Back
Positive development and vast potential
Annual statement by the Group CEO
2017 will go down in the history books as the best year ever for Lerøy Seafood Group. Revenue was up from NOK 17.3 billion in 2016 to a total NOK 18.6 billion in 2017. The Group has also reported a record-high volume, and operating profit is up from NOK 2.8 billion in 2016 to NOK 3.7 billion in 2017. As such, we have taken another step forward towards our vision of being the leading and most profitable supplier of sustainable, high-quality seafood.

Over the past 25 years, the Company has enjoyed a constant and positive development and is perfectly positioned for future growth. Today, Lerøy is a unique seafood corporation with its fully integrated value chain for salmon/trout and whitefish. Few companies can compete with this. 

Increased demand

We can also report a significant increase in demand for seafood from all corners of the world. High demand results in high prices for both salmon and whitefish, which has been a contributory factor for the Group's excellent results. We are confident that this trend will continue in the years to come. Good access to the market is essential for a company like Lerøy, with sales of seafood to more than 70 different countries worldwide. China is an excellent case in point to illustrate this. In the autumn of 2010, Norway was banned from exporting directly to China and this situation remained in deadlock up to the end of 2017. Thanks to successful and resolute efforts by the Norwegian authorities, we can now see signs that China may reopen its market. These efforts may be of great importance for demand for salmon from China in the near future. The ban on exports to Russia remains, and Russia is one of the markets with the highest potential for sales of salmon and trout. We remain hopeful that Russia will also in time re-open the door for direct imports of Norwegian salmon and trout.

2017 was a fantastic year, and we can do even better – what we did well yesterday, must be done even better today!
Henning Kolbjørn Beltestad, CEO Lerøy Seafood Group

Development and improvements

2017 was a fantastic year, but we can still do better! Our strategy for development is based on an eternal perspective and comprises specific and continuous improvement measures throughout the value chain. One of our most important tasks in the future is to ensure that every one of our 3,900 employees focuses on fulfilling this strategy. Whatever we did yesterday has to be done even better today!

It is clear that the rate of change is accelerating. This requires a higher capacity for and more definite focus on innovation throughout the company. Digitalisation and technological developments that provide maximum production efficiency and real-time data utilised to develop even better management tools afford new opportunities for improvements to efficiency and progressiveness in every part of the value chain. Changes and improvements require major investments.

Lerøy Seafood Group invests substantial sums of money every year throughout the value chain, and 2017 was no exception.

Investments in whitefish

In 2016, Lerøy Seafood Group acquired the shares in Havfisk and Norway Seafoods (now Lerøy Norway Seafoods). Havfisk is the largest trawling operator in Norway with nine trawlers. The company’s tenth trawler, Nortind, was built in 2017 and started operations in January 2018. We have high expectations that the new trawler will provide even greater catch efficiency and improved product quality.

Lerøy Norway Seafoods has landing and processing facilities for whitefish caught by trawlers and the coastal fishing fleet in North Norway. The company has under-invested for many years and has had a considerable need for investments in terms of improvements to efficiency and quality at its facilities. Major investments were made in several of the company’s factories in 2017. Lerøy also plans to make further substantial investments in the near future, provided that the authorities facilitate stable and predictable framework conditions.

Building new forward-looking industrial installations

In the autumn of 2017, we started construction of the world's most modern recycling plant for large smolt in Kjærelva, Fitjar municipality. This plant will allow us to produce high-quality smolt up to a weight of 500 grams, reducing the amount of time in the open sea. Roe will be introduced in the facility for the first time in the spring of 2018, and the first release to sea is scheduled for 2019. This facility will provide considerable improvements in the quality of smolt, improved fish health, improved production at sea and future growth in volume in the region of Hordaland. In 2016, we made the decision to invest in a forward- looking industrial facility with high capacity for slaughtering and filleting salmon at Lerøy Midt on the island of Hitra. In developing this facility, we focused on new technology, automation, capacity, efficiency, food safety, the environment and quality. The building process has gone according to schedule and the facility will be ready to start production in May 2018.

Major activities abroad

Lerøy also has several factories in the Netherlands. Building work on Lerøy Seafood Center in Urk started in April 2017. This is a factory where the focus is on automation, quality and food safety, and it is designed for production of smoked and freshly packaged products. This will be the most modern factory in Europe and it will have the most innovative technological systems. It will represent an important part of our strategy of competing with low-cost production in East Europe and Asia. The factory will also provide significant capacity for frozen goods, acting as a central warehouse for frozen products for our other companies in Europe, aimed for further distribution to Asia and USA.

Our goal is for consumers to choose our seafood products rather than other proteins.
Henning Kolbjørn Beltestad

Focus on the consumer

For many years now, Lerøy Seafood Group has been one of the leading companies in terms of concept and product development. Our goal is for consumers to choose our seafood products rather than other proteins. We have, for example, played an important role in promoting ready meals and sushi in Europe. We currently have production facilities in Norway, Finland, France and Spain, and we are working on further developing this concept in other markets. The largest market in Europe for us is currently Spain, where we have a factory in Madrid. We have recently opened a new factory in Barcelona and just completed a factory in Valencia. “Ready meals” are products with a short shelf life and that require proximity to local markets and production. A close cooperation with the customer is also essential, keeping quality, innovation and product development at the core.

I am very much looking forward to seeing how this market develops in the near future. I am also very much looking forward to continuing work on the further development of Lerøy Seafood Group together with our employees and strategic alliance partners, in our efforts to create an even more forward-looking, efficient, competitive and sustainable value chain with the potential to create added value for all parties involved, and not least the consumer as the ultimate and most important part of the value chain. Without them, we would never be able to do what we do.

My sincere thanks to all of you for your wonderful efforts in 2017!

Business overview
With the acquisitions completed in 2016, Lerøy is now definitively the largest corporation in Norway for catches and processing of whitefish. One of the world’s largest seafood exporters of salmon and trout has therefore now acquired a significant international position within whitefish.

Lerøy Seafood Group has experienced significant growth both organic and through acquisitions over the past 15 years. Today, the Group is one of the world's largest producers of Atlantic salmon and trout. Subsequent to acquisitions completed in 2016, the Group is also now easily the largest corporation in Norway in terms of catches and processing of whitefish, with a significant position internationally. Lerøy Seafood Group is one of the largest seafood exporters in the world. The seafood industry is still a young industry with substantial potential for future development and growth.

The Board of Directors and management are in no doubt that previous acquisitions have created substantial value for the company and its shareholders. Future investments must also lay the foundations for sound operations and profitability. This criterion includes a special focus on management expertise and, of equal importance, the expertise within the organisation as a whole. 

The Group’s core activities demand various forms of expertise and a high degree of adaptability. For this reason, our organisation is made up of people with a wide range of formal backgrounds and practical experience from different sectors of trade and industry. As the Group is involved in a global industry which experiences continuous fluctuations in framework conditions, it is paramount that our employees remain up to date and expand their knowledge and areas of expertise. The Group comprises a young yet highly experienced organisation. Changes in framework conditions for the Group require employees who are dynamic, willing to learn and flexible. The Group’s employees meet these requirements. Our employees’ focus on competitive strengths and results is reflected in their commitment towards ensuring that the individual companies are also able to fulfil future requirements and thereby achieve the Group’s strategic goals and performance requirements.  

The Group's rapid development in recent years has been made possible by capable people who have found the Group to be an attractive employer. One of several important prerequisites for the Group’s continued positive development is its ability to offer attractive jobs to as many talented employees as possible. The Group must maintain a strong focus on leading the competition for result-oriented and skilled personnel with a high capacity for work and change. 

The growth of Lerøy Seafood Group generates ever increasing demands for business systems, risk management and capital. The Group maintains a continuous focus on developing business systems that can grow with the company and that provide a competitive advantage on the market. Risk management is key and covers all parts of the Group’s operations. The Group’s production companies face a substantial biological risk, and there is also substantial risk associated with the Sales & Distribution activities. The Group has a very strong focus on risk management in its daily operations, as well as by ensuring that potential acquisitions and alliances match its risk profile. 

Fish farming is very capital intensive. The industry has historically been undercapitalised, with an ensuing high level of financial risk. This is not compatible with the cyclical nature of the industry. Having a healthy, flexible and sustainable source of financing has always been, and will remain, a key focus in Lerøy’s strategy. Corporate management and the Board of Directors are actively involved in securing financial and structural relationships which allow the Group to achieve its long-term financial goals. The company’s financial contingency planning, both present and future, will allow the Group to take part in the value-generating structural reorganisation under way in the industry. 

Farming
In order to comply with the seafood market's increasingly strict requirements in terms of traceability, food safety, product quality, cost efficiency, sustainability and continuity of supply within the Group’s main areas of Atlantic salmon and trout, the Group considers it vital to be a fully integrated supplier. Control throughout the entire value chain is a key and extremely important element of the company's strategy. One of our main aims is to ensure coordinated growth in central parts of the production chain. Measures implemented to achieve this goal comprise major investments in new smolt production, including production based on recirculation technology.

The Group has completed several major developments: a new facility completed in 2013 in Central Norway and a new facility in North Norway completed in 2015. In 2017 and 2018, the Group is building two smolt facilities, one for salmon and one for trout, in West Norway. Since 2002, the Group's production of Atlantic salmon and trout has enjoyed a good development and now comprises units that in total harvested 158,000 tonnes in 2017.

Production takes place in three regions in Norway: Lerøy Aurora located in Troms and Finnmark, Lerøy Midt located in Nordmøre and Trøndelag, and Lerøy Sjøtroll located in Hordaland. The Group also produces salmon in Scotland through the associate Norskott Havbruk AS. The Group owns 50% of this company, which reported a harvest volume of 31,000 tonnes of salmon in 2017. As such, the Group is one of the world's largest producers of Atlantic salmon and trout. In 2017, Lerøy expects to harvest 182,000 tonnes of salmon and trout, including Lerøy's share of the volume from Norskott Havbruk.

The Group believes it has the potential to achieve further growth in volume with its existing licences. Release from stock costs for salmon and trout have increased in recent years. More expensive feed, mainly attributed to the weaker Norwegian currency, and increased expenses for fighting salmon lice have been the most important factors in this. In 2017, biological production in the Group has seen an improvement. However, this will not be immediately evident in the release from stock costs due to the long lead time for production of salmon and trout. The lead time for production of salmon and trout is very long, so release from stock costs are up in 2017 compared to 2016, though they started to fall during the year.

