For Lerøy Seafood Group as a corporation, maintaining a constant focus on areas where we have the greatest influence in terms of sustainability is essential. Based on a critical evaluation of the value chain and our processes, we have concluded that we currently have the greatest influence within our work on the various areas related to our fisheries and fish-farming activities. A major share of our efforts related to the environment and sustainability will therefore focus on these areas.The management at different levels in the organization have functional descriptions that contain different goals, also for sustainability. Goal achievement contributes to the payment of bonuses.
The different sizes of the images in the value chain to the right represent how we prioritise work on sustainability within the different parts of the value chain.
A materiality assessment was performed in 2015, involving interviews of in-house and external stakeholders. The assessment concluded that our sustainability reporting should focus on five main areas: product, employees, environment, society and value chain. These areas will therefore receive particular focus.
Lerøy Seafood Group believes that aquaculture activities must be conducted with an “eternal perspective” as a condition for exploitation of coastal resources. The Group works hard to constantly improve the interaction between fish farming and the environment, aiming to generate positive and lasting environmental benefits. We work continuously to reduce our emissions to the environment, especially our emissions that effect the climate. Every company within The Group work to reduce their emissions.
The Group’s environmental vision – “Take action today for a difference tomorrow” – is a clear signal from every employee that every day we will be pushing for improvements to benefit the environment, aquaculture and our coastal communities.
There are five main elements to the Group’s environmental work within fish-farming activities:
Environmental targets have been established for the following indicators:
In addition, all our production units have their own targets for:
The company has a general strategy for fighting salmon lice, based on the principle of “integrated pest management”, i.e. the implementation of a number of measures to prevent and fight salmon lice, where treatment with medication is the last resort.
The Group’s RD&I work related to salmon lice takes four different approaches:
The first three methods are preventive, while the fourth involves treating salmon infected with lice. Lerøy uses all four methods, and has applied for a specific R&D licence to test “packages” of different measures at full scale according to the principle of “integrated pest management”. The work to prevent salmon lice and develop successful methods for non-medicinal delousing is a central element in our work on fish health. Salmon lice still represent one of the major biological obstacles to further development of the fish-farming industry, and activities involving management and control of salmon lice represent a substantial cost driver and have an impact on fish health and welfare.
The Group's salmon lice strategy is sound and shall provide control by means of permanently effective measures, a focus on individual cages at the highest aggregate level and early intervention in situations where the preventive efforts are not sufficiently effective.
Prevent infection regionally
Since 2011, Lerøy Seafood Group has chosen to regionalise the value chain for its own fish-farming production, from release of roe to slaughter, in order to prevent undesired infection by known and unknown agents. As a result, the Group no longer moves live fish by sea between its three fish-farming regions: West Norway, Central Norway and North Norway. This implies major costs for Lerøy in terms of developing regional capacity and ensuring biosafety. We are confident that other enterprises in the industry will recognise the value of introducing similar in-house regulations.
The Group cooperates with other enterprises and research groups to contribute actively towards establishing new knowledge and new tools with which to fight salmon lice. New knowledge and new tools are implemented as they emerge and will form part of the Group's future lice strategy alongside existing measures. Chitin inhibitors are a group of delousing agents used in Norway and abroad to fight salmon lice. At present, it is suspected that chitin inhibitors may cause damage to certain species during ecdysis. The severity of this problem has not, however, been documented, making it difficult to reach a conclusion on the use of chitin inhibitors. Chitin inhibitors have been approved by Norwegian authorities for use to combat salmon lice, but Lerøy Seafood Group has decided to take a precautionary approach. Chitin inhibitors shall therefore not be used unless required due to resistance problems. Special approval is required for their use.
Since 2011, the Group has utilised chitin inhibitors on one occasion at one facility. Lerøy Seafood Group is working hard to achieve its long-term goal of eliminating the use of medicines to combat salmon lice, where justifiable in relation to regulations and factors relating to fish health.
Treatment of salmon lice in 2018 was mainly by mechanical means. Treatment with medication is avoided if possible. The number of fully grown lice per fish in 2018 was a stabile average of 0,12 lice per fish.
Main goal: 0 "We work to avoid salmon lice of reproductive age in our fish farms and we want to avoid use of medicines in treating salmon lice infestation."
Important target areas for the future:
We aim to achieve this by focusing on three main areas:
The volume of chemicals used for delousing by Lerøy Seafood Group has fallen substantially in recent years, while the volume nationwide has increased. There has been a particularly high increase in the use of chitin inhibitors nationwide.
PLANS – TARGETS FOR 2019
The Group invests a considerable amount of work in optimising equipment and routines specifically to avoid accidental release of fish. Actual incidents of accidental release and all events that may lead to accidental release are reported to the fisheries authorities.
Securing against accidental release is a question of focusing on execution and action, good planning of all operations to ensure safe execution, and efficient re-examination of operations. Key elements are: ATTITUDE, ACTION and RESPONSIBILITY.
However, these have no impact if not clearly defined by management. Moreover, it is essential that all employees are made aware of their responsibility to ensure zero – 0 – accidental release of fish within our companies.
The Advisory Group for Safety and the Environment plays an important role in this work. In addition to in-house processes, the group is responsible for the quality assurance and auditing of our suppliers in terms of the role they play from an environmental perspective, where prevention of accidental release is key.
