(Bloomberg) -- Mowi ASA, the world’s biggest salmon farmer, plans to increase its annual harvest by 20% and cut costs to meet growing demand for the pink-fleshed fish even as the industry struggles with the effects of disease and lice.
The Bergen, Norway-based company is targeting 600,000 metric tons of salmon in 2029 from 500,000 tons this year and cost improvements in the order of €300 million to €400 million, it said in a statement ahead of its capital markets day on Thursday.
The industry heavyweight, which has grown from 375,000 tons of salmon in 2018, is betting that keeping young fish in freshwater facilities for longer will make them more robust when they are placed in the sea and reduce deaths in the pens, allowing the Oslo-listed company to grow capacity faster than their competitors.
The stock rose as much as 4.8%, the most since Jan. 19, and was up 3.9% as of 9:36 a.m. in the Norwegian capital.
Production growth in the global salmon farming industry has been checked as biological boundaries are reached, with disease and parasitic lice making it difficult for companies to meet demand that is outstripping supply for a food promoted as a healthy alternative to red meat and chicken.
Earlier this year, knock-on effects from winter sores and string jellyfish in Norway forced producers to export more fillets at a lower price than what they would get for their superior whole fish.
“All indications are that releasing larger and more robust smolt to sea can increase survival rates by up to 50%, and reduce the number of lice treatments in certain areas by 40%,” Mowi CEO Ivan Vindheim said on Thursday.
The company estimates revenue growth of 7% to 8% a year over the next five years to €8.5 billion in 2029 from €5.5 billion in 2023.
©2024 Bloomberg L.P.