At the time of writing, release from stock costs are expected to be lower in 2018 than in 2017. Improvements in biological production in Norway have resulted in an increase in the supply of salmon from Norway in the second half of 2017. This resulted in pressure on the spot prices during the second half of the year, from a very high level in the first half. Prices realised by the Group for salmon and trout combined were up 9% compared with 2016.

The combination of these factors – volume, price and costs – gave an increase in revenue for the Farming segment, from NOK 8,338 million in 2016 to NOK 9,385 million in 2017. During the same period, operating profit increased from NOK 2,419 million in 2016 to NOK 2,942 million in 2017. The operating profit per kilo produced was up from NOK 16.1 in 2016 to NOK 18.7 in 2017.

North Norway
Lerøy Aurora AS represents the backbone of production in North Norway, and the company is a fully integrated producer of Atlantic salmon. The company harvested 39,200 tonnes of Atlantic salmon in 2017, up from 30,000 tonnes in 2016. In 2016,

Lerøy Aurora had its first release of large smolt weighing over 200 grams, which would not have been possible without the major investments in the Laksefjord smolt facility. The new facility has provided Lerøy Aurora with access to more and larger high-quality smolt, thereby increasing production volumes and minimising production time at sea. Based on positive experience, the Group decided in 2017 to expand the smolt facility in Laksefjord to further increase capacity for large smolt in Lerøy Aurora.

Lerøy Aurora also has one of Norway's most modern salmon processing facilities, located on the island of Skjervøy. Not only does this facility have slaughtering capacity for its own fish, it is also a major provider of slaughtering services to other suppliers. In 2015, an investment was made in a fully automatic filleting line on Skjervøy, significantly increasing the plant’s filleting capacity. Lerøy Aurora reported a marginal increase in release from stock costs in 2017 when compared with 2016, though the company remains at an industry-leading level.

At the time of writing, release from stock costs are expected to be stable in 2018. In total, the North Norway region reported an operating margin per kilo produced of NOK 26.1 in 2017, up from NOK 24.2 in 2016. The Group is satisfied with the development in Lerøy Aurora in 2017, and investment being made in increased post-smolt capacity will allow Lerøy Aurora to continue to grow within its region in the years to come. The current estimate for harvest volume in 2018 for Lerøy Aurora is 38,000 GWT.

Central Norway
Lerøy Midt is a major producer of salmon in Central Norway and has significant processing capacity. While 2015 and 2016 were difficult years for Lerøy Midt, with a high volume of fish harvested at a lower average weight than planned, developments in 2017 have been very positive.

In 2017, the company harvested 64,500 tonnes of Atlantic salmon, a significant increase from 52,200 tonnes in 2016. The Group is very satisfied with developments throughout the year and expects to see continued growth in harvest volume in 2018. The current estimate for harvest volume in 2018 is 68,000 GWT. Release from stock costs for

Lerøy Midt were marginally higher in 2017 than in 2016, but showed a substantial downwards trend towards the end of the year. At the time of writing, the Group expects significantly lower release from stock costs in 2018 when compared with 2017. For 2017, Lerøy Midt reported an operating margin per kilo produced of NOK 17.7, up from NOK 14.3 in 2016. Construction of the Group’s new processing facility for salmon on Hitra island has continued at full pace in 2017.

The facility is due to be completed in the second quarter of 2018 and will be the world’s most modern and efficient slaughtering and processing unit for salmon.

West Norway
Lerøy Seafood Group is mainly represented in West Norway by Lerøy Vest AS, a wholly owned subsidiary of Lerøy Seafood Group, and Sjøtroll Havbruk AS, in which Lerøy Seafood Group ASA owns 50.71% of the shares.

The companies operate as one unit with joint management. In 2017, Lerøy Sjøtroll reported a production volume of 54,000 tonnes of salmon and trout, down from 68,000 GWT in 2016. Around 23,000 GWT of total production volume in 2017 was trout. The Group is not satisfied with developments in Lerøy Sjøtroll in 2017. Moreover, the company reported an urgent situation at individual sites in the autumn of 2017 involving the Autumn 16 generation of salmon.

This situation had a negative effect on the harvest volume and release from stock costs, the latter being substantially higher in 2017 than in 2016. In total, the operating margin per kilo for 2017 was NOK 14.4, up from NOK 14.0 in 2016. The Group is not satisfied with the release from stock costs and production volume reported by Lerøy Sjøtroll, and a number of measures have been implemented recently. Of these, the Group’s highest expectations are for the construction of one of the world's largest RAS post-smolt facilities on the island of Fitjar.

The plan is to introduce eggs to the facility in the second quarter of 2018, with the first release of smolt in 2019. Based on in-house experience, the Group expects a high yield from this investment, including the potential for considerable reductions to release from stock costs and an increased production volume for the region. Projected harvest volume for Lerøy Sjøtroll in 2018 is 63,000 GWT, of which approx. 25,000 GWT trout. The Group also currently expects to see lower release from stock costs.

Wild Catch and Whitefish
On 2 June 2016, Lerøy Seafood Group signed agreements which, when implemented, would give the Group majority ownership of both Havfisk ASA and Norway Seafoods AS. The acquisitions were implemented on 31 August 2016, giving Lerøy 67% of the shares in Havfisk and 74% of the shares in Norway Seafoods ASA. On 16 September 2016, Lerøy issued a mandatory offer for all shares in Havfisk ASA and a voluntary offer for all the shares in Norway Seafoods AS. On 20 October of the same year, the Group reported acceptance of this offer within the expiry of the mandatory offer for Havfisk, providing Lerøy with a total shareholding in Havfisk of 96%. On 27 October 2016, Lerøy took the decision to make use of the option for compulsory acquisition of minority shareholdings, laid down in the Public Limited Companies Act (Norway), and thereby gained ownership of 100% of the shares in Havfisk ASA and Norway Seafoods AS.

In total, this represents the largest acquisition in the Group’s history. As a result of the transactions, Havfisk ASA and Norway Seafoods AS were consolidated in the Group's financial statements as of 1 September 2016. In 2017, the two companies contributed NOK 386 million.

Havfisk ASA’s primary business segment is the wild catch of whitefish. At the end of the financial year, Havfisk owned 100% of the shares in Nordland Havfiske AS, 60% of the shares in Hammerfest Industrifiske AS and 97.62% of the shares in Finnmark Havfiske AS. Havfisk has had nine trawlers in operation in 2017 with 29.6 quota units for cod/haddock.

In February 2016, Havfisk signed an agreement with Vard for the construction of a new vessel to replace the Stamsund. The value of this contract is NOK 325 million. The newbuild is a combination trawler (fresh and frozen fish) with dimensions 80.4 metres x 16.7 metres. The vessel was delivered in January 2018, and the Group now has ten trawlers in operation. Havfisk has licence rights to harvest more than 10% of the total Norwegian cod quota in the zone north of 62 degrees latitude.

This represents more than 30% of the quotas allocated to the trawler fleet. Havfisk also owns several processing plants, which are mainly leased out to Norway Seafoods Group on long-term contracts. Havfisk’s trawler licences stipulate an operational obligation for these plants. Norway Seafoods comprises a total of eight processing plants in North Norway. Five of these are leased from Havfisk AS. In Norway, the company mainly produces fresh and frozen fillets, loins, portions and tail pieces of cod, saithe and haddock. It also produces some salted fish as well as king crab and snow crab products.

Norway Seafoods is the largest purchaser of cod from the coastal fishing fleet in Norway. With effect from 1 January 2017, Lerøy Seafood AS signed an agreement for the business transfer of sales, marketing, logistics and credit functions in Norway Seafoods. Further to this agreement, around 20 employees at the company’s offices in Oslo and Ålesund have been offered positions at Lerøy Seafood AS in Bergen. In addition, Norway Seafoods’ inventory of finished products has been taken over by Lerøy Seafood. An agreement has also been signed for the sale of Norway Seafoods’ business in Denmark to Seafood International A/S, a Danish seafood group. The business was sold on 9 January. Seafood International A/S subsequently changed its name to Seafood Danmark A/S, and the Group owns one third of the shares in the Danish company.

In Q1 2017, a business combination was conducted between Norway Seafoods Group AS and Norway Seafoods AS, with Norway Seafoods AS as the recipient party. Norway Seafoods AS changed its name to Lerøy Norway Seafoods. Significant changes were made in 2017 to management structure, and the CEO of Havfisk is now also the CEO of Lerøy Norway Seafoods.

The Group has achieved substantial reductions in costs and has initiated the process of exploiting synergy effects in Lerøy Norway Seafoods. This process is in its initial stages, and much remains to be done. Industrial processing of whitefish in Norway is challenging, but the Group is confident that such operations are possible and that the challenges can be solved by means of improved marketing and more efficient operations. This process will take time, but the Group is confident there are gains to be made.

Value-added Processing, Sales and Distribution (VAPS&D)
One central aspect of Lerøy Seafood Group's strategy for growth is offering new products to new markets. This requires knowledge of and proximity to both customer and market.

Lerøy Seafood Group has a long, proud history within the sale, distribution and processing of seafood. Today, the Group sells its products to more than 70 markets worldwide and has a vast network of customers in the majority of these markets. Not only does this afford the Group unique knowledge of market trends, it also allows for significant diversification of risk. At the same time, there is a clear trend among consumers, moving from preference for whole fish towards products with a higher degree of processing. In recent years, the Group has made significant investments in so-called "fish-cuts".

These are factories/facilities on the end market with relatively simple processing but large volumes, and where proximity to the end customer is key. In many ways, these “fish-cuts” represent a revolution in the distribution of fresh fish. New and simple consumer-oriented packaging and short and efficient logistics chains make it possible for many more retailers to sell fresh fish.

Moreover, the Group has achieved substantial development within the “ready meals” segment in 2016 and 2017 and has identified very interesting potential in this market. The investments made have eradicated the dividing lines that existed previously between processing operations and sales and distribution. Activities within sales and distribution now increasingly comprise processing. As a result, the Group has merged the two reporting units Value-added Processing (VAP) and Sales and Distribution (S&D) into one segment from 1 January 2017. In 2017, the segment reported revenue of NOK 17.6 billion, up from NOK 16.0 billion in 2016. The operating margin in 2017 was 2.5%, on a par with the figure reported in 2016. Operating profit for the segment was up from NOK 399 million in 2016 to NOK 435 million in 2017.