In 2018, Lerøy accidentally released 115 fish.
16th of May: Sjøtroll Havbruk, 1 trout upon delivery.
22nd of August: Lerøy Vest, 49 trout.
10th of September: Sjøtroll Havbruk, 64 trout.
23rd of October: Lerøy Midt, 1 salmon.
Target: Avoid harmful impacts on species caused by intervention in the natural environment in fjord systems, including sedimentation/seabeds.
Average MOM-B max 1.5 per location
All the locations utilised by Lerøy Seafood Group are approved for fish farming by various Norwegian authorities. Before starting operations at a location, approval is required from a number of official and private bodies. Furthermore, approval requires compliance with numerous analyses, requirements and local conditions.
One of the assessments carried out both prior to approval for operations at a location and during fish farming at the facility is a so-called MOM-B evaluation.
MOM-B stands for:
M – matfiskanlegg (production facility)
O – overvåkning (monitoring)
M – modellering (modelling)
A MOM-B evaluation is carried out by a third party and involves extraction of samples from the seabed under and around the cages in a facility.
The analysis has three parts:
All parameters are given a score according to how much sediment is affected by the organic substance. The distinction between acceptable and unacceptable sediment condition is set to the highest accumulation that allows burrowing benthic organisms to live in the sediment. The analyses are carried out when production of one generation is at its peak. On the basis of these investigations, the individual location receives a score, which also provides an indication of when the next MOM-B investigation should be carried out. A poor score often requires more frequent seabed investigations than a good score. In addition to MOM-B, analyses are also conducted locally at individual facilities. These include measurement of density, oxygen level in the sea, currents, water quality, visibility, dives under the facility etc. Each facility is also linked with neighbouring facilities in a zone-based cooperation to work together on topics such as lice and preventing accidental release, spread of disease, outbreaks of disease etc.
MOM-B samples must always be taken before releasing fish to a location. If the score is 3 or 4, fish must not be released without an additional evaluation of the status of the location, describing the reason for the lack of restitution. If a score of 3 or 4 is reported for a location, a MOM-C sample shall be taken.
Target: Increase survival rate from release to slaughter
The main target for fish health and welfare is to increase fish survival rates from release to slaughter. All employees involved in fish farming take part in training focusing on fish welfare. Fish welfare is developed and monitored by keeping use of medicines to a minimum, with careful assessment of use, using only approved medicines which have documented environmental impact in accordance with the requirements of SLV, monitoring and documenting tolerance, and following up biological feed factors.
We cooperate locally, through zone cooperation, and nationally through various R&D projects and research environment for an even better fish health and fish welfare.
There is a major research project going on that have the intention og arrive at a definition for fish welfare that include physiological function, feelings and living conditions.
Cage density, i.e. how much space the fish have in the cages, also influences fish welfare.
The maximum limit is 25 kg/m3 but the results for 2018 were far below this limit, indicating that the fish have plenty of space in the cages. Fish health and fish welfare are at the core of our operations as a producer of Atlantic salmon and rainbow trout. As such, we have both ethical and statutory obligations governed by Norwegian legislation. A healthy fish is also a good fish for production and a prerequisite for good financial results. There are therefore numerous incentives for putting fish health and fish welfare at the top of the agenda for fish-farming operations. In an effort to ensure that we continuously fulfil these obligations, the Group has chosen to invest substantial resources in preventive measures for fish health, and this is now a major part of the production strategy for the entire Group. At the end of 2017, the companies in the Lerøy Seafood Group had 16 employees who are fish health biologists/ veterinary surgeons, as well as buying in external fish health services. An interdisciplinary approach is required to solve the challenges related to fish health and to ensure that the correct and necessary preventive action is taken. The interaction between factors such as technology, the environment, fish disease, nutrition and production biology is part of the whole, and forms the basis for how we as a Group work with preventive fish health.
In a cage with fish there will be 97,5% water and 2,5% fish.
Salmon is by far the healthiest "farmed animal" among the species from which food is produced here in Norway. No antibiotics have been administered to fish in open-sea cages in 2018. In the hatcheries the use of antibiotics in LSG was 0,00000004 kg/kg fish gross growth.
Lerøy Seafood Group's goal is not to use medicines. The Group will not use any kind of antibiotics unless necessary for fish welfare. Neither do we use anti-inflammatories, hormones or growth promotion treatments in our production.
Farmed salmon eat dry feed formed into pellets. About 70% of the feed consists of vegetable ingredients, while about 30% comes from marine raw materials such as fishmeal and fish oil.
Fish feed is the most important input factor in fish farming, and quality assurance of feed and feed raw materials is therefore absolutely essential. In 2018, Lerøy Seafood Group purchased feed from all three major suppliers in Norway: EWOS, Skretting and Biomar.
