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Sustainable growth via innovation
Lerøy's value chain for farming is increasingly modern, with improvements to eco-friendliness and resource efficiency.

From egg to packaged fillet, without being touched by human hands – the end goal for Lerøy's value chain within aquaculture. This creates increased value for the Group, its employees, host municipalities and Norway as a whole. 

“Lerøy makes substantial investments throughout the value chain to achieve its goal for increased efficiency of what is already the world’s most eco-efficient production of meat or fish. Sustainable growth via innovation and technological developments, in other words,” says Henning Beltestad, CEO of Lerøy Seafood Group. 

 

Lerøy makes substantial investments throughout the value chain to achieve its goal for increased efficiency of what is already the world’s most eco-efficient production of meat or fish. Sustainable growth via innovation and technological developments, in other words.
Henning Beltestad, CEO of Lerøy Seafood Group.

Growing worldmarket

In recent years, Lerøy has invested billions of Norwegian kroner in the development of what is known as RAS facilities. RAS facilities for salmon have been built in Laksefjord in Lebesby municipality in Finnmark, Belsvik in Hemne municipality in Trøndelag and Kjærelva in Fitjar municipality in Hordaland. Lerøy also has an RAS facility for trout in Bjørsvik in Radøy municipality in Hordaland. 

RAS facilities produce smolt that are subsequently released to open cages in the sea to grow in to large salmon or trout, ready for sale to an increasingly large global market. 

RAS facilities differ from the former flow-through facilities in several ways. An RAS facility is a recycling plant designed to re-use 98-99% of fresh water. This naturally provides dramatic reductions in fresh water consumption when compared with a flow-through facility. 

Moreover, the RAS facilities are also purification plants that remove particles and have biological filters. 

Lerøy now plans to further modernise this part of the value chain. The strategy at Kjærelva is to produce large volumes of large smolt, i.e. so the fish to be released will weigh more than 500 grams, compared with the current most common weight of 80-100 grams. 

Production with the first eggs at the new RAS facility in Kjærelva started in 2018. This year, 25% of the smolt released by Lerøy Sjøtroll/Lerøy Vest will be large smolt. The goal is to increase this ratio further, up to 40-50% by 2021. There are also plans to extend the RAS facility in Belsvik in the near future for production of large smolt. Work on extending the plant in Laksefjord is already under way. 

 

More robust fish

Lerøy has accumulated positive experience with the release of large smolt from its “Preline” pilot project in Samnanger, Hordaland. 

“Experience has shown that we can produce fish that are more robust when it comes to the time for release to sea cages. This allows us to harvest fish that have not been subject to delousing or that have had very few treatments,” explains EVP for Farming in Lerøy Seafood Group, Stig Nilsen. 

The investments in RAS technology not only allow better utilisation of fresh water and energy, they also provide significant, positive contributions to the next part of the value chain. If the goal is achieved for stronger and more robust fish, this will also provide reductions in lice, with fewer lice treatments and less disease. Moreover, the fish spend less time in the sea, with reductions in the discharge of nutrient salts and feed waste.

This takes us to the next stage of modernising the value chain, as there have been major changes in feeding in cages (to find out more about developments in feed, see separate article). Until recently, feeding was carried out locally at every one of Lerøy’s 83 active localities. Lerøy is now in the process of coordinating feeding with growth centres, where feeding at several localities is simultaneously remote controlled. Feed operators share an office, allowing for the development of a good professional environment where specialised skills related to feeding can develop. 

“When operators share an office, they can exchange experience and develop these growth centres in collaboration,” explains Stig Nilsen. Communications are also simpler compared to having 83 different localities all having to communicate separately.

 

A hightech industry

These growth centres look like they belong to a modern high-tech industry. The operators have a bank of monitors on which they can follow feeding with a live transmission of high-resolution images. The system provides live images and sensor readings, measurements of salt and oxygen content, temperature and feed intake etc.   