Lerøy Fossen AS is currently a dedicated salmon and trout processing company and has the largest fish-smoking facility in Norway, on the island of Osterøy outside Bergen. The company has strong local roots and a focus on quality. The company’s products are sold all over the world and fit exceptionally well into Lerøy Seafood Group’s marketing strategy, which calls for increasing levels of processing.

Lerøy Smøgen Seafood AB is a Swedish seafood company involved in the production of various types of smoked seafood products. It also produces and distributes seafood salads and products based on shellfish in brine. Its products are marketed in a number of countries. Lerøy Smøgen Seafood AB is an important incubator for new products in Lerøy Seafood Group ASA.

Rode Beheer B.V. Rode from the Netherlands is a leading producer of processed seafood and has a wide product range comprising smoked, marinated, freshly packaged and frozen products. Rode is extremely well positioned for supplying high-quality seafood to customers in markets such as the Benelux countries, Germany and France. In 2016, Lerøy Seafood Group gained ownership of 100% of the shares in Rode. In 2017, the company completed a state-of-the-art sales, distribution and processing unit in the Netherlands.This is expected to make significant contributions in the years to come.

Bulandet Fiskeindustri AS is a modern Norwegian company processing whitefish for the Norwegian grocery market. The facility is located in Bulandet in the region of Sogn og Fjordane. The most important raw materials are saithe, cod, cusk and ling, and the company’s products play an important role in complementing the Group’s product range.

Lerøy Seafood AS has the highest revenue of all the Group companies, and represents the very core of the Group's sales and logistics operations.The company changed its name from Hallvard Lerøy AS to Lerøy Seafood AS at the start of 2017. In view of Lerøy Seafood AS' central position in the value chain, developing and maintaining its interaction with partners is a priority area. The Group’s global sales network comprises Lerøy Seafood AS' sales offices in a number of countries, as well as established associates in Sweden, Finland, France, the Netherlands, Spain, Portugal and Turkey. Lerøy Seafood AS has sales offices in China, Japan, France and the USA. The sales offices and the associates therefore cover different parts of the Group’s international markets.

The Group’s presence in central markets allows for closer follow-up of key customers and development of new customer relationships. The Group will work to establish a presence in even more markets in the years ahead. In addition to international sales and marketing, the Group is also engaged in nationwide distribution of fresh fish to the Norwegian market via Lerøy Sjømatgruppen AS, in which the Group's Norwegian wholesalers participating along with other external enterprises. This business is based upon establishing regional foundations and expertise in the region in which the customer operates.

At the same time, the Group's network offers economies of scale from nationwide marketing and distribution of seafood. Lerøy Sverige AB is the holding company for the three Swedish companies Lerøy Allt i Fisk AB, Lerøy Stockholm AB and Lerøy Nordhav AB. Lerøy Allt i Fisk AB in Gothenburg is a full-range seafood company with a particularly strong position on the Swedish catering and institutional households market. Lerøy Stockholm AB is located in Stockholm and is one of the city’s largest distributors of seafood, with a particularly high level of expertise in the grocery trade.

The sales and distribution activities in France are of vital importance and currently consist of SAS Lerøy Seafood France, which as well as two fish-cuts, has a sales office in Boulogne.

In 2014, the Group started sales and distribution activities in Spain with the establishment of Lerøy Processing Spain. This company is enjoying a rapid pace of development. It not only runs a modern factory on the outskirts of Madrid, but also opened two new factories for ready meals in 2017. Developments in Spain are very exciting, and the Group is confident that it is well-positioned for sustained positive development.

Operations in Portugal are run by Lerøy Portugal Lda. The company enjoys a good position on the Iberian peninsula, which is a large and important market for Norwegian seafood. The company works purposefully to strengthen its position as a distributor of fresh seafood in Portugal. Lerøy Finland OY was consolidated into Lerøy Seafood Group in 2011.

Lerøy Finland OY is located in Åbo/Turku in Finland and enjoys a strong position in the sale and distribution of seafood on its domestic market. The Group's operations in Turkey are managed by Leroy Turkey. In close collaboration with Lerøy Seafood AS, the company has developed the Turkish market for Atlantic salmon. In 2015, Lerøy Seafood Group increased its ownership interest in the company from 50% to 100%.

Associates
Lerøy Seafood Group ASA has shareholdings in several associates. The largest of these are Norskott Havbruk AS, Seafood Danmark A/S and Seistar Holding AS.

Norskott Havbruk AS is 50% owned by Lerøy Seafood Group ASA and SalMar ASA respectively. Norskott Havbruk AS was set up in 2001 for the sole purpose of acquiring the company currently named Scottish Sea Farms Ltd. (SSF). SSF is the second-largest fish farming company in Scotland with a harvest volume of 31,000 tonnes of salmon in 2017. SSF produces smolt, mainly to meet its own requirements. The company runs two modern land-based plants for processing salmon on the Scottish mainland and in the Shetland Islands. The company works continually to consolidate its position as the leading and most cost-efficient producer of high-quality Atlantic salmon within the EU. The company is already well positioned in several market segments with a focus on high quality, for instance under the respected brand name Label Rouge. The company expects to harvest 26,000 tonnes of salmon in 2018. SSF has significant potential for organic growth in the years to come and aims to achieve an annual harvest volume of between 35,000 and 40,000 tonnes from existing licences.

To ensure such a high volume, the company is currently making major investments in smolt production. In 2015, the Group acquired a 50% ownership interest in Seistar Holding AS, a shipping company involved in well boats. Seistar Holding AS supplies well boat services to companies in West Norway. The company took delivery of a new, large well boat in 2016, which will play an important role in the Group's farming operations in Hordaland.

For some time now, the Group has had a working relationship with Brdr. Schlie in Denmark. In 2013, the parties entered into a joint venture and founded Lerøy Schlie A/S, with a 50% stake each. At the start of 2017, Lerøy sold its shares in Lerøy Schlie A/S and Norway Seafoods Group's operations in Denmark to Seafood International A/S. Seafood International A/S later changed its name to Seafood Danmark A/S, and the Group owns one third of the shares in the Danish company. In recent years, Norway Seafoods Group's activities in Denmark have been very challenging, but developments for the Danish companies in 2017 have been positive. 

Local roots, global perspective

Every day, over 4,000 Lerøy employees contribute to the supply of Norwegian seafood equivalent to five million meals in more than 70 different countries.

Our main office is located in Bergen, but we have fishing vessels and fish farms in operation along the entire coast of Norway. Lerøy owns ten trawlers and receives regular deliveries from more than 600 vessels fishing along the coast.

These vessels make daily deliveries of whitefish to onshore stations, where the fish is processed and packaged, while well boats transport salmon and trout from our fish farms in North Norway, Central Norway and West Norway to sites for processing.

In addition to our facilities for production and packaging in Norway, we have production and distribution in Sweden, Denmark, Finland, France, the Netherlands, Portugal, Spain and Turkey. The fisherman-farmer, Ole Mikkel Lerøen, who would row to the fish market in Bergen to sell live fish at the end of the 19th century, most probably had no concept of what he was starting – a commercial enterprise that 120 years later would be serving the entire world 1.8 billion seafood meals every year.

Today, Lerøy is a world-leading seafood corporation, supplying thousands of different products to retailers, restaurants, canteens and hotels worldwide.

The seafood pioneer
History
The Lerøy Seafood Group can trace its operations back to the end of the 19th century, when the fisherman-farmer Ole Mikkel Lerøen started selling live fish in Bergen's fish market.

The fish was hauled to market in corfs behind Ole Mikkel Lerøen’s rowing boat from the island of Lerøy to the fish market in Bergen, a journey that could take between six and twelve hours, depending on prevailing winds and currents.

Over time, Ole Mikkel Lerøen’s operations gradually came to include retail sales in Bergen, the sale of live shellfish and a budding export business. In 1939, two of his employees, Hallvard Lerøy sr. and Elias Fjeldstad, established a wholesaler and seafood export company – Hallvard Lerøy AS. In time, the company invested in a facility where they could receive pelagic and white fish and carry out fish farming. Poor results and insufficient capitalisation in the late 1980s and early 1990s forced the company to close down its facility for receipt of fish and sell its shareholdings at that time in fish farming in order to safeguard their core operation: wholesale and exports. In 1994, the company carried out a last emergency share issue and started the process of re-establishing a healthy business. At that time, the company's equity was valued at NOK 20 million, prior to an issue worth NOK 5 million.

Amended strategy
The potential for growth within fish farming in combination with increasing customer requirements necessitated a radical change in the Group's business concept and strategy. The new strategy was extremely capital intensive. Up to 1997, the Group had been a family-owned operation. In 1997, a private placing with financial investors was carried out for the first time. The purpose of the placing was to develop the Group throughout the entire value chain, and participate in the future consolidation of the fish farming industry. The initial step of what was to become a number of major investments within fish farming occurred in 1999, when the company acquired a minority interest in what was then Hydrotech- Gruppen AS. In the summer of 2001, Norskott Havbruk AS was founded with the sole purpose of acquiring Golden Sea Products, now Scottish Sea Farms Ltd. in the UK.

Lerøy’s seafood enterprise was born at the sh market in Bergen at the end of the 19th century.

Access to capital and expertise
The Group was listed on the Oslo Stock Exchange in June 2002, providing access to the capital market for the Group and thereby strategic financial room to manoeuvre. Sufficient access to capital and expertise have been critical factors in the development of the Group from a wholesaler/seafood exporter to the current global and fully integrated seafood corporation.

At the turn of the new millennium, large parts of the fish farming industry were seriously undercapitalised and suffering from the impact of a short-term perspective and a lack of risk management. This was not compatible with the requirements placed on enterprises in the fish farming industry at that time. Lerøy Seafood Group had achieved a more solid position by August 2003, when they purchased Nye Midnor AS as it was then called – the company that currently makes up the main share of Lerøy Midt AS. The Group went on to acquire Lerøy Aurora AS in 2005, Fossen AS and the remaining shares in Hydrotech-Gruppen AS in 2006, Lerøy Vest in 2007 via a business combination and a majority shareholding in Sjøtroll Havbruk AS in 2010. The acquisition and demerger of Villa Organic were conducted in 2014. The above-mentioned companies along with a number of minor acquisitions have, together with highly skilled local management, been developed via organic growth to form what is now one of the world's largest producers of Atlantic salmon and trout. The fish farming segment employed 1,419 persons at the end of 2017 in Norway.