Working closely together with our feed suppliers, Lerøy Seafood Group has taken an active role in influencing the further development of feed composition to ensure that it is as highly adapted as possible to our fish-farming environment, our fish material and our market strategy. To facilitate these efforts, the Group has developed state-of-the art R&D facilities where feed trials can be carried out. In 2018, several trials were performed on both the use of new raw materials in feed and benchmarking existing feed concepts. During 2018, Lerøy Seafood Group has carried out extensive benchmarking of growth feed from the Group's three largest suppliers. The trials focused on feed factor and feed costs per kilo of fish produced. The benchmarking process has been carried out as a controlled trial at the Group's own trial facilities, as cage trials at commercial trial facilities (LetSea) and at the Group's own production facilities. Benchmarking at in-house production facilities is demanding, as we have to take into account a high number of variables in addition to feed. In total, 33 production cages have been in use during the trials, and the results are clear and conclusive. Lerøy Seafood Group intends to continue with these types of trials.
Lerøy Seafood Group has a particular focus on product quality for the end customer. During the year, the Group has intensified its efforts on sustainability and certification schemes for individual raw materials.
The aquaculture industry currently consumes up to 80% of the worldwide production of Omega-3-rich fish oil. Fish oil is the most important source of the healthy essential fatty acids, EPA and DHA. Lerøy has chosen to sustain a higher level of these Omega-3 fatty acids than required in the industry standard, with a view to both fish welfare and the quality of the end product. The gap between the level required in the standard and the level utilised by Lerøy is principally covered by Omega-3-rich oils produced by microorganisms. This is currently the most sustainable source of this oil available.
Lerøy Seafood Group has introduced a comprehensive sampling programme for re-examination of feed in terms of chemical content, dust and presence of foreign substances. The Group is able to trace both species and origin of the raw materials used in its fish feed. The feed suppliers carry out audits of their own suppliers, and Lerøy Seafood Group conducts annual audits of the feed companies. These measures, combined with the feed suppliers’ internal control activities and traceability, allow us to maintain control of feed content and quality.
Ethoxyquin, an antioxidant, has recently been the subject of much discussion. This antioxidant is added to fishmeal to prevent explosion during long-distance transport by boat. Without the addition of the antioxidant, the fishmeal may ignite when it heats up. This substance is currently subject to a new approval round in the EU, prompting discussions as to whether ethoxyquin will be approved. Ethoxyquin is not utilised directly in feed. Together with our suppliers of fish feed, Lerøy has worked together with the feed suppliers for some years to come up with an alternative to ethoxyquin From 2017 Lerøy no longer uses ethoxyquin in fishmeal to be used in our fish feed.
Access to raw materials for fish feed is good, despite a number of external factors which impact on supply. There are no special requirements for the raw material content of feed for fish (for example fishmeal), but fish require feed with a specific nutritional content. Today, we prefer to produce fish feed from cuttings from the wild fish industry and to supply wild fish directly for human consumption where possible. Raw material from wild fish is utilised as an ingredient in numerous different types of animal feed. Among all farmed animals, salmon is the most efficient at converting raw materials into consumable goods. The volume of wild fish caught and utilised for fishmeal and oil remains relatively stable and will most likely not increase in the near future.
2018 saw an increased demand for marine raw materials, putting pressure on the supply of marine raw materials. The steady growth of the aquaculture industry, particularly in Asia, and the vast increase in direct consumption by humans, for example of oil in Omega-3 capsules, have resulted in higher prices and a reduced supply of marine raw materials. The Group has taken an active approach to these challenges and has been able to find successful and sustainable solutions in cooperation with the feed industry.
Catch methods for the most common marine species:
Capelin: Ring net, floating trawler, trawler
Herring: Ring net, trawler
Mackerel: Purse seine, trawler
Sand eel: Fine-mesh trawler
Blue whiting: Ring net with pelagic trawler, industrial trawler
Brisling: Industrial trawler, coastal net vessel
Norway pout: Small-mesh trawler
MARINE RAW INGREDIENTS IN FISH FEED, LERØY SEAFOOD GROUP 2018
In 2018, blue whiting, peruvian anchoveta and herring trimmings were the largest input factors among the marine raw materials in feed. The largest input factors among vegetable raw materials were soya and rape.
What are FishSource scores? http://www.fishsource.org/
FishSource compiles and summarises publicly available scientific and technical information about the status of fisheries and aquaculture into an easily interpretable form. FishSource does not have its “own” sustainability rating system but provides the user with information on how internationally accredited systems would rate the fisheries. FishSource scores provide users with simplified indicators of how fisheries are performing according to globally accepted measures of sustainability. Scores make use of commonly reported numbers from stock assessments, but do not define a fishery as “good” or “bad”.
Fisheries can be ranked against one another, providing insights into how other groups would score a fishery using current measures of sustainability. Scores currently relate to the Marine Stewardship Council (MSC) standards, which in turn rely on international organisations’ criteria, e.g. International Council for the Exploration of the Sea (ICES). Scores have been developed such that a score of 8 corresponds to an MSC rating of 80, i.e. an “unconditional pass” on that criterion, towards MSC certification. The same rationale applies to e.g. a FishSource score below 6, i.e. "the fishery will be ineligible for certification” (MSC standards). Lerøy Seafood Group don't want to engage in endangered species and want to avoid doing harm to sensitive ecosystems.
“FISH IN – FISH OUT” – FIFO
FIFO is the volume of wild fish used to produce 1 kg of salmon. The targets set in the ASC standard are:
FIFO for protein (meal) below 1.35 and FIFO for oil below 2.85.