This provides a higher feed factor, or in other words, more efficient feeding, which in turn helps reduce feed waste. The development is very much in line with Lerøy’s strategy for increased production and improved control of feeding.

“60% of our production costs comprise feed. Our operators at these growth centres help ensure both optimal fish health, lower local eco-footprint, lower climate footprint and improved earnings for Lerøy,” confirms Stig Nilsen.

60% of our production costs comprise feed. Our operators at these growth centres help ensure both optimal fish health, lower local eco-footprint, lower climate footprint and improved earnings for Lerøy.
Stig Nilsen, COO Farming

World's most modern

The next stage of the journey for salmon in Lerøy's value chain is from fish farm to processing plant. At the new slaughtering facility on Jøsnøya island in Hitra, the fish swim directly from the well boat into the facility, where they are anaesthetised. They are then transported through what is probably the world's most modern facility of its kind. This is the very peak of high technology. The facility has capacity to produce 70,000 tonnes of fish fillet per year with one shift. 

With such modern technology and high volume of fillet production, Lerøy has been able to significantly reduce transport. From Jøsnøya alone, the number of trucks transporting fish to the market can be reduced substantially when the trucks are packed full of fish fillets rather than whole fish. All residual raw materials are utilised, so that the facility makes use of 100% of every fish.

From the moment the fish enter the facility until they shortly after leave as packaged fillets, they have been through a process including slaughter, sorting, gutting, 3D scanning, filleting and removing bones etc. The fish is then sent directly to transport, ready for customers worldwide. 

The use of modern technology allows for modernisation of the value chain, so that no hands touch the fish from the egg stage to finished fillet.

“As such, factors relating to fish health, the environment and climate are far improved throughout the entire journey from the RAS facility, via the fish farm and to the factory. This is truly sustainable growth via innovation,” claims Henning Beltestad.

Value creation and spin-off effects
Increased production and value creation in Norway are core elements of Lerøy Seafood Group's strategy. The main goal is to achieve a higher rate of processing, not least in Norway. Major investments have a huge spin-off effect in communities along the coast.

Lerøy Seafood Group aims to have as much production as possible in Norway, using Norwegian raw materials. The Group has therefore invested billions of Norwegian kroner in boosting capacity, ensuring top quality, extending its product range and securing distribution to customers both at home and abroad. These investments have comprised new buildings, reconstruction, expansion or rehabilitation of processing and landing facilities from the very north in Finnmark to south-east in Kalbakken in Oslo. 

“It is our goal to increase the level of processing. We currently process around 40% of the salmon and trout we produce, and aim to increase this figure,” confirms CEO of Lerøy Seafood Group, Henning Beltestad.

One excellent example of this goal is the new facility for processing salmon on Jøsnøya island in Hitra, where production started in 2018.  The goal for the new facility is for 70% of the fish distributed to be packaged fillets. 

 

New construction and modernization

Lerøy’s Norwegian facilities produce a full range of products, from fillets to consumer packs for both the domestic market and export. Lerøy has processing plants for salmon in all three regions; Aurora (Troms and Finnmark), Central Norway (Trøndelag) and West Norway (Hordaland). Sjømathuset in Oslo and Sjømatgruppen supply fresh seafood to all the shops in the Norgesgruppen retail chain, and to restaurants and canteens throughout Norway.

In recent years, Lerøy Norway Seafoods has invested in the reconstruction of a plant for the production of ready-to-eat products in Stamsund. The facility in Melbu has been modernised and now has extended capacity. A new fish landing station has also been built in Skårvågen. The facility in Rypefjord recently re-opened (for production of salted fish) after it closed in 2014. A new landing station has been built in Berlevåg and capacity in Båtsfjord has increased. The Group also has a new crab production line in Kjøllefjord. 

Lerøy's plant in Sogn og Fjordane produces Norwegian fish products using Norwegian fish for the Norwegian market. Just this year, Lerøy moved production of one of its products back from Denmark to Norway. Today, eight of 11 Norway Seafoods products traded in Norway are produced in Norway. We want to improve on this. 