Over time the Group has made substantial invest History «Lerøy’s seafood enterprise was born at the fish market in Bergen at the end of the 19th century.» ments within the Processing segment (VAP). These investments in VAP (value-added processing) not only generate a wider product range and open the door to new markets, but also provide more room for manoeuvre in relation to the sale of own-produced salmon and trout. The Group made their ambitions clear in 2002 with the investment in fish-smoking capacity in Sweden (Lerøy Smøgen). In 2005, they went on to invest in a processing facility for white fish in Bulandet (Bulandet Fiskeindustri) in order to further expand their product range. In 2006, the Group expanded its high-value processing plant for trout and salmon on the island of Osterøy (Lerøy Fossen). The Group's acquisition of 50.1% of the shares in the Dutch seafood company Rode Beheer BV Group took place in 2012. The remaining 49.9% was acquired in 2016. The Group has subsequently gone on to expand capacity at all its existing plants. In April 2017, the Group started building Lerøy Seafood Center in Urk in the Netherlands, a factory focusing on automation, quality and food safety and producing smoked and freshly packaged products. This will be the most modern factory in Europe and will have the most innovative technological systems. The framework conditions for industrial development in Norway are increasingly unsatisfactory, however resulting in a trend whereby production is outsourced from Norway to countries with low production costs.

Reaching new markets
Despite this trend, Lerøy Seafood Group has invested heavily in Norway, most recently with the development and doubling in capacity of the plant on the island of Osterøy outside Bergen in 2014.

The VAP segment currently employs 494 persons, 167 of these in Norway. The Group's ambition to increase demand for seafood in the form of new products for new markets has constantly been the driving force behind the Group's investments in the Sales & Distribution segment. This segment not only sells its own production of salmon and trout, but also has a high level of sales activity in cooperation with third parties, ensuring a wide product range for the Group within seafood. In recent years, the Group has also made significant investments in processing facilities, in order to take part in leading the “revolution” within the distribution of fresh seafood. These investments have been made in what is known as “fish-cuts”, processing facilities where proximity to the customer is key. The distribution of fresh seafood requires quality throughout the entire organisation, flexibility, continuity in supply and a high level of service. Today, the Group has a number of fish-cuts throughout Europe, and Leroy Processing Spain can report an exciting development within ready meals and sushi. In addition to the company’s factory in Madrid, the Group completed a new factory in Barcelona in 2017 and a second new factory in Valencia, completed in February 2018. The Group currently sells seafood to more than 70 markets worldwide. The Sales & Distribution segment currently employs 975 persons, 412 of whom work in Norway.

With the development of the VAP and Sales & Distribution segments, an increasing overlap in operations emerged. The Group therefore decided to report both these operations as one segment from 2017: VAPS&D.

Nordtind, an offshore trawler, was handed over from the shipyard in January 2018. Hav sk AS, primarily involved in catches of white sh, now has nine trawlers in operation. Together with Lerøy Norway Seafoods AS, these two companies make up the Wild Catch and White sh segment.

Innovator within seafood
Ever since its very foundation, the Group has taken a pioneering role within a number of areas in the Norwegian, and subsequently international, seafood industry. The main focus has always been on developing the markets for seafood. The Group has very frequently been the first to launch on new markets, or to commercialise new species of fish. One of the main goals for the Group is to be an innovator within seafood, and preferably in cooperation with the end customer. This is important not only within product development, but also in other areas such as the development of efficient logistics and distribution. This pioneering spirit is still very much alive in the Group.

2017 will go down as one of the most important years in the company's long history. With the acquisition of 100% of the shares in the trawler operator Havfisk ASA and 100% of the shares in Norway Seafoods AS (now renamed Lerøy Norway Seafoods AS) in the autumn of 2016, the Group has embarked on a new and exciting journey, resulting in the full integration of whitefish into the Group's well-established value chain in 2017.

Lerøy Seafood Group is now a fully integrated company, having achieved control of the entire value chain for a full range of seafood products – from the sea to the consumer. At the start of 2018, the seafood corporation Lerøy Seafood Group has a unique position for further growth and development.

Important events
Read about our important, strategic events from 1999 and up until today.
2017
  • Integration of white sh in the value chain (Wild catch)
  • Kjærelva, Fitjar (Farming): Construction start new production plant
  • Leroy Processing Spain: Construction of new factories in Barcelona and Valencia(VAPS&D)
  • Rode (VAPS&D): Construction start new industrial building in Urk, the Netherlands
  •  Construction of new factory at Jøsnøya on Hitra island
2016
  • Capital supply
  • Acquisitions of 100% of the shares in Hav sk ASA (trawling operator) and Norway Seafoods Group AS (processing, sale and distribution of white fish
  • Rode Beheer BV (VAPS&D): Acquisition of the remaining 49.9% of the shares

 

2015
  • Seistar Holding AS (shipping company involved in well boats): Acquisition of 50% of the shares in Seistar Holding AS
  • Lerøy Turkey ( sh-cut): Shareholding increa- sed from 50% to 100% (former Alfarm Alarko Lerøy)
  • Norsk Oppdrettsser- vice AS (cleaner sh): Shareholding increa- sed from 34% to 51%
  • Senja Akvakultursen- ter AS (cleaner sh): Acquisition of 100% of the shares
  • Preline Fishfarming System AS (R&D): Owns 91% of the shares
2014
  • Seistar Holding AS (shipping company involved in well boats): Acquisition of 50% of the shares in Seistar Holding AS
  • Fish-cut investment: Investments in new facilities in Norway, France, Spain and Denmark
  •  Villa Organic AS (farming): Demerged and Lerøy Aurora acquires eight new fish production licenses
2012
  • Rode Beheer BV (VAPS&D): Shareholding increased to 50.1% in the Dutch seafood group
2010
  • Sjøtroll Havbruk AS (Farming): Acquisition of 50.71% of the shares
2009
  • Austevoll Seafood ASA reduces its ownership of LSG from 74.93% to 63.73%
2008
  • Austevoll Seafood ASA increases its ownership of LSG from 33.34% to 74.93%
2007
  • Lerøy Vest (Farming): Acquisition of 100% of the shares via a busi- ness combination
  • Capital supply
2006
  • Lerøy Hydrotech AS (Far- ming): Acquisition of 100% of the shares (currently consolidated in Lerøy Midt AS)
  • Capital supply
  • Lerøy Fossen AS (Farming & VAPS&D): Acquisition of 100% of the shares
  • Investment in whole salers (VAPS&D): Investments resulting in nationwide distribution of fresh fish
2005
  • Bulandet Fiskeindustri AS (VAPS&D): Corporate relationship established with acquisition of more than 50% of the shares.
  • Lerøy Alfheim (VAPS&D): Investment within wholesalers and distribution in Norway
  • Laksefjord AS (Farming): Acquisition of 100% of the shares
  • Lerøy Aurora AS (Havbruk): Acquisition of 100% of the shares
  • Capital supply
  • Alfarm Alarko Lerøy (Associate): Partnership with Alarko Holding in Turkey
2004
  • Lerøy Portugal (VAPS&D): Acquisition of 60% of shares (Portnor Lda)
2003
  • Capital supply
  • Lerøy Midnor AS (Farming): Acquisition of 100% of the shares (currently consolidated in Lerøy Midt AS)
2002
  • Lerøy Smøgen (VAPS&D): Investment in fish smoking company in Sweden
  • Listing on the Stock Exchange
  • Capital supply
2001
  • Lerøy Sverige (VAPS&D): Investment in distribution companies in Sweden
  • Scottish Sea Farms Ltd: Investment established via 50% shareholding in Norskott Havbruk AS
2000
  • Capital supply
1999
  • Lerøy Hydrotech (Farming): The Group’s first investment (associate) in salmon production
Important events in 2017
The construction and opening of new factories and production facilities and the acquisition of the whitefish companies, Havfisk and Norway Seafoods Group, are among the events that dominated the past year.

Integration of havfisk and Norway Seafoods GroupAfter the acquisition in 2016 of 100% of the shares in Havfisk and Norway Seafoods Group, 2017 was the year when whitefish was to be integrated into the Group's well-established value chain – an exciting and demanding process. Norway Seafoods changed its name to Lerøy Norway Seafoods, and a business combination was carried out between the two companies Norway Seafoods AS and Norway Seafoods Group AS. The organisation of Lerøy Norway Seafoods’ factories and the organisation of Havfisk were continued under the wild catch and whitefish segment, while the two companies’ sales and logistics functions were coordinated with the Group's sales and distribution department in Bergen.

With an integrated sales organisation, the Group has now taken an important step forward, and is set to gain an even stronger market position. The further development of existing and new markets for whitefish and improvements to logistics efficiency and synergy effects between redfish and whitefish represent significant opportunities for the Group going forwards. The Lerøy Group now has access to more than 20 percent of all cod from Norway. This affords the company a unique position, and Lerøy is now an unparalleled, fully integrated company with control of the entire value chain within both whitefish and redfish from fjord and sea to the consumer.

New production facility at KjærelvaIn May 2017, Lerøy Vest AS and Sjøtroll Havbruk AS started work on the construction of one of the world’s largest RAS facilities for young fish at Kjærelva in Fitjar municipality. On completion in 2019, the building will be one of the largest and most productive young fish facilities in the world. The facility will have 12 departments, two of which are hatchery departments and 10 are RAS departments for further growth. The production facility will have the most advanced filters for water purification both for input and output water and will have close to zero discharges of nutrient salts. When the facility reaches full production in 2020, the number of employees will increase from the current seven to 25 employees at full operation. The plan is to introduce roe in the second quarter of 2018 and to have the first delivery/release to the sea from the facility in 2019. Over time, the Group has accumulated positive and comprehensive experience of this type of technology, and the investment is expected to help reduce production costs for Lerøy Sjøtroll.

New factory on Jøsnøya islandIn Q4 2016, Lerøy started construction of a new factory on the island of Jøsnøya in Hitra municipality. Completion is scheduled for Q2 2018, and progress is on schedule to date. According to plans, the first fish will be harvested and processed in May 2018. The construction of this factory represents a significant investment that will boost the Group's initiative within processed products. The factory will have a high level of automation, and many of the former manual processes will now be performed by new technology. This new technology has been developed by means of a close and constructive cooperation with several key equipment suppliers. Capacity at the new Jøsnøya facility will be substantially greater than former capacity at the old plant. Capacity for fillet production will see a particular increase, allowing for greater flexibility and room for manoeuvre. As a result of the development, the company’s old slaughter plant on Dolmøya island will be closed in the second quarter of 2018.