For 2018, the FIFO value for protein at Lerøy Seafood Group will be approximately 0.49 while that for fish oil will be approximately 1.49. It is natural to calculate one FIFO value for protein and one for oil, as these two raw materials have very different characteristics. We need 1.49 kg of wild fish to produce enough oil to produce 1 kg of salmon, but we only need 0.49 kg of wild fish to gain enough protein for 1 kg of salmon. As such, we have a surplus of fishmeal that can be utilised for other products.
The feed factor is an important indicator of how efficiently we convert feed in relation to produced volume of fish. Salmon farming is exceptionally efficient compared with other domestic animals. The feed factor for chickens is approximately 2 and for pork approximately 3.5, while Lerøy Seafood Group’s fish-farming companies reported a feed factor of 1.18 for salmon in 2017. This implies that we need 1.18 kg feed to produce 1 kg salmon, while 3.5 kg feed is needed to produce 1 kg pork.
The following actions have been initiated to reduce the feed factor:
In recent years, there has been a marked increase in vegetable sources of raw materials for fish feed. This leads to a reduction in the utilisation of marine raw materials and, in turn, reduced utilisation of different fish species.
Within salmon and trout farming, fish feed is the most important individual component in terms of both environmental accounts and costs. Lerøy Seafood Group relies on sustainable production of the fish used in fish feed so that the Group can continue to produce tasty and healthy seafood in the long term. In principle, it is desirable that all fish suitable for consumption is used as human food, but in practice this is not always possible. Fishermen will first try to deliver their catch for human consumption. However, onshore capacity to receive large volumes of fish is often insufficient. We use trimmings from our own fisheries (whitefish) to produce fish meal in our fish feed. A large share of the fish meal is produced by this trimmings and by-products.
Demand for raw materials is a prerequisite for sale of fish for human consumption. It is important to underline that fish not suited for direct human consumption is best used as feed for other fish species.
In nature, fish is a natural part of the salmon’s diet, and farmed salmon is therefore a fantastic vector for introducing valuable marine proteins and oils into the human diet. We feel privileged to be part of this, and to be able to participate in its future development.
Feed is the largest individual input factor for Lerøy Seafood Group, and we place a significant focus on optimal and cost-efficient feed utilisation. We work closely with our feed suppliers to influence the further development of feed composition to ensure that it is as highly adapted as possible to our fish-farming environment, our fish material and our various markets.
We have established ultra-modern R&D facilities where we carry out feed trials, maintaining full control of feeding and the volume of feed eaten per vessel.
Several trials were conducted in 2018 involving the use of new raw materials in feed and benchmarking of existing feed concepts.
Moreover, Lerøy has maintained a major focus on feeding regimes in 2018, accumulating and incorporating “best practice” throughout the organisation. Lerøy Seafood Group has an extra focus on the quality of the end product supplied to the end customer. Throughout the year, the Group has invested significant resources in the concept of sustainability and in certification schemes for individual raw materials.
Salmon from Lerøy shall have a high level of Omega-3 fatty acids, and we currently produce some of the most Omega-3-rich salmon on the market. This may present a challenge in terms of sustainable exploitation of the available resources rich in Omega-3, but we have an extensive programme aimed at making salmon a net producer of marine Omega-3 fatty acids, in the same way that salmon is currently a major net producer of marine protein.
We are constantly seeking new and sustainable raw materials for use in our fish feed. In 2016, we introduced several new raw materials to increase the sustainability of our feed. Camelina oil is an oil extracted from the Camelina plant, which is well known for its ability to grow in infertile soil and requires only low levels of water and fertiliser. The oil from this plant is particularly rich in Omega-3 fatty acids and has an extra-low content of Omega-6 fatty acids. We aim to minimise the amount of Omega-6 fatty acids in our salmon and the fish we eat, as our diet already contains more Omega-6 than recommended.
For several years, Lerøy Seafood Group’s level of Omega-3 fatty acids in its feed, and therefore also in its fish, has been higher than the market standard. These Omega-3 fatty acids have originated from fish oil, the most common commercially available source of Omega-3 in the world to date.
Microalgae also produce Omega-3 fatty acids, and microalgae meal is a good source of the essential Omega-3 fatty acids. A number of bodies have worked with microalgae to trigger production of Omega-3 fatty acids. The challenge has been to achieve sufficiently efficient cultivation in large cultures, so that microalgae can provide a genuine alternative to fish oil.
Lerøy Seafood Group has worked with fish feed containing various microalgae since the end of 2014. The fish have to enjoy the taste, the microalgae must be digestible, and the raw material must be reasonably priced.
Microalgae can be produced in two ways, depending on the source of energy they use.
1 ton of microalgae can replace 40 tons of wild fish.
OWN-PRODUCED MICROALGAE PRODUCED IN THE LIGHT
One main group of microalgae uses sunlight as a source of energy and, when this is combined with CO2, the algae grow and produce protein and marine fatty acids. Lerøy Seafood Group is part of CO2Bio, which has opened a national pilot centre for microalgae cultivation in Mongstad. The employees at the centre are working on developing commercial production of these microalgae. To date, neither CO2Bio nor others have succeeded in developing cost-efficient production of marine fatty acids using this method – but the work on identifying optimal production conditions has only just begun.
MICROALGAE PRODUCED IN THE DARK
The second main group of microalgae lives in the dark, in large tanks, and uses sugar as a source of energy. Development of this group is further along, and several parties are now producing commercially, although the prices vary significantly.
