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.
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.
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.
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!