Sushi production in Spain Lerøy Processing Spain, the Group's sales and distribution operation in Spain, currently operates a modern factory on the outskirts of Madrid and is a major producer of sushi. In April 2017, they opened a new factory in Barcelona and plan to open yet another factory in Valencia in February 2018. This factory will produce sushi and ready meals, such as Japanese dumplings. It will also have a separate gluten-free department for sushi. The new factory, with its 90 employees, is expected to produce between 16 to 18 million pieces of sushi in 2018. The factories in both Madrid and Barcelona were awarded “High Level” after evaluation by the International Food Standard (IFS) in 2017. This is a common standard and system used to quality-assure and select suppliers. It can be used by dealers to ensure proper food safety for the goods produced.

New factory in the NetherlandsIn April 2017, work started on the construction of a new industrial building for Rodé Vis. Rodé Vis has been part of Lerøy Seafood Group since 2012. The new factory is located in Urk in the Netherlands and is the fifth new facility for the company in the town. Food safety is a central factor at the new factory, as processing lines, cutting technology and packaging lines will be fully automated. Production processes are kept separate, and there is a minimum amount of manual work. Not only is the factory closer to the European market and located close to Schiphol airport, the largest airport in Europe, it is also close to the container terminals in Rotterdam and Antwerp, in total making Urk an ideal location as a European hub for logistics. The factory is scheduled for completion at the start of 2018.

About us
Lerøy in every kitchen
Vision and values
Lerøy Seafood Group has a strong focus on ensuring proper management of resources in the sea, allowing for growth for the seafood industry and the continuing supply of high-quality seafood in the future.

Vision
We shall be the leading and most profitable global supplier of sustainable high-quality seafood.

Enviromental vision
Take action today – for a difference tomorrow.

Quality vision
We shall be the customer´s preferred supplier of seafood by focusing on preventive action, quality, the environment and professional competency.

Our values

  • Creative
  • Honest
  • Open
  • Responsible
From sea and fjord to table
The value chain
Lerøy is involved in every stage of the production of salmon, trout, white fish and shell fish. In other words, we are involved not only in catches and fish farming, but we also package and process fish at our plants and distribute thousands of different seafood products to shops, restaurants, canteens and hotels – in more than 70 different countries worldwide.

One important element in Lerøy Seafood Group’s strategy is to be a fully integrated supplier of the Group's key products, and the business is operated via a number of subsidiaries in Norway and abroad.

The Group reports within three segments:

  • Farming
  • Wild catch
  • Value added products (VAP), Sales & Distribution

Farming

The Farming segment comprises the Group's activities involving production of salmon and trout and includes harvesting and an increasing volume of filleting. The Group’s companies in this segment – Lerøy Aurora, Lerøy Midt and Lerøy Sjøtroll – represent a major employer along the Norwegian coastline and strive to be visible and active in all the regions in which they operate.

Wild catch

The Wild Catch and White fish segment comprises businesses acquired in 2016, when Lerøy Seafood Group became the sole owner of both Havfisk AS and Norway Seafoods Group AS. These are businesses with substantial operations in the catching and processing of white fish in Norway. Havfisk currently has ten trawlers, while Lerøy Norway Seafoods runs factories in Berlevåg, Båtsfjord, Forsøl, Kjøllefjord, Melbu, Stamsund, Sørvær and Tromvik. Lerøy also has facilities in Bulandet and on Sommarøy island.

Value added products (VAP)/ Sales & Distribution

Lerøy has a global reach within Sales & Distribution, and works with sales, marketing, product development, distribution and simple processing of the Group’s own raw materials, as well as a large volume of raw materials from partners and a network of suppliers. In this segment, Lerøy Seafood Group has wholesalers, factories and seafood centres in a number of different markets.

The VAP segment is mainly involved in high-value processing of salmon and trout, but also other species. The segment’s facilities are located on the island of Osterøy outside of Bergen, in Smøgen in Sweden, in the Netherlands and in Turkey. The segment's products are increasingly sold to the global market.

Priority tasks
Lerøy Seafood Group’s vision is to be the leading and most profitable global supplier of quality sustainable seafood. To achieve this, the company must continue to focus particularly on the following:

Alliances
Values are generated by businesses forming a network in the value chain. Businesses in the network have plenty of opportunities to focus on their own core activities and to capitalise on economies of scale and reduced risk. We must constantly improve the Group’s core operations including the development of long-term and committed alliances with both suppliers and customers. Over time, this will ensure a sufficient range of products and that our solutions are cost-efficient and adapted to the various markets and therefore also profitable.

Market orientation
Emphasising development in new and existing markets based on forward-looking solutions and alliances that will ensure profitability and increased market share. Being among the leading companies within product development to ensure customer satisfaction and thereby profitability.

Environment and quality
Maintaining a strong focus on positive attitudes towards quality and the environment among management and employees. Further development of processes and routines throughout the entire value chain from breeding to smolt, fish production, harvesting, processing, sale and distribution.

Risk management
Continuing to develop systems for identifying risks in order to avoid imbalances between commercial risks and the quest for profitability. The Group’s risk profile and its strategies for value generation must be reconciled with the Group’s available resources.

Know-how
Giving priority to the development of expertise and adaptability in all segments and at all levels. Profitable growth requires improved expertise in the fields of management, improved operations, development of incentive systems, financial management, exploitation of new technology, product and market knowledge and systematic marketing.

Strategic business development
For many years the Group has made significant acquisitions.Strategic business development is also of decisive importance for the continued development of the Group. This will ensure the best possible utilisation of the Group’s resources in order to provide optimum value generation for the company’s shareholders, employees and major partners.

Corporate social responsibility
Key figures
Ethics and social responsibility
Lerøy's main activities take place in Norway, but we trade with numerous countries worldwide. It is therefore important for us to ensure that all our activities comply with our set of values.

Lerøy Seafood Group is a corporation involved in global business and working relationships with suppliers and subcontractors worldwide.

In order to safeguard all our activities, we have prepared a set of values that apply to us and our partners in our daily work. Our ethical code of conduct has been reviewed by the Board of Directors and implemented in every Group company. The Group is responsible for ensuring the ethical code of conduct is put into practice, but each employee also bears an individual responsibility to follow the code of conduct when carrying out tasks for the Group. The company management is responsible for ensuring full practice of and compliance with the ethical code of conduct.

Key words for the contents of the ethical code of conduct:

  • Ethical requirements for suppliers and subcontractors
  • Requirements on regulation of working conditions for employees
  • The rights of the company’s employees, and employees of suppliers and subcontractors 
  • Factors relating to HSE
  • Forced labour/discrimination
  • Exploitation of resources and impact on local environment
  • Corruption
  • Notification of censurable conditions
  • Ethical guides for employees representing the company outside the workplace

Lerøy Seafood Group has an international working environment. A number of our employees are from other countries, and several of our companies have a multinational workforce. Some of our companies are located close to local refugee centres. By employing residents at such centres, we make an important contribution to successful integration in the local community. A number of the people who live in such centres work at our facilities for short or longer periods of time. They contribute towards value creation and gain valuable experience of working life in Norway.

Companies in the Lerøy Seafood Group work closely with employee representatives. This is based on a close working relationship between local representatives and local management at each company. This cooperation is also very much evident at the core of the Group, where the corporate management and a working committee representing the majority of trade unionists exchange information and discuss shared challenges and opportunities, both at regular intervals and when required. If necessary, formal discussions and negotiations are conducted.

Norwegian fisheries and the fish farming industry have been of great importance for Norway as a nation for past generations and will continue to be so in the future. The coast of Norway and its coastal communities would not be the same without fisheries and the fish farming industry.

What many do not however realise however, is the importance of this industry for other municipalities in Norway. For every full-time equivalent within the fisheries and fish farming industry, 1.1 full-time equivalents are created in other industries nationwide. Local communities, previously facing the threat of rural depopulation, can now face the future with optimism. New jobs are being created not only in the fisheries and fish farming industry, but also in local and national businesses that supply products to our industry. Several municipalities are dependent upon the activity and jobs that are created and sustained with the help of the fisheries and fish farming industry. Local kindergartens and schools require teachers and personnel. New roads are built and new technology developed – to mention only a few major factors.

Lerøy Seafood Group reports according to the Global Reporting Initiative (GRI). This report can be downloaded from the company's website, www.lsg.no. As a corporation, Lerøy Seafood Group has decided to support various activities related to children and young people in local communities. Diet, health and healthy eating are important elements in our efforts to help children and young people, and are essential for young people if they want to achieve their goals. We are therefore always happy to see children and young people enjoying healthy seafood at different events.

Lerøy Seafood Group is fully committed to developing the local communities where the Group’s different facilities are located, and aims to generate increased earnings for these communities by purchasing local goods, equipment and services wherever possible. 

Lerøy Seafood Group's companies in Norway purchased goods, equipment and services totalling NOK 11.8 billion in 2016. The gures show that the Group purchased these goods, equipment and services from 286 different municipalities in Norway. In 2016, the Group had facilities located in close to 60 different Norwegian municipalities.

Our employees contributed NOK 460 million in income tax to 257 different municipalities. Based on our activities over the past seven years, Lerøy Seafood Group has in total contributed to more than NOK 3 billion in tax. As such, we make an important contri- bution towards sustaining a number of local communities and workplaces in many different parts of Norway.

When measured in terms of value creation per full-time equivalent, the individual businesses made the following contributions in 2014*:

  • Aquaculture NOK 2 663 million per full-time equivalent
  • Fishing and catches NOK 1.082 million per full- time equivalent
  • Fish processing NOK 1.103 million per full-time equivalent

2017

  • Revenue: 118 623 515 (1,000 NOK)
  • Pre-tax profit: 2 093 467 (1,000 NOK)
  • Purchasing, excl. intragroup, in Norway: NOK 12.5 billion
  • Purchasing in Norway from 5,246 different suppliers
  • Purchasing from suppliers in Norway in 287 different municipalities
  • Tax payments by employees in Norway: NOK 460 million — Total tax payments: NOK 570 million
  • Tax payments to 257 different municipalities in Norway
  • 4,298 full-time equivalents in Norway
  • Generates 5,157 full-time equivalents in other industries
  • NOK 1.280 million paid by the Group and its employees in Norway in taxes and duties
  • 1,215 places in nursing homes and 7,186 children in municipal kindergartens

Area efficiency

The fish farming industry is an extremely area-efficient producer of protein. The committee established to review the quota system and economic rent within fisheries (Gullestad committee) calculated that the average size of a locality in 2010 was 36.800 m2. An average locality with eight cages can produce approx. 320.000 kg of fish. This implies 8.7 kg of protein per square metre. Norway has 90.000 square kilometres of sea waters within its maritime boundaries.

