18th December

Positioning on global markets and jobs potential hang in the balance

Marine Harvest Southwest, the Castletownbere-based subsidiary of Marine Harvest Ireland – the country’s largest salmon farmers and processors of organic and premium eco-label salmon – is on track to achieving its 2011 production target but could double sales of organic farmed salmon in line with demand abroad if aquaculture licensing * was resolved.

Marine Harvest site. Photo Niall Duffy

Speaking to Inshore Ireland, operations manager John Power says the  industry is looking to Minister Coveney to “get to grips” with the issue that has dogged aquaculture for the past decade. 

“Like everyone involved in the aquaculture industry, I’m hopeful that the new marine minister will have enough clout at the cabinet table and will act quickly to sort out this ten year log-jam.

"With his background knowledge of Ireland’s marine sector, Minister Coveney is well aware there are real jobs in aquaculture, with real people and real expertise. And there’s no doubt given a fair chance, we can produce the goods and create employment where it really counts – in the remoter parts of the country,” Power declares.

He says it’s a “shame” to see Ireland “playing second fiddle” as a farmed salmon producer to Scotland and Norway whose industries have expanded steadily since the 1980s.

“All the reports on the Irish salmon farming industry that I’ve read over the years suggest we should now be producing at least 50,000 tones a year. The reality is different, however, it’s only about 15,000 tonnes. And for the past few years the entire industry has been going backwards. I blame the licensing mess for that.”

Background
Power’s involvement with the company’s three production sites in Beara goes back to 2003 when he and business partner, Sean Doran, bought out the assets of Murpet Beara Atlantic Salmon soon after that company went into receivership.

“The Murpet assets included its three production sites at Deenish Island, off the Derrynane coast in Kerry; Inis Farnard, formerly known as Kealincha Salmon near Eyeries village and the Roancarraig site in Bantry Bay, near Castletownbere. With these came the sea cages and moorings, and all the associated nets, workboats, feed barges and automated feeding systems”.

The new venture - Silver King Seafoods Ltd - began operating in Spring 2008, and though relishing the challenges ahead, Power reveals he never had any doubt that to compete internationally as a farmed salmon producer he would eventually require a link-up with a partner that would bring in extra investment and, if possible, essential expertise.

“With salmon farming in particular it’s pretty much down to money at the end of the day,” he explains,

“Cash flow dictates the size and the speed at which that you develop – and obviously you’re a lot more vulnerable as a small operator. While our key goal from the outset was to have all three sites fully operational as quickly as possible, and that’s what we set out to do, we also knew that down the road more investment would be required for expansion.”

As for venture capital investment, Power says that he ruled out going down that road, believing it “comes at a very high price”.

Potential recognised
He reveals that several companies recognised the potential offered by Silver King Seafood’s three sites –including multi-nationals, a French supermarket chain, as well as some of the companies that had already bought into the Scottish scene.

“About eight individuals definitely showed an interest; however for one reason or another it never went beyond that. But when Marine Harvest Ireland’s Managing Director, Jan Fenestra talked to me about developing a business relationship, I knew instinctively this was the right way to go,” he says.

Power acknowledges it took a while to get it off the ground but eventually agreement was reached between himself and Feenstra:

“In the end a deal was agreed in late 2008 which saw Marine Harvest Ireland buying outright Silver King Seafoods as a going concern. Everything was included: assets, debts, liabilities as well as our tax breaks, and we became Marine Harvest Southwest.”

Seemless transition
Another essential part of the agreement was that John Power would “stay on board” as Operations Manager for the south-west to complete the transition that would see all three sites becoming more efficient farmed salmon production units.

Power is in no doubt that being a fully-integrated production unit of the Marine Harvest Ireland has freed him from being “a jack-of-all-trades” as he says he was at Silver King, and enables him to “focus entirely on the job I am supposed to be doing”.

Not only has Marine Harvest Southwest installed fourteen brand new, fully-decked, three-ring Triton cages from Fusion Marine, Scotland, they have also re-vamped their highly-automated fish-feeding system to include in-cage underwater cameras which allow both fish and environment to be observed during daylight hours.

It’s clear that Power is particularly proud that all of this new investment has seen staff numbers more than double over the past two years to thirty-six.

“These are real full-time PAYE jobs; and we also have six contract divers as well as other technical contractors for maintenance and engineering. These jobs are really important for an area like Beara where job opportunities are not that plentiful, and it proves again that aquaculture can and does provide sustainable employment,” he states.

In Color Box

* John Power comments:

Licensing is one of the biggest stumbling blocks to expanding Ireland’s aquaculture industry. It’s holding up development in the entire sector - not only in tonnage terms but also in the job creation that comes with it. To be fair, the department has been working to solve this issue and has proposals on the table to amend or rewrite the licensing protocol for aquaculture operations around the coast. Unfortunately however, it has been a very long road, and we’re not there yet.

We need a government that will support - through the proper criteria –, the proper application process. We’re not looking for any special concessions. We will go through the application process to the letter of the law because we are a very proud industry. We do not flaunt the law regarding the environment issues or other ways, and we have nothing to hide.

In Marine Harvest Ireland we are very, very strong on environmental issues, and we work and strive to sustain a pristine environment in the areas we operate. Everything we do as salmon farmers is traceable through the organic accreditations that we have successfully attained. 

Now is an extremely advantageous time for our salmon farming industry to move forward. We are in a situation where this country needs jobs urgently. From Marine Harvest’s point of view we are profitable, and have been profitable over many years.

We have a highly-developed niche market for our organic salmon for which the demand is doubling and outstripping our ability to supply. We have a very strong mother company who can see our success and will back us financially on any of the projects we want to develop.

So, from a jobs and industry and a government point-of-view, all we need are licences - through the proper channels - to develop our industry to produce more jobs and more revenue in an export-driven industry.

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