.
Mr Myrseth, a fisheries biologist from Bergen University, began working for shipping company Stolt Nielsen in 1971. He was hired to investigate the farming of lobsters. “But I very soon found out that it was not very easy to farm lobster commercially,” he comments.
At this time salmon farming was beginning on a commercial scale in Norway and Stolt-Nielsen started its own operation, Sea Farm AS, to farm salmonid species. It was established in 1972 in Haugesund, south of Bergen, with Mr Myrseth in charge.
The company began by farming rainbow trout, but later moved into salmon. At that time there was a serious shortage of salmon smolt, so Sea Farm built a large hatchery and in 1973 started producing smolt which was sold to fish farmers on the west coast of Norway.
The company sold smolt on contract and organised transport to the farms using well-boats. It guaranteed the quality and survival of the smolt so that farmers only paid for the fish that survived the first 30 days in cages. This service was introduced in 1976 and was a great success.
But not all was plain sailing. “In 1974 we had our first crisis: it became near impossible to sell rainbow trout,” says Mr Myrseth. “Sea Farm AS closed down part of its activities and I took a job as a research assistant at the University of Bergen for two years.”
By 1977 the market had recovered and Mr Myrseth worked full time for Sea Farm again. The headquarters was moved to Bergen and the operation was expanded to meet the growing demand.
In 1980 Jacob Stolt-Nielsen, the owner of Stolt Nielsen, decided to farm sturgeon in California on the west coast of the USA. A ban on selling caviar from wild-caught sturgeon had been introduced and this created new opportunities in sturgeon farming.
However, caviar production was a slow process. It took 12-14 years for the female fish to mature and start producing eggs. But Sea Farm managed to achieve maturity after only eight years in California, so caviar production there became economically viable.
It was not only caviar that was produced. Smoked sturgeon meat and sturgeon fillets were also sold.
Sea Farm began farming turbot in Spain at this time. The Norwegian Institute of Marine Research was carrying out experiments with halibut and turbot in closed bays and Sea Farm was able to use its expertise because of Mr Myrseth’s close connections with the institute.
In 1989-90 there was a crisis in the Norwegian salmon farming industry caused by disease and over production. Regulations were changed so that larger operators could invest in the industry, but there were still restrictions on the size of farm and on the amount of feed that could be purchased.
However, there were opportunities in the salmon farming industry in Scotland so Sea Farm bought into a company there.
Mr Myrseth also researched farming salmon in the USA and Canada for selling in the large US market, and found good locations near Seattle and in New Brunswick. Despite the import levy on whole (dead) salmon from Norway at that time, the USA still allowed imports of live Atlantic salmon, so Sea Farm imported smolt directly from Norway using the know-how it had already acquired.
Sea Farm was launched on the Norwegian stock market in 1985 and Mr Myrseth used the money he obtained for his shares to set up his own company Lax AS.
While Lax AS (the company was soon renamed Marine Farms AS) was originally focused on salmon, Mr Myrseth could not obtain permits to grow the fish in Norway so he started looking at other species in other countries. In 1987 he researched farming seabass and seabream in the Mediterranean and worked with partners in Greece and Spain.
“But my partners knew nothing about fish farming and soon lost interest,” he says. “Developments were too slow for them and they got tired of waiting for the profits. So I bought them out after a few years.
“Investing in aquaculture is a game of patience. It takes time before you get a decent return.”
In 1990 Mr Myrseth bought into Spanish fish farming company, Culmarex, which was producing oysters and yellowtail. The yellowtail production was not a success and the company switched to seabass and seabream and thereafter grew steadily and turned a profit every year from 1992 until 2008.
“It was a good cash cow,” reflects Mr Myrseth and by the time he sold his interests in Marine Farms in 2010, Culmarex was producing about 9000 tonnes of seabass and seabream annually.
Mr Myrseth had also decided to go the partnership route to farm salmon in Chile with a company called Salmones Huillinco.
However, Marine Farms is probably best known for farming salmon in Scotland under its Lakeland subsidiary and annual production was built up to 10-12,000 tonnes. “At Lakeland we concentrated again on producing smolt,” Mr Myrseth says, “but later we expanded activities and started grow-out production also. We made the company into a fully integrated company.”
In 2003 salmon prices were very low and Mr Myrseth did not make any money on his salmon operations. In fact he lost money on the Chilean operation. However, Culmarex was profitable and he realised that it was a good strategy to have several ‘legs’ to stand on. In 2006 he launched Marine Farms AS on the Norwegian stock market.
Opportunities in Asia
“By the end of the 1990s I became aware of the potential for fish farming in Asia,” says Mr Myrseth, “but Marine Farms did not have a lot of cash available so I did a bit of consulting and met some Norwegians operating in Hong Kong. They were farming grouper in China for the Hong Kong market and achieved good prices for live fish.”