Lerøy Seafood Group has trawling quotas via the trawlers owned by Havfisk, and these mainly deliver raw materials for production in Norway. 

“More than 50% of cod catches and just less than 50% of saithe catches delivered by our trawlers are processed in our own plants or sent to other processing plants in Norway,” confirms Webjørn Barstad, EVP Wild Catch and Whitefish in Lerøy Seafood Group. 

The main share of Havfisk's catches is processed in Norway. The minor share not processed in Norway comprises small fish that are difficult to produce profitably in Norway. Lerøy is the largest purchaser of fish from the Norwegian coastal fleet. Havfisk is also the largest supplier of shrimp to Norwegian facilities. 

“In reality, we process almost all our cod in Norway,” confirms Webjørn Barstad. The fish delivered by the trawlers supplements the deliveries from the coastal fleet – in other words, during those periods of the year when the coastal fleet has a low volume of deliveries due to seasonal landing trends.

“The process of industrial development requires patience, a long-term perspective and considerable investments. At Lerøy, we like to say that we view development of our business from an eternal perspective,” explains CEO Henning Beltestad.

 

Important actors

Lerøy's comprehensive and wide-ranging operations create major value and significant spin-off effects. The Group has more than 4,600 employees, of which 3,300 work in Norway. Every full-time equivalent in the seafood industry generates around 1.1 new, directly related full-time equivalent in other industries. One average large aquaculture locality in operation individually contributes 42 full-time equivalents in Norway. As such, Lerøy plays a substantial and important role in a number of local communities along the coast of Norway.  

Every full-time equivalent in the seafood industry generates around 1.1 new, directly related full-time equivalent in other industries. One average large aquaculture locality in operation individually contributes 42 full-time equivalents in Norway.

Thanks to the Group's strategy to focus on local purchases of goods and services, these local spin-off effects are further enhanced. In 2018, Lerøy purchased goods and services from Norwegian suppliers worth close to NOK 17 billion, across 257 municipalities. Tax and duty payments made by the Group and its employees totalled NOK 1.7 billion. 

Furthermore, the municipalities and county councils where Lerøy is located received more than NOK 1.1 billion from Havbruksfondet (Aquaculture fund) in the autumn of 2018 (NOK 834 million to the municipalities and NOK 229 million to the county councils), of which more than NOK 200 million came from Lerøy's operations. 

“The Group views its operations as local with a global perspective. The Group aims to be an enterprise with local roots in the locations where it operates, thereby contributing to all our local communities,” confirms CEO Henning Beltestad.

Top sustainability score
When the world’s first sustainability index for protein producers (meat, seafood and dairy produce) was introduced in 2018, Lerøy and other Norwegian fish farming companies received a top score. Seafood is a winning product for the environment.

“We are delighted to be at the top of this index. It is proof that seafood and fish farming far outdo other forms of food production,” says Anne Hilde Midttveit, sustainability supervisor for Lerøy Seafood Group.   

The international Coller FAIRR Protein Producer Index was developed by Farm Animal Investment Risk and Return (FAIRR). The index has been developed for a global network of investors who combined represent investment capital of approximately NOK 120 trillion. 

The index is a comprehensive assessment of the world’s 60 largest listed protein producers based on eight sustainability indicators, with each divided into different risk factors. The nine indicators are: 

  • Greenhouse gas emissions
  • Deforestation and biodiversity loss
  • Water scarcity and use
  • Waste and pollution
  • Antibiotics
  • Animal welfare
  • Working conditions
  • Food safety

The companies are listed on the index according to their total score for sustainable protein production. The purpose of the index is to provide investors worldwide with information on the companies and how they factor in sustainability in different areas, in turn demonstrating the financial risk involved in investing in the different companies.  

All 60 companies assessed are allocated a score as an investment object on a scale from low risk, through medium risk to high risk. Only five companies are classified as “low risk”. These five companies are at the top of the index as the most sustainable. Four of these are fish farming companies and three are Norwegian. At the very top are Lerøy and Mowi. 

