Cermaq has announced it will freeze investments in Norway as a consequence of the country’s proposed resource rent tax.
CEO Steven Rafferty said that Cermaq does not concur with comments made by the Norway Finance Minister that the salmon producers “did not pay for the old licenses” making them free of charge.
“After many years working in the global salmon industry, I have referred to Norway as a role model for other salmon countries to follow. This cannot be the case going forward if the proposal is mandated. There are many details of the proposal that will impact Norway’s competitive position as a frontrunning salmon region negatively,” he said.
Detrimental
Cermaq satates that its owner, Mitsubishi Corporation, acquired the company in 2014 from the principal shareholder, the Norwegian Government, at a market price. Most of the price paid was for the valuation of the licenses.
Further growth of Cermaq has been through the license auctions also at market price, only two years ago, where the auction price was calculated the current tax regime.
On acquisition of foreign owned companies, it is often appropriate to factor in a country risk within the acquisition price where there is a volatile economy or a politically unstable environment, where Norway is seen as the opposite.
It is hard to believe with hindsight that Mitsubishi should have incorporated a country risk for an economy such as Norway, said Mr Rafferty.
”The vast majority of profits made in Cermaq Norway since 2014 have been reinvested in our operations. Though Cermaq has large operations also in Canada and Chile, the majority of the funds have been invested in Norway,” he said.
If the current porposal proceeds, Mr Rafferty said that there is little doubt the current resource tax proposal will lead to less investment in Norway and more outside of the country.
”As a major employer in these communities, we want to contribute to growth. We planned a new hatchery in Hasvik municipality in Finnmark, creating 30 new jobs, but that project is now on hold. It is a pity that a consultation process could not have taken place prior to the announcement of the new tax.”
Cermaq Norway employs 680 people in Nordland and Finnmark counties. The company is one of Northern Norway’s largest fish farming companies with four freshwater facilities, 43 sea facilities and two processing plants, as well as a viewing centre in Hamarøy.