UN sustainable development goals

The UN has adopted 17 global goals for sustainable development to transform the world over the next 15 years. The new goals for sustainable development encompass the environment, economy and social development all within the same context.

  • End extreme poverty
  • Eliminate social inequality
  • Combat climate change and its impacts

All the 193 UN nations have participated in compiling the goals. Lerøy has chosen to adopt some of these 17 goals. The goals we have selected are those most relevant to our processes, but we also have other goals that are closely associated with some of the other UN goals. Internal goals are established for these areas in our underlying companies.

Our brands
The seafood pioneer
Lerøy was the first to..

Load a charter plane full of salmon bound for Japan

Did you know that Japan did not use salmon for sushi until the mid-1980s? In 1995, the first of a total thousand charter planes set off for Japan, fully loaded with Norwegian salmon, which is now one of the most sought-after products in the world. In 2017, Lerøy sent 9,000 tonnes of fresh salmon and salmon fillet and 1,250 tonnes of fresh trout to Japan. Lerøy supplies 25 out of every 100 salmon delivered to Japan. Sushi is also on trend in Norway. 

Lerøy produces more than 40,000,000 pieces of sushi every year.

Distribution of fresh seafood in Norway

In 2006, Lerøy was selected as the main supplier to NorgesGruppen and Meny. This resulted in a profitable cooperation and – with a focus on control, quality and efficient distribution – it allowed Lerøy to supply high-quality, fresh fish to an increasing number of consumers. As part of the cooperation, regional wholesalers formed a network that was named Sjømatgruppen. This network is now a nationwide supplier to the major customer groups, such as hotels, canteens and the public sector, but also to small and larger fish counters in grocery stores nationwide. This is an example of how Lerøy continuously works to provide a wide range of seafood to all consumers, and to supply top quality fish to both restaurants and the tiniest, local stores.

Fully integrated supplier of red and whitefish

With the acquisition of Norway Seafoods and Havfisk in 2016, Lerøy became a fully integrated supplier of red and whitefish. Havfisk, with ten trawlers, is the largest trawler operator in Norway, fishing mainly for cod, haddock and saithe. Lerøy Norway Seafoods has more than 130 years of experience in the whitefish industry and receives fish from 1,700 local fishermen. Their deliveries in total are equivalent to 200 million fish meals per year. Lerøy Seafood Group is therefore no longer merely the world’s second largest producer of trout and salmon but is now a seafood corporation. This affords the Group much more control of the entire value chain, from sea to plate, and a new and unique position, not just in Norway, but worldwide.

Total ban on the use of chitin inhibitors

Chitin inhibitors have been used for a number of years as a form of medication for fish in cages. These substances have been approved by Norwegian authorities and are still in use in the fish farming industry. However, the Directorate of Fisheries has laid down restrictions on the use due to suspicions that some combinations of chitin inhibitors can harm certain species during ecdysis. To date, there is no documentation to show that use is harmful, but Lerøy Seafood Group has chosen to take a precautionary approach and has therefore eliminated use of these substances.

Defrosting using radio waves

Lerøy's filleting facility in Stamsund in Lofoten is currently testing a technological innovation for fillet production. Imagine a microwave oven similar to the one most of us have at home, where you can quickly defrost or heat frozen food, so it is ready to eat. At Stamsund, they are now testing radio waves to defrost fish prior to production. The radio waves are longer and as such less intense than microwaves and can be used to defrost gutted fish without heads in blocks of 48 kg from completely frozen to a temperature of minus 2-3 degrees in just under 90 minutes. This is most probably the first time this has ever been achieved with blocks of fish. It is common knowledge that Lofoten is the home of cod. The seas around Lofoten are where the cod come every year in the winter to spawn the next generation. The winter cod season in Lofoten is from February to April, and fishing is intense during this period. However, fish processing plants require delivery of raw materials all year around. By freezing fish just hours after they have been caught, the fish remain completely fresh, and with modern defrosting technology, Stamsund can produce using fresh fish all year around.

Fish farms with ASC certificates

Lerøy Seafood Group has taken part in the development of the ASC standard since 2004 and it was the first company worldwide to achieve chain of custody for their sales, distribution and processing, which also includes smoking fish. Lerøy now makes weekly supplies of salmon with ASC certificates from Norway all year round. ASC certification is an integral part of Lerøy's business development and the Group continues to gain certification for an increasing number of facilities. The ASC salmon standard is the strictest standard for responsible fish farming and requires a much higher level of inspection than ever before. The process for certification involves an independent third party and a number of standard requirements for factors such as feed and traceability.

Packaging fresh fish in aluminium trays in Norway

In 2007, Lerøy introduced a new range of products that make it much easier to have fresh fish fillets for dinner – fresh fish in aluminium trays that can go straight into the oven. The product was naturally called “Rett i Ovnen” or “Oven ready” and was set to revolutionise consumption of salmon. This new product was so successful that Lerøy Seafood still supplies their finest salmon, cod and catfish fillets in these recyclable trays. What started out as just a good idea has now become the standard form of packaging for fresh fillets sold in Norway today. In 2017, Lerøy developed the “Til Låns” campaign together with Norsk Gjenvinning. The name of the campaign translates as “on loan”, and it showed the general public that the aluminium trays could be recycled almost perpetually if they were deposited in the recycling station for metal and glass. If all the aluminium trays used by Lerøy every year in production are recycled, they could be used to manufacture 6,000 bicycles and would provide a reduction in our ecological footprint.

Several species in one location

In 2014, Ocean Forest was established as a cooperative project with the environmental association Bellona. Ocean Forest cultivates kelp and mussels to absorb phosphorous, nitrogen and CO2 from fish in fish farms. IMTA stands for Integrated Multi-Trophic Aquaculture, which in practice means cultivating several species in one location. Ocean Forest also cultivates macroalgae in the same localities as salmon farms, and Lerøy was one of the very first companies in Norway to do so.

The success stories
Norwegian seafood is safe and delicious and has gained a high reputation worldwide – from the tiniest province in the Netherlands to the bustling cities of Japan.
Major investment in a small town
Rodé Vis in Urk in the Netherlands, a subsidiary of the Norwegian Lerøy Group, plans to open their fifth processing unit in 2018 – Lerøy Seafood Center. With their major focus on food safety and sustainability, the company is well prepared for the future.

The new facility, also located in Urk, provides 11,000 m2 extra production space and will help double annual production from 15,000 tonnes to 30,000 tonnes. There will be a lot more new technology in the new facility, and a good deal of production will be automated. – "We are increasing our focus on food safety, and this facility is a huge step for us. We are confident it will consolidate the success we have already achieved," says CEO Tjeerd Hoekstra.

"Born with fish scales on your body"

Unless you are an expert on the Netherlands, you most probably haven’t heard about Urk. This former island is a municipality in the Dutch province of Flevoland, and it became part of the mainland when the area around the island was reclaimed. Urk is home to a population of over 20,000 and it has centuries of history as a site for fishing and seafood. The locals themselves say that this is a place where you are practically «born with fish scales on your body».

Importer of Norwegian salmon

At the end of the 1980s, Urk was a natural location for a fish processing facility. The town imported Norwegian salmon from suppliers such as Lerøy, processed and smoked the fish then distributed it internationally. The result was delicate, high-end products, and the company experienced continuous growth and a substantial improvement in economy from 2000 to 2010. In 2012, the fish processing company Rodé was acquired by Lerøy Seafoods – a natural step for both companies. – This was a simple and logical choice for us. Having a partner that produces our raw materials provides us with security and continuity of supply in terms of both price and high-quality products, explains Tjeerd Hoekstra.

Aurora Salmon preferred by Japanese sushi chefs
A unique market requires a unique product. This is how Aurora Salmon was created for Japan.

For more than a decade, Lerøy has produced a completely unique product for the Japanese sushi and sashimi market. This is Aurora Salmon, a special salmon produced according to specifications established in cooperation with long-term partners in Japan. The fish are farmed only in Lerøy Aurora's localities in the region of Troms.

Swimming under the Aurora Borealis and midnight sun

Aurora Salmon are farmed in clear Arctic waters and with vast seasonal variations, comprising the dark season, the Northern Lights and the midnight sun. The fish were carefully selected by Japanese seafood experts on visits to Norway, with the aim of finding the best salmon in the world. After harvesting, the salmon are transported by Finnair in Helsinki as quickly as possible to Tokyo, Osaka and Nagoya in Japan. The total transport time from the Norwegian coast to the Japanese consumer is only 36 hours.

Perfect for sushi

Demand is substantial, and the volume has continuously increased since the product was launched. Today, 25 of every 100 salmon exported to the home of sushi come from Lerøy, and 16 of these are Aurora Salmon. The product is popular with the country’s most highly recognised sushi chefs and it has a reputation as a top-class raw ingredient.

Integrated parasite control
In 2017, the Group had zero utilisation of antibiotics and the use of medicines to treat salmon lice remains low.

Lerøy has achieved this with the implementation of the “integrated parasite control” concept. This involves a number of measures applied in rotation, preventing the salmon lice from adapting to specific measures. The measures comprise e.g. monitoring, action thresholds, structural, mechanical and biological measures and treatment.

Biological measures that work

Salmon lice have an evolutionary advantage due to their short life cycle, which makes them very adaptable. Our response to this challenge is to rotate different control measures, explains Bjarne Reinert, Director of Fish Health at Lerøy Seafood Group. He goes on to explain: – If we only apply one method at a time, the parasites are able to develop resistance. This is a common problem within parasite control. As a result, some methods lose their impact over time. The increase in capacity of medicine-free measures and the increased impact of what we refer to as biological measures, such as the use of cleaner fish, are partly behind the reduction in the use of medication in recent years. – We believe and are confident that salmon lice are best controlled by using a number of different control measures. Efficient and safe medicines will continue to play a role in a future strategy, but we work hard to ensure that the use of medicines is justifiable in terms of food safety, fish welfare, the environment, resistance and economy, confirms Bjarne Reinert.