Together with the feed company BioMar, Lerøy Seafood Group has chosen a producer located in south Brazil. This is an American company primarily involved in cultivating sugar cane in Brazil. When evaluating the different suppliers, we apply several criteria:
• Primarily, the algae must not be a genetically modified (GM) organism, i.e. it cannot have been modified with genes enabling it to produce extra Omega-3.
• Secondly, production must have a minimal carbon footprint. The algae are cultivated in a “soup”. When production is complete, the residual products are dried to form a powder.
What energy source is used for the drying process? Many suppliers use gas or oil, leaving a significant footprint. “Our” Brazilian producer uses residual waste from sugar production (straws or sugar canes) as fuel to produce vapour used in the drying process. This ensures a minimal footprint.
In summary, the Omega-3 source from algae used by Lerøy is produced using one of the most sustainable and eco-friendly methods available.
Today, we add so much microalgae to our feed that we are able to close the gap between 6% (the standard) and 7.5% (the Lerøy standard). We are therefore free from the criticism that we “waste” valuable fish oil. And the best part is that the fish love the feed!
The introduction of new raw materials for fish feed is one of the most important focus areas in Ocean Forest, where we aim to make use of nutrient salts to produce new raw materials for fish feed. Meal from mussels is one example of this.
One of the objectives of the Ocean Forest project is to investigate the possibilities for alternative raw materials for fish feed. So far, the project has investigated seaweed, blue mussels and seafood sausages. The experiments to date suggest that blue mussels can be an exciting raw material in the future. Research on fish containing mussel meal shows that this is a good raw material. The fish liked the feed and grew as well as the control fish. Through Ocean Forest, we will continue our studies with the mapping of alternative raw material sources.
Below is a brief summary of the general framework and assumptions made when calculating greenhouse gas emissions for Lerøy Seafood Group in 2018.
The framework selected for calculating emissions includes emissions from combustion processes required for the operation of the Group's fish-farming companies and the related processing activities. This is referred to in the following as direct emissions. The Group also wanted to gain an overview of the indirect impact on global warming from the company's activities and has therefore included CO2 emissions from the production of electricity consumed by the company's fish-farming companies in Norway.
Significant sources of greenhouse gas emissions from Lerøy Seafood Group's core activities in Norway have been included in the calculations.
The purchase of products and services such as transport has not been included in the calculations. Lerøy Seafood Group is currently working on obtaining a good basis for calculating this. The tables provide a summary of consumption of fossil fuels and electricity, and greenhouse gas emissions for our most important segments. In addition, the feed companies have average emissions of 1.77 CO2e per kg feed produced for Lerøy Seafood Group. In 2018, Lerøy Seafood Group utilised a total of 246,774 tons of fish feed.
Direct emissions of CO2, CH4 (methane) and N2O (nitrogen oxide) are estimated based on the consumption of various fuel sources such as diesel, heating oil, petrol, propane and marine gas oil (MGO). Emissions from the combustion of petrol are assumed to be associated with cars, while emissions from marine gas oil are assumed to be associated with ships. Methane and nitrogen oxide emissions are converted to CO2 equivalents using their respective global warming potential (GWP); see explanation below.
The emission factors on which the calculation of direct emissions is based have been sourced from the UK Department for Environment, Food & Rural Affairs (2016).
Indirect emissions are emissions of CO2 from purchased electricity. The conversion for these emissions in Norway is based on the emission factor for energy mix in Norway, obtained from the Norwegian Water Resources and Energy Directorate (NVE).
GLOBAL WARMING POTENTIAL (GWP)
GWP is a measurement of the warming effect of various greenhouse gases on the atmosphere. The most significant greenhouse gases are CO2, methane and nitrogen oxide. GWP allows comparison of the warming potential of these gases, expressed as CO2 equivalents. Taking a perspective of the next 100 years, for example, emissions of 1 ton of CH4 will have an impact on global warming equivalent to emissions of 25 tons of CO2.
The analysis is based on A Corporate Accounting and Reporting Standard, the international standard developed by the Greenhouse Gas (GHG) Protocol Initiative. This is the most commonly applied method worldwide for measuring greenhouse gas emissions and forms the basis for ISO standard 14064-I.
The emission factors are based on IPCC-2006 overview factors in the fish farming industry
CO2e emissions for fish are in general low. When compared with other types of proteins we eat, salmon has the lowest eco-footprint.
The Wild Catch and Whitefish segment had its first full calendar
year with LSG in 2017.
EMISSIONS FROM LOGISTICS
Lerøy Seafood Group can influence its greenhouse gas emissions by developing its logistics solutions. Identifying the optimal transport solution is beneficial for the environment, while at the same time contributing to Group profitability. More than 80% of the Group’s products are distributed fresh. This places stringent requirements on proximity to the market and effective logistics solutions. Hallvard Lerøy AS is the largest sales and distribution company within the Lerøy Seafood Group. Hallvard Lerøy AS transports products by road, air, sea and rail. In 2018, over 80% of product distribution was by road.
The majority of distribution still takes place by road. This is mainly due to the limited options in terms of logistics solutions in the different regions. A number of our customers choose to provide transport themselves and therefore pick up products directly from our facilities. We work closely with our transport suppliers, reinforcing the importance of environmental protection. All told, the vehicles we use in our distribution are much newer and better than those used by several of our customers. If we can encourage some of these customers to use our distribution network, this will reduce CO2 emissions.