“Our top score on the Coller FAIRR index is obviously a major acknowledgement of Lerøy, but primarily of Norwegian and Nordic fish farming,” claims Anne Hilde Midttveit. 

If you look at the climate footprint left behind by one kilogram of salmon flesh, compared with other types of meat, salmon and other fish species clearly come out on top. Then you have factors such as land use, energy consumption, the so-called feed factor (how much feed is required to produce one kilogram of meat), how much of the animal we can eat etc. Fish is the winning protein in all these areas. 

In other words, fish farming companies have every opportunity to produce food with low greenhouse gas emissions. Despite this, the industry continues to strive towards further minimising its climate footprint. Lerøy has made good progress on the work to introduce electric feed barges. More than 60 percent of the Group's barges already operate on shore power. It will not be long now before every barge operated by Lerøy will run on shore power or a hybrid system. 

“This move alone will reduce Lerøy’s emissions by 40,000 tonnes of CO2 equivalents. That's the same as the emissions from 20,000 cars running on fossil fuels, or two thirds of traffic in Tromsø,” confirms Anne Hilde Midttveit. 

Another example is Lerøy Midt’s new facility in Hitra, which opened in 2018. With time, the aim is for 70 percent of fish produced at the facility to be packaged fillets. Fillets take up less space than whole fish, allowing for a reduction in the number of trucks required for transport. The total reduction in the number of trucks per year transporting produce from Hitra is 1,200. Based on international standard figures for emissions from road transport, this represents a reduction of 14,500 tonnes of CO2e, or the emissions from 7,250 cars. 

One project often highlighted is Ocean Forest, a company founded by Lerøy in collaboration with Bellona. Ocean Forest cultivates seaweed and mussels for a number of purposes: Firstly, to create new feed ingredients, which you can read about in a separate article. Secondly, to create a market for seaweed as food for humans; and thirdly, because the seaweed sweet tangle absorbs emissions from fish farms. 

Fish farm emissions principally comprise nutrient salts (nitrogen and phosphor) and CO2. These are resources that are not utilised. The seaweed absorbs the CO2, phosphor and nitrogen. Sweet tangle has a high content of CO2, as much as 50%. At the same time, seaweed farming requires very little land use, no fresh water and no fertilisation. 

Lerøy works continuously throughout the value chain to improve sustainability in many different ways. 

“These include improvements to efficiency, reducing food waste, improving exploitation of residual raw materials, reducing plastic consumption, minimising our CO2 footprint, reducing our impact on local environments and many other areas. These are obviously all in line with our vision to be the world’s leading and most profitable global supplier of sustainable, high-quality seafood,” confirms Anne Hilde Midttveit. 

Creating new feedingredients

One project often highlighted is Ocean Forest, a company founded by Lerøy in collaboration with Bellona. Ocean Forest cultivates seaweed and mussels for a number of purposes: Firstly, to create new feed ingredients, which you can read about in a separate article. Secondly, to create a market for seaweed as food for humans; and thirdly, because the seaweed sweet tangle absorbs emissions from fish farms. 

Fish farm emissions principally comprise nutrient salts (nitrogen and phosphor) and CO2. These are resources that are not utilised. The seaweed absorbs the CO2, phosphor and nitrogen. Sweet tangle has a high content of CO2, as much as 50%. At the same time, seaweed farming requires very little land use, no fresh water and no fertilisation. 

Lerøy works continuously throughout the value chain to improve sustainability in many different ways. 

“These include improvements to efficiency, reducing food waste, improving exploitation of residual raw materials, reducing plastic consumption, minimising our CO2 footprint, reducing our impact on local environments and many other areas. These are obviously all in line with our vision to be the world’s leading and most profitable global supplier of sustainable, high-quality seafood,” confirms Anne Hilde Midttveit.

Lerøy works continuously throughout the value chain to improve sustainability in many different ways.