Nationwide employment
Lerøy Seafood Group is an important contributor to social development.

Norway is the second largest seafood exporter in the world after China, and Lerøy Seafood Group is also the second largest seafood group within salmon and trout production. From our relatively small, long and narrow country, Lerøy’s products are distributed to 80 different countries worldwide – totalling 5 million seafood meals every day. At the same time, the Group continues to purchase large volumes of products, equipment and services locally, where possible. In 2015 alone, the Group’s procurement from local suppliers in Norway totalled almost NOK 12 billion, distributed across 5,269 companies in 28 different municipalities.

Ripple effects to other industries

A large company needs a lot of employees – more specifically, 4,000 employees working for our companies in more than 60 municipalities. Every full-time equivalent in the fishery and fish farming industry generates 1.1 full-time equivalent in another industry. These may be jobs within transport, building and construction, local tradesmen and research.

Tax payments of NOK 500 million

In 2016, Lerøy's employees paid almost NOK 500 million in tax to municipalities and the Government, and the Group paid a total of than NOK 500 million in tax and employer’s contribution. This was also the year when Lerøy Seafood Group acquired Havfisk ASA and Norway Seafoods Group AS, thereby expanding activities into whitefish and achieving a position as a fully integrated corporation with control of the entire value chain.

Developing new and improved fish feed
New feed allows for more sustainable fish farming
Lerøy is taking part in the development of a new and improved fish feed in order to ensure sustainable production of salmon and trout. The fish oil previously used is now being partly replaced by microalgae that has a high Omega 3 content.
Part of the fish oil in feed has now been replaced with microalgae with a high Omega 3 content in order to ensure sustainable production of salmon and trout.

This reduces the volume of fish oil used in feed for salmon and trout, while retaining the high content of Omega 3 DHA – an ingredient both the fish and us as consumers need in adequate volumes. EPA and DHA are marine essential fatty acids not produced by the body but that have to be taken as food. EPA is of particular importance for the immune system and DHA for the brain.

Lerøy a pioneer 
Wild salmon and trout eat a lot of fish, and the feed used for fish farming contains fish oil. Today, fish oil is the only natural source of the important EPA and DHA fatty acids, but fish oil supplies are expected to decrease in the future.

Lerøy is therefore pioneering efforts to find new methods of ensuring that farmed salmon and trout obtain a sufficient amount of EPA and DHA. This is achieved by replacing part of the fish oil used in the feed with a type of microalgae that also has a high content of Omega 3 DHA.

The use of these algae increases the ratio of Omega 3 DHA in seafood, provides for even more sustainable fish farming and reduces the use of wild caught fish.

Need for innovation
The new feed series has been developed in close cooperation with one of Lerøy's feed manufacturers and the actual manufacturer of the microalgae. Lerøy is the first fish farming company to utilise such large volumes of microalgae. This is a clear indication of Lerøy's commitment to sustainability, in terms of both management of the wild fish stocks utilised to produce fish oil and in relation to fish health and human health.

Improved fish feed

  • Lerøy has developed a new and more sustainable fish feed in close cooperation with partners.
  • The fish oil previously used is now being partly replaced by microalgae that has a high Omega 3 content.
  • In 2017, the feed was used for production of salmon weighing more than one kilogram.
  • Introducing this algae to feed has increased the volume of Omega 3 in seafood.
We know that our customers worldwide are looking for healthy products that are produced sustainably. Lerøy has been at the forefront when it comes to new opportunities for sustainable ingredients, and we need new raw materials if we are to meet demand for healthy seafood.
Henning Beltestad, CEO Lerøy Seafood Group

– We know that our customers worldwide are looking for healthy products that are produced sustainably. It is important for us to be at the forefront when it comes to new opportunities for sustainable ingredients, and we need new raw materials if we are to meet demand for healthy seafood, explains Henning Beltestad, CEO of Lerøy Seafood Group.

This measure also helps reduce the Group's reliance on marine ingredients for feed.

Cultivated on land
The algae in the new fish feed used by Lerøy is produced in São Paulo in Brazil. They are based on a species of algae discovered in the mangrove swamps in Florida. Although the species can be found in marine environments, it is now cultivated on land in closed fermentation tanks similar to those used to ferment beer.

Since September 2016, Lerøy's salmon have consumed more than 40,000 tonnes of feed containing the new microalgae. With effect from May 2017, the feed was implemented for all production of salmon weighing more than one kilogram.

Preline - fish farm designed for the future
The purpose of a self-contained, floating fish farm is to optimise conditions for the fish during their first months in the sea. This provides better conditions for growth, improved welfare and protection against disease and salmon lice.
The purpose of the self-contained Preline fish farm is to produce post-smolt – a larger and stronger smolt – that is released to sea in open cages at a weight of between 0.5 and 1 kg.

New developments in fish farming are taking place in Sagen, Hordaland. This is the site of the first Preline facility, which is already reporting good results. This means the start of fish farms with even better conditions for growth, good protection against disease and salmon lice – and no accidental release. The idea and the philosophy are to provide the smolt – the young fish moved from fresh water to a marine environment – conditions that are as perfect as possible during the first five to six months in the sea.

The results provided by the prototype are so good that a new facility double the size of the first one is already being planned.

The new technology involved will also allow use of areas currently not suited for fish farming and make these valuable areas for producing food at sea.

– The principle and concept have proved very successful. The experience we have gained with the prototype established in 2015 is that both the idea behind the biological factors and the technological equipment both work, explains Harald Sveier, Chairmain of the board for the Preline project and Technical Director at Lerøy.

In practice, this means that Lerøy has had a steep learning curve. A lot of the technical equipment on the prototype has been modified and upgraded during the test period. Harald Sveier also explains that experience shows good fish welfare and low mortality.

– The fish that start the cycle in the Preline facility have good growth and have become very strong by the time they are moved to ordinary cages for continued growth. The number of lice treatments for this fish, after they have been transferred to open cages, is down by a total of 90 percent. We are very happy with this figure, confirms Harald Sveier, underlining that this demonstrates the importance of farming fish that are as robust as possible.

Optimised conditions
The normal procedure today is to have smolt in open cages, but this is difficult as we have no control over weather conditions, tidal flow, the phases of the moon and temperature. These difficulties are practically eliminated in a Preline facility, where water flow and water quality are managed and controlled. By establishing a constant flow of water, the fish are constantly in movement and it has now been scientifically documented that physical exercise results in a more viable and stronger fish.

Action against salmon lice

  • Experience shows that salmon from a Pipefarm facility are stronger and less exposed to disease even after they have been moved from the self-contained farm. This is evident as there is practically no requirement for medication or mechanical treatment for fish after they have been released from a Pipefarm.
  • The extent of medication has been low for several years and remains so. Lerøy has achieved this via a strategy based on the principles of integrated parasite control. This involves a number of measures applied in rotation, not allowing the salmon lice the time to adapt to specific measures. The measures comprise e.g. monitoring, action limits, structural, mechanical and biological measures and treatment.
The fish that start the cycle in the Preline facility have good growth and have become very strong by the time they are moved to ordinary cages for continued growth. The number of lice treatments for this fish, after they have been transferred to open cages, is down by 90 percent.
HARALD SVEIER, CHAIRMAN OF THE BOARD FOR THE PRELINE PROJECT AND TECHNICAL DIRECTOR IN LERØY

The Preline facility, which was launched in Samnanger municipality in Hordaland, is designed as an oval, floating pipe with a volume of 2,000 m3. The fish are placed in the pipe, which has a constant water flow.

In a traditional fish farm, salmon spend approximately 15 months in the sea – from smolt stage to harvest. With Preline, the fish spend six of these 15 months in a self-contained facility, thereby providing conditions for salmon that are optimal during the most critical months of their lives. At the same time, this reduces production time in open cages from 15 to eight months. Experience shows that salmon that start their lives in the sea in a self-contained fish farm such as Preline grow stronger and are less exposed to disease than fish in open cages.

Increased fish welfare
"When compared with traditional fish farms, we have much more control over both the environment and fish health, as the fish have better protection against parasites, bacteria and viruses. With the Preline facility, we pump water up from depths of 30–35 metres, and there are fewer sources of infection in this water when compared with surface water,” explains Harald Sveier.

In addition, the design of the facility provides significant reductions in the risk of accidental release when compared with a traditional marine cage. The risk of accidental release is therefore expected to fall and fish welfare to improve with the use of Preline. By the end of 2017, a total of six generations had been released to the facility.

When compared with traditional fish farms, we have much more control over both the environment and fish health, as the fish have better protection against parasites, bacteria and viruses.
HARALD SVEIER

New prototype under development
Work is now under way to develop prototype number two based on the experience gained.

"This will be a new facility double the size of the existing one. This time, we have recruited even more technical expertise, both internal and external, to solve the technological challenges we have encountered so far."

Harald Sveier explains that Lerøy has been working on the development of the new prototype for a while now, and has applied for development licences based on the future technology developed under the new project, known as Pipefarm.

"We aim to get started on testing the next stage of this technology in 2018," confirms Harald Sveier.

Food safety
Food safety with marine produce
We work constantly to ´quality assure´ our products that are supplied to shops and to make sure that consumers can trace the seafood they eat.
As a fully integrated seafood supplier, Lerøy can control and quality assure all its products throughout the value chain. As such, Lerøy can comply with the ever-increasing requirements on the seafood market for traceability, food safety, product quality, cost efficiency, sustainability and continuous supply.

This strategy is applied to the entire value chain ensuring food safety for our consumers. As a fully integrated seafood supplier, we can maintain control of and ´quality assure our products throughout the value chain. This allows Lerøy to comply with the ever-increasing requirements on the seafood market for traceability, food safety, product quality, cost efficiency, sustainability and continuous supply.

Traceability
All of Lerøy’s products can be traced back to origin, so you can follow the entire process from the boat and cage and up to the finished product you have picked in the store. It is our goal to provide consumers with the best possible information and full openness regarding our salmon production, and this has resulted in several measures, including a website launched together with NorgesGruppen and called gladlaks. no. Consumers can use this website (in Norwegian) to search for the salmon or other fish they have purchased and see where it comes from, at the same time as learning more about our product range.