We continuously look for new distribution solutions that provide the level of service we currently offer our customers, while also being competitive on price. For example, in 2009 we altered one of our most heavily used routes to France. Whereas we previously transported salmon fillets from Norway to Arras in France in fully loaded trucks, we now make use of rail transport for parts of the route. This has allowed us to increase profitability as well as reduce our CO2 emissions. Solutions like this will make it easier for us to contribute positively to environmental protection. By making use of rail transport for parts of the route between Trondheim and Rotterdam, we have achieved a 68.5% reduction in CO2, down from 3.91 to 1.23 tons. The fact that the major transport companies now offer rail transport of entire articulated trailers to Germany and the Netherlands gives us new opportunities to make more use of rail transport.
The volume of fish transported by air has increased in the past year, due to higher sales to Asia, Australia and the USA. We work closely with our air transport suppliers to identify the best air freight systems and the best solutions for the environment.
Among other things, we work closely with a major airline that has scheduled passenger flights covering many of our markets. We make use of the cargo capacity on these planes, which are modern and mainly fly the shortest distance possible from A to B. Consciously focusing on this type of air freight helps us to access our markets using the most modern and least polluting aircraft. Conscious choices and attitudes have enabled us to fly lower product volumes in dedicated cargo planes.
Lerøy Seafood Group’s products from Northern Norway are transported to Southern Norway mainly by rail. This system works well during the summer months. During the winter, there are sometimes delays due to weather conditions etc. that force the Group to make use of uneconomical solutions that may also be less than optimal for the environment.
It is currently our frozen seafood that is transported by ship. We will maintain our focus on eco-friendly logistics in the years ahead and will collaborate closely with our main suppliers of distribution services to contribute to eco-friendly developments in this area.
Our increased focus on processed fish and the fact that we process many of our products in Norway allow us to make positive contributions to environmental protection.
Lerøy carries out a number of major and minor R&D projects on an ongoing basis, focusing on improved operating procedures, improved fish health, and improved survival rates and production optimisation. These are important projects that have a direct impact on daily production, and rapidly generate results and improvements. Developments in technology and methods based on interaction between technology and biology are key factors behind optimal operations.
THE GROUP’S RD&I EFFORTS IN 2018 HAVE FOCUSED ON SIX MAIN SUBJECTS:
1. Salmon lice
2. Feed/Feed utilisation/Feed strategies
3. Fish health
6. Human health
Lerøy also plays an active part in a number of external and internal R&D programmes and projects. We would like to mention some of them here:
SALMON LICE: SFI CtrlAQUA, focusing on production in closed-containment systems – either RAS systems on shore or closed-containment/semi-closed-containment floating systems at sea. Thanks to the focus on and efforts to develop this type of system in recent years, a major need for knowledge relating to fish biology and welfare has been uncovered to ensure optimal sustainability and rational production. CtrlAQUA has a timeline of 5 + 3 years and a total budget of NOK 160 million. The Research Council of Norway contributes 50% of this sum, while the remaining financing is provided by the fish-farming industry. Lerøy makes use of the knowledge gained from CtrlAQUA in both the production of juvenile fish on shore in RAS plants and for the development of closed-containment floating facilities at sea.
SEA LICE RESEARCH CENTRE: Lerøy participates in the Sea Lice Research Centre, a research programme focusing on salmon lice. The centre has contributed a large amount of fundamental knowledge on the biology of the salmon lice, knowledge now being used in the development of vaccines and functional feed, and in the work on salmon breeding.
The major focus of the current salmon lice strategy is on treating the fish once it is infested. There is now an increasing trend towards preventing the lice from attaching to the salmon. Fundamental biological knowledge is required to achieve this aim. In addition to this major salmon lice project, Lerøy plays an active role in several smaller projects, all aiming to devise new methods for the prevention and non-medicinal treatment of salmon lice.
THE PRODUCTS - R&D The use of cleaner fish is one of our most important tools for ensuring low levels of salmon lice at our plants. Cleaner fish are Mother Nature's own way of removing salmon lice on fish. Lerøy has therefore decided to build up substantial capacity for own production of cleaner fish and has made major investments in recent years to achieve self-sufficient supply. To date, production has mainly involved lumpfish. The total number of lumpfish released by Lerøy in 2018 was approximately 10 million. The Group also makes use of vast numbers of wrasse caught in the wild and purchased from local fishermen.
In 2013, the Group decided to become a significant producer of cleaner fish. Throughout 2016, Lerøy Seafood Group took a leading role in investments in cleaner fish for fish farming. The acquisition of 100% of the shares in Senja Akvakultursenter AS and 51% of the shares in Norsk Oppdrettsservice AS, in addition to the start-up of lumpfish production in a number of facilities, will – according to plans – give the Group a self-sufficient supply of cleaner fish in 2016. Over time, the Group has invested in capacity to deliver quality smolt throughout the year, made adaptations to production at sea, and also taken measures to satisfy the market demand for a year-round supply of salmon and trout. One central element in this process is the Group’s investments in smolt facilities that make use of recycling technology.
