Salmon farming. (Photo: Marine Harvest)
Salmon farming has a strong 'hypothetical potential' to grow
Thursday, December 13, 2012, 06:00 (GMT + 9)
A new report by market research firm Coriolis for the Ministry of Business, Innovation and Employment, says New Zealand has strong "hypothetical potential" to increase its harvest for its high-value fish species.Nevertheless, the report, titled Investment Opportunities in the New Zealand Salmon Industry, does not recommend investment in the sector due to the high levels of risk, uncertainty and cost around ocean space tenure.
Norway, which has a much more developed industry, produces 75 times as much salmon as New Zealand, which is geographically similar in size, The New Zealand Herald reports.
The country's salmon exports were worth NZD 63.4 million (USD 53 million) last year, according to statistics of Aquaculture NZ.
But the Coriolis report states that although there is potential for growth, it is unlikely to occur:
"The fundamental issue is that New Zealand as a society has yet to come to a consensus on salmon aquaculture, with proponents arguing for it to become a billion dollar industry, while a wide-ranging opposition of recreational fishermen, inshore fishing companies, holiday home owners and environmental advocates oppose its growth."
Greenpeace, among other opponents to aquaculture, argue that the industry is not wholly sustainable and is damaging to the environment.
New Zealand King Salmon is the country’s largest firm with 68 per cent of production, followed by Sanford with 24 per cent of production. The former has applied with the Environmental Protection Authority to expand to 206 hectares of water space in the Marlborough Sounds, allowing for the construction of nine new fish farms.
The company’s CEO, Grant Rosewarne, said this would allow the firm to increase revenue from NZD 120 million (USD 100 million) to NZD 500 million (USD 418 million) over the next five to ten years. An interim ruling on the application is due 19 December.
"We are confident that we will be granted some space but it is in the hands of a board on inquiry who are currently considering the matter," said Rosewarne.
If extra water space can secured, Rosewarne believes that salmon farming, which emerged in the late 70s in New Zealand, could become a NZD 1 billion (USD 836 million) industry.
"There's no other primary agricultural industry that can reap such rich rewards for New Zealand, requiring such little space and conducted in a completely sustainable way," he said.
Tim Morris, the author of the report, said that in theory the sector has potential to grow to a NZD 2 to 3 billion (USD 1.67 to 2.5 billion) industry if enough space was granted.
There are four other smaller players in the country. One of these, Mt Cook Alpine Salmon, which farms in hydro power canals in the South Island's MacKenzie Basin, is in the middle of a NZD 20 million (USD 16.7 million) expansion plan to generate a production increase of 1400 per cent over the next four years.
Meanwhile, Eric Barrett, chief executive of Sanford, has expressed interest in modest growth plans within the industry.