This resulted in a joint project for farming the species in China, but it failed, mainly due to corruption on the part of the Chinese partner.
Mr Myrseth then turned his attention to barramundi or Asian seabass (Lates calcarifer). “When I visited Singapore in 1998 I was interested in barramundi. It seemed to be a relatively simple fish to farm so I was interested in looking at the market potential. But prices were too low at that time. (Mr Myrseth has since renewed his interest in the species.)
“A little later I attended a conference in Taiwan where much of the focus was on cobia. This looked like a great fish with a good potential. It was easy to farm, very much like cod. So my interest was awakened.
“We bought a cobia hatchery in Florida and managed to increase fingerling production there. But because of US restrictions we could not farm the fish in the USA, so we had to fly the fingerlings to Belize for grow-out. Belize was probably not an optimal country for this operation, but that is where we ended up.
“We had some problems though. Fingerling production was very costly because of the initial setup of flying them in from Florida, so we built a new hatchery and a grow-out facility in Belize.”
Marine Farms also set up a cobia operation in Vietnam using fingerlings produced by Vietnamese government research institutes.
“Cobia is a beautiful fish with a firm, white flesh,” Mr Myrseth says, “so we had great hopes for it. But we did have some production problems. It seemed to eat a lot, but at a certain size it stopped growing or it grew too slowly. So the feed factor was very high and we had problems making money on it. There seems to be a problem with using dry feed for this fish.
“We need more knowledge about this, but there is hardly any research and development (R&D) focusing on it. The heavy Norwegian investment in R&D on salmon by both the government and the private sector (primarily the feed companies) was one of the main reasons for the success of the salmon farming industry.
“If you want to develop a new commercial species you just have to invest in R&D in all aspects of farming [it].”
Norwegian know-how brings success
Although Marine Farms AS experienced setbacks, for example with feeding cobia, the company has largely been successful in its foreign ventures. “I think the main reason for our success,” says Bjørn Myrseth, “was the fact that we brought with us Norwegian experience, know-how and technology. And we were able to put that to productive use before our competitors.
“We knew how the equipment worked, we knew the necessary procedures, and we were therefore able to utilise it before others had learnt how to. For example, the University of Bergen introduced light manipulation around 1994-95 and because of our tight contacts with the university we were able to put that into practice early.
“We also introduced larger floating cages for improved efficiency. And we were probably the first to use feeding platforms, even before they were commercially available from equipment manufacturers. In Greece, for example, we built our first feeding platform as early as 1993.”
In 2012 Bjørn Myrseth became chairman of Morpol ASA, but then Morpol itself was acquired by Marine Harvest. The cobia operation was bought by Jerzy Malek, Morpol’s founder.
At an age (69) when most people retire, Mr Myrseth has started looking for opportunities for marine fish farming in South East Asia. “South East Asia, in my opinion, shows the greatest promise for marine fish farming,” he says. “There is a belt, plus/minus 10 degrees from the equator, where typhoons and serious storms are rare and therefore conditions for marine fish farming are better than further north or south.
“The country with the greatest promise is perhaps Indonesia,” he continues. “But of course there are some obstacles, such as lack of infrastructure, enormous logistical challenges and lack of qualified personnel.”
Mr Myrseth is researching species such as barramundi, grouper, pompano and snapper. He thinks these species have market potential and they are valuable enough to attract the attention of vaccine companies and feed companies.
There is growing interest in aquaculture in many developing countries and Bjørn Myrseth has views on what is needed to make this successful. “There are many important prerequisites to success, but for the industry as a whole I think it is important that producers work together on generic marketing.
“Look at what was done in Norway. Since 1980 Norwegian salmon farmers have contributed a small share of their income to generic marketing and during the crisis in the 1990s they paid as much as 3% of their export value into the marketing fund. This greatly expanded the market for salmon. Today they are still contributing 0.75% of their export revenue to marketing activities through the Norwegian Seafood Council.
“Another important aspect is to establish a quality standard. You have to let the customer know what quality he or she is buying, and he or she must be able to depend on that standard.
“Thirdly, continuous research and development (R&D) is crucial. Again, the Norwegian salmon industry benefitted from government programmes in basic research, and they have benefitted greatly from all the research done by the big feed companies. Today Norwegian salmon farmers are paying a ‘research tax’ of 0.35% on the value of their export sales. This fee goes directly into research and development, and it is extremely important. Without this R&D effort the industry would stagnate and die slowly.
“Plus, of course, profitability – fish farming must be profitable.”
No confidence in small-scale
“Medium- to large-scale operations are needed because aquaculture development requires two essential inputs: knowledge and capital. Small-scale projects generally lack both and they therefore, at best, become a small contribution to self-sufficiency for a family or a small village. It does not become an economic activity that is sustainable.”
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