In 2016, Lerøy Sjøtroll opened a new part of Bjørsvik smolt plant built with RAS technology. Lerøy Aurora also opened a new smolt plant in Finnmark, representing a further boost to the Group’s smolt capacity. Having documented positive results with the use of lumpfish as a lice eater, Lerøy Seafood Group has decided to invest heavily in producing its own lumpfish. The production and utilisation of lumpfish as cleaner fish in our facilities makes us less reliant on cleaner fish caught in the wild. At the same time, we will be able to achieve optimal density and release times for cleaner fish in our cages, depending on problems with lice in individual locations.
In 2014, Lerøy Seafood Group acquired 34% of the shares in lumpfish producer Norsk Oppdrettsservice AS, with facilities in Flekkefjord and Molde. This provided us with satisfactory ownership rights in production facilities for lumpfish in North Norway. As a result, we can also achieve a self-sufficient supply of lumpfish for our localities in North Norway if necessary. To date, salmon lice have not been problematic at our facilities in this region.
The use of wrasse is an important element in Lerøy Seafood Group’s strategy to fight salmon lice. To date, we have purchased wild wrasse from professional fishermen, but Lerøy Seafood Group has also taken part in two different projects involving the farming of wrasse. These projects have now allowed us to establish our own farming of wrasse. Experience indicates that wild wrasse are very vulnerable in terms of handling and injury. A programme of close follow-up has therefore been established to prevent local overfishing and to ensure the gentlest possible handling of the fish.
To date, the project has been successful, and Lerøy Seafood Group aims to extend its use of this method. To ensure a regular and predictable supply and correct fishing of the natural stocks, Lerøy Seafood Group is taking part in the wrasse production project financed by the Norwegian Seafood Research Fund (with a total budget of NOK 33.1 million). This allows us to ensure that our R&D activities in this area target our industry, while acquiring new expertise as it emerges.
FISH HEALTH Lerøy Seafood Group maintains a constant focus on and controls fish health at its facilities. The fish-farming industry faces a number of health-related challenges – in particular viruses – which cannot currently be solved by vaccination or medication, as well as other less specific problems such as gill problems and ulceration during the winter. Together with the Department of Biology at the University of Bergen, Lerøy Seafood Group has established a position for a PhD student in nutrition to work systematically on problems with fish gills. We are also actively involved in working with vaccine suppliers to solve the problems relating to ulceration.
Fish health is a priority area for Lerøy Seafood Group.
TECHNOLOGY The current production practice, using open cages located in waters close to the coast, represents the greatest advantage for the Norwegian fish-farming industry, but the concept brings certain challenges, for example the risk of lice and accidental release. Lerøy Seafood Group is actively involved in several research projects challenging current technology in order to further develop the industry to become as environmentally and financially sustainable as possible.
Lerøy Seafood Group has enjoyed a collaboration with Preline AS since 2010, working towards the development of a closed-containment floating facility for post-smolt production. This collaboration has resulted in what is close to a full-scale pilot facility that was launched to sea in the winter of 2015 at Sagen in Samnanger municipality in Hordaland county. In a Preline facility, smolt will be produced in a closed-containment facility at sea. The smolt will remain in the facility until they weigh approximately 1 kg, when they will be transferred to open cages. This will reduce the amount of production time in open cages. The first fish were released to the facility in the spring of 2015, and production round no. 2 started in October of that year.
To date, we have recorded positive results in terms of growth and survival. There have been no salmon lice in the facility since start-up – an extremely encouraging sign but not surprising given that all the water in the facility is taken from sea depths far below the level where you normally find salmon lice larvae.
Lerøy Seafood Group currently owns more than 91% of the shares in Preline AS. Lerøy is also a partner in SFI CtrlAQUA, a centre for research-based innovation (2015-2022), which aims to develop and document a range of post-smolt concepts. Lerøy Seafood Group believes that the problems relating to lice and accidental release of salmon will be resolved. One major technological challenge is to identify and implement localities with the highest possible degree of biological sustainability. Such localities may place new requirements on equipment and operational formats which we currently do not face. At the same time, we rely on the goodwill of our local communities so that we can make use of such localities. Lerøy Seafood Group is involved in several projects targeting both offshore fish farming and use of closed-containment fish-farming technology for parts of the production phase.
The accidental release of farmed salmon is a challenge to the industry in terms of sustainability, economic loss and impairment to the industry’s reputation. Both in-house projects and active participation in R&D projects have allowed the Group to further optimise its production equipment and operating procedures. However, we are fully aware that none of our facilities (whether sea- or land-based, open or closed) are 100% safe from accidental release, as indicated by the Norwegian Board of Technology’s report “Salmon farming in the future”. Several closed-containment production concepts are currently being tested. Lerøy Seafood Group is confident that closed-containment floating concepts may provide a solution for particularly vulnerable locations, from smoltification until the fish weighs approximately 1 kg. We are participating in a number of R&D projects within this area, e.g. the OPP project (Optimal Post-Smolt Production).
Lerøy Seafood Group is also involved in a new full-scale project together with several other major fish-farming enterprises in Norway. The project involves tracing escaped fish back to its original locality. New technology has been developed to allow traceability of salmon back to its original locality by carrying out analyses of fish scales. The new technology can be used to trace a farmed fish back to its owner.