Fish feed
We place requirements on our fish feed suppliers to ensure that the raw materials utilised in the feed can be traced and are managed properly according to established quotas. This means that the ingredients in our feed are ethically caught or harvested, within the legal limits based on sustainability. The marine raw ingredients must have IFFO-standard certification (International Fishmeal and Fishoil Organisation) or MSC certification (Marine Stewardship Council) and these certification schemes must contain guidelines that meet the requirements for sustainability including in relation to small pelagic fisheries. The use of cuttings shall be prioritised as far as possible.

Moreover, palm oil shall not be used in our fish feed. Any soya-based raw materials require traceability and certification by RTRS (Round Table for Responsible Soy) or similar.

Food safety 
Thanks to many years of experience, we have built up a quality system that comprises routines and procedures to ensure safe and good products with top quality. Lerøy requires high standards, carries out regular analyses and ensures its activities are audited at least 250 to 300 times a year.

We perform annual emergency preparedness and recall tests as part of our food safety strategy. The Lerøy Group has also achieved numerous different certificates, such as ISO 14001, Global Gap, ASC, MSC, Krav/Debio and BRC.

The future of fish farming
With the growing population worldwide, we need to increase food production for the future.

The UN’s food and agricultural organisation (FAO) estimates that by 2050 the global population will be approximately nine billion. This implies that we have to increase food production by around 30 percent. Compared with other animal proteins, fish does not require a lot of feed to grow by one kilogram, fish farming does not take up a lot of space and fish are adaptable animals. An increase in seafood production is therefore of high relevance in the efforts to feed the global population in the future.

Facts 
CO2 FOOTPRINT IN FOOD - volume of greenhouse gases in fresh food (kg CO2-EQ/kg)

  • Beef 26.61 kg Meat from farm animals, such as beef and lamb, are the most discharge-intensive types of food we eat because of the methane gases they produce.
  • Eggs 5.77 kg
  • Fish (Average of all species) 3.49 kg
  • Fruit and vegetables (heated greenhouse) 2.13 kg
Ocean forest
Cultivating large volumes of kelp to improve the environment
The unique components in kelp may be a future source of energy, both for humans, animals and vehicles.
Harald Sveier (on the left), Managing Director of Ocean Forest AS, and Anders Karlsson-Drangsholt, senior consultant for fish farming in Bellona, on board to harvest kelp. The goal for next year is to multiply the harvest volume by almost six, from 17 tonnes in 2016 to 100 tonnes.

In October 2016, ropes measuring 13,200 metres and carrying kelp seeds were set out near to Lerøy's salmon cages in the island municipality of Austevoll in Hordaland. During the winter, these seeds grew to lengths of one and a half metres, and 17 tonnes of kelp were harvested in 2016. The harvest volume increased to 40 tonnes in 2017. The target for 2018 is to more than double this figure, i.e. 100 tonnes.

Cooperation with Bellona
For many years, Lerøy has enjoyed a close cooperation with Bellona. Plans were developed in 2015 for integrated fish farming, and Ocean Forest was founded. Integrated fish farming, also known as multitrophic aquaculture, implies co-cultivation of several species from different parts of the food chain. Ocean Forest cultivates mussels and large volumes of kelp in what resembles a rain forest under the water. The project aims to use those products we have in excess in order to produce those products of which we need more. The world needs more biomass as raw materials for food and renewable energy to cater for a growing population.

Diverse utilisation
The kelp cultivated for now in Hordaland can be used fresh, but can also be dried – almost like chips, fried, grilled and boiled. The kelp can be used in oil, stocks and marinades, and has a flavour that goes particularly well with fish. It is also excellent flavouring, as kelp spices. 

Kelp may also take on a more important role within an industry that has been so important for the Norwegian economy. In fact, sugar kelp contains as much as 50 percent carbohydrates, an excellent raw material for biogas, biodiesel and bioenergy.

– This is a very sustainable source of energy that is readily available when we need it. With that in mind, we can claim that the market for kelp is infinite, confirms Managing Director of Ocean Forest, Harald Sveier.

Negative carbon emissions are an ambitious goal, but still achievable
HARALD SVEIER, MANAGING DIRECTOR OF OCEAN FOREST AS

What started out as a project in cooperation with Bellona has developed into an independent company that cultivates kelp and mussels to absorb phosphorus, nitrogen and CO2 from fish swimming in cages.

– These are resources that are not utilised. In discussions with Bellona, we realised how we could capture these resources, integrate them into the production cycle and make good use of them. Kelp absorbs large volumes of CO2 and we can now confirm that what we are doing is effective, states Harald Sveier.

Three assignments
The potential for kelp to become a new food trend in the future is not the only reason to establish and continue the project. The project itself is based on three assignments laid down by the Board of Directors:

  1. Firstly, to capture phosphorus, nitrogen and CO2 released by fish in fish farms. This is achieved by cultivating sugar kelp and mussels on ropes surrounding and underneath the cages. These species live on phosphorus and nitrogen, and kelp also absorbs large volumes of CO2.
  2. Secondly, to create raw materials that are edible for humans and animals. Kelp can be consumed in a number of ways, as can mussels. The soft part of the mussels can be used as a fishmeal replacement in fish feed, thus becoming a natural part of the production cycle. These are organisms that are close to the bottom of the food chain – implying that they only need water and sunlight to survive, and do not require either feed or chemicals.
  3. Thirdly, to establish new species within aquaculture. This must be an industrial and economically sustainable project, meaning that the company must be able to generate revenue from the production of mussels and kelp, and their utilisation for animal feed, in the future.

Facts about Ocean forest

  • A cooperation project between Lerøy and Bellona, where mussels and kelp are cultivated alongside fish farms to improve the environment.
  • In 2016, the volume harvested was 17 tonnes of kelp. This figure increased to 40 tonnes in 2017. The target for 2018 is to more than double this figure, i.e. 100 tonnes.
  • If kelp cultivation is to become a viable industry, Ocean Forest will have to cultivate minimum 1,000 tonnes of kelp per year.
  • One major goal in the long term is to reduce carbon emissions. In other words, the emissions of carbon, principally coming from boats and fish feed, shall be zero or negative.
Anders Karlsson-Drangsholt from Bellona pulls bags packed with sweet tangle over the deck during the harvest in Austevoll in April 2017.

Ambitious goals for the future
One major goal in the long term is to reduce carbon emissions. In other words, the emissions of carbon, principally coming from boats and fish feed, shall be zero or negative.

– We are committed to making our industry as sustainable as possible, while at the same time aiming to gain a profit. Ocean Forest is part of a larger objective to ensure that fish farming has the smallest possible eco-footprint, explains Harald Sveier, adding:

– Negative carbon emissions are an ambitious goal, but still achievable.

Increased consumption of seafood
Simpler to choose healthy produce when buying food
As a seafood producer with a focus on quality, Lerøy aims to help improve our diets. The company has therefore signed an agreement with the Norwegian Ministry of Health and Care Services that will make it much simpler for consumers to make healthy choices when buying food.
One important target area for Lerøy is nutritional dishes that require little or no preparation. The objective of the agreement is to improve public health and prevent lifestyle-related diseases, to be achieved by making healthy foods easily available and helping consumers make healthy choices when buying food.

The objective of the agreement is to improve public health and prevent lifestyle-related diseases, to be achieved by making healthy foods easily available and helping consumers make healthy choices when buying food.

Good health is sustainable and important for a healthy quality of life, and both sustainability and health are essential for Lerøy. The seafood producer has therefore signed an agreement with the Ministry of Health and Care Services to make the food choices of consumers nationwide much healthier.

Cooperation to promote healthier choices
The agreement comprises specific goals that are intended to help Norwegians improve their diet.

– The agreement will play an important role in reducing the intake of salt, sugar and saturated fats by Norwegians. Danish studies, for example, have shown that a reduced intake of salt reduces the rate of cardiovascular diseases, writes the Ministry of Health and Care Services on their website.

The objectives stated for the agreement are the most ambitious in the EU and put Norway in a leading position in terms of public health. When the cooperation agreement was signed in September 2017, Minister of Health Bent Høie stated the following:

– These agreements show that Norway has a committed industry that assumes a clearly defined social responsibility.

More seafood, fruit, vegetables and wholemeal products
One of the objectives of the agreement is to influence consumers to eat more more seafood, fruit, vegetables and wholemeal products. Lerøy specialises in seafood, and their expertise is perfect for this agreement. The Ministry of Health and Care Services recommends eating fish as part of a meal two to three times a week, and Lerøy aims to lead the way in showing how easy this is. The advantages of eating seafood as an important source of several nutrients, such as Omega 3 fatty acids, iodine, selenium and vitamin D, are fully documented. Fatty fish can in particular can help prevent cardiovascular disease.

Facts on the agreement (letter of intent):

  • The objective is to encourage the nationwide population to eat 20 percent more fruit and berries, vegetables, wholemeal products and seafood, and to reduce their daily intake of sugar, salt and saturated fats.
  • The agreement is a cooperative effort between the Ministry of Health and Care Services and companies in the food industry, including Lerøy.
  • On 26 September 2017, a number of food producers and wholesalers met with the Minister of Climate and Environment Vidar Helgesen to sign agreements committing the parties to contribute towards an increased intake of healthier foods.
It is more important now than ever before for us to be able to provide pure and nutritional quality food.
ANNE HILDE MIDTTVEIT, HEAD OF QUALITY AND CSR AT LERØY SEAFOOD GROUP

Healthier ready-made meals
One important target area for Lerøy is nutritional dishes that require little or no preparation. Such ready- made meals tend to have high levels of salt, sugar and fat. Lerøy has developed a number of nutritional and easy alternatives to ready-made meals, including products ready for the oven and poke in cups. By offering healthy alternatives to fast food, such as the poke fish salad, Lerøy makes is easier for consumers to reduce their intake of unhealthy foods.

– It is more important now than ever before for us to be able to provide pure and nutritional quality food, confirms the Head of Quality and CSR at Lerøy Seafood, Anne Hilde Midttveit.

A focus on seasonal raw ingredients, increased awareness of the use of ingredients and nutritional ready-made meals are important keywords. By investing in quality and user- friendly solutions, Lerøy shall help improve public health.

The agreement will play an important role in reducing the intake of salt, sugar and saturated fats by Norwegians.
THE MINISTRY OF HEALTH AND CARE SERVICES