Lerøy Seafood Group played an active role in establishing the study “How can charting the salmon genome help solve the challenges of the Norwegian fish-farming industry?”, which is financed by the Norwegian Seafood Research Fund and led by the Department of Biology at the University of Bergen. There is no doubt that this project opens the door to a number of unknown methods now that the salmon genome has been mapped, and this will have a substantial impact on salmon welfare, combating disease and optimising operations. Lerøy Seafood Group, together with bodies such as the Norwegian Seafood Research Fund and the Research Council of Norway, is fronting an initiative to establish a common knowledge platform to gain a greater perspective on knowledge of genomics (system biology) and to make a ”salmon database” available to the industry.
The pipefarm development project builds upon the Preline pilot facility, a semi-closed-containment fish farm for production of post-smolt at sea. Development permits have been applied for based on this concept. Pipefarm as a project has major innovation height and will require significant competencies and capital to reach completion. Lerøy is confident that this concept will be of major importance for the future development of the Norwegian fish-farming industry.
Lerøy has invested heavily in the production of juvenile fish in our three farming regions. In 2013, we opened the Belsvik juvenile fish plant in Central Norway, which remains one of the world’s largest and most modern facilities for juvenile fish, with a capacity of approximately 14 million smolt. In 2016, we opened the “new” Laksefjord facility in the north of Norway with an RAS department for both fresh water and sea water production. This represented an increase in production capacity from 7 to 11 million smolt per year. The initial construction phase of the new juvenile fish facility at Bjørsvik in the south of Norway was also completed in 2016 and the second construction phase begun. This facility is Lerøy's main facility for production of trout. The facilities in both the Laksefjord and Bjørsvik are based on modern RAS technology that provides impressive savings in the consumption of energy and water.
In cooperation with Multiconsult, the Norut research centre and Akva AS, Lerøy has developed a system for improved prevention of accidental release, improved predictability and safe operations at sea. Via the advanced use of data from measuring stations in the facility combined with weather data from satellite stations, we can now take the step from experience-based to fact-based operational management using real-time data.
Sustainable fish farming is a high priority for Lerøy Seafood Group. New, enterprising projects and innovation play a decisive role in identifying good sources of marine raw materials for a growing fish-farming industry and in being able to feed a growing population in the years ahead. In 2013, Lerøy cooperated with Bellona, an environmental organisation, to launch an ambitious project principally targeting exploitation of those products we have in excess to produce those products we are lacking.
The company’s vision is: The sea – the major future source of new production of food, feed ingredients and energy/biomass, through the capture of CO2. Lerøy Seafood Group and Bellona, together with national and international R&D groups, aim to research how the organic interaction between different species can help solve the environmental problems created by fish farming, while at the same time attempting to achieve significant value generation by taking a leading role in developing new sources of biomass for human consumption, fish feed and bioenergy.
The cultivation of kelp, shellfish and invertebrates alongside fish is a new concept in the history of Norwegian fish farming. Waste produced by one species becomes a resource for another species, forming an interacting ecosystem of value-generating species in harmony with their environment. Mussels, kelp and other invertebrates filter large organic particles from fish feed or carried by water currents from fish-farming plants, e.g. small lice larvae. At the same time, these organisms absorb excess nutrient salts along with vast volumes of CO2. By increasing production of these new species, we can enhance value generation while also producing high-quality raw materials that can be utilised to produce fish feed, for consumption or for energy production.
Ever-greater emphasis is given to increased innovation as a fundamental element in securing Norway’s future. Lerøy Seafood Group is recognised for its innovative efforts over the past century. We aim to continue in the same way, and our ambition is to be at the very forefront of innovation within every part of our value chain.
The FINS programme is a comprehensive study of how eating fish affects human health. A number of studies have been conducted of new-born babies (mother/baby), kindergarten children, lower-secondary school pupils and persons who are overweight. The study has focused on the effect of eating oily fish such as salmon, mackerel or herring, and the results have been in part remarkable. In particular, a significant increase has been identified in the concentration and learning skills of young children when they eat fish three to four times a week. FINS is partly financed by the Norwegian Seafood Research Fund (FHF), with the National Institute of Nutrition and Seafood Research (NIFES) as project lead.
Lerøy Seafood is also playing an active role in a project focusing on nutritional quality and the endproduct’s importance for the physical and mental health of the consumer.
THE PRODUCTS – R&D
Ensilage of residual raw materials from fishing of white fish
• As a shareholder in Austevoll Seafood, Lerøy Seafood Group has opportunities to exploit raw materials that were previously dumped at sea by the deep-sea fishing fleet. In recent years, Hordafôr, another company within the AUSS Group, has worked actively to utilise raw materials otherwise regarded as waste. This includes not only fish guts and heads, but also by-catches etc. Hordafôr is currently working on a major project in cooperation with the white fish industry and fleet in North Norway, supported by the Norwegian Seafood Research Fund.
In 2011, the Norwegian and foreign deep-sea fishing fleet delivered around 580,000 tons of white fish (round weight) to Norwegian harbours (statistics provided by the Norwegian Directorate of Fisheries). Assuming that approximately 30% of this round weight can be utilised as ensilage, there is a total potential of 175,000 tons of raw materials available from the deep-sea fishing fleet for white fish which can be utilised, for example for fish feed.