The world’s biggest salmon farmer, Norway’s Marine Harvest, is looking to rally U.S. investors around the aquaculture sector’s role in meeting a substantial portion of the world’s growing need for food

Marine Harvest Seeks to Garner Interest From U.S. Investors

Company Seeking Organic Growth Together With Mergers, Acquisitions

KJETIL MALKENES HOVLAND

Jan. 27, 2014 8:22 a.m. ET

OSLO—The world’s biggest salmon farmer, Norway’s Marine HarvestMHG.OS -1.06% is looking to rally U.S. investors around the aquaculture sector’s role in meeting a substantial portion of the world’s growing need for food through increased fish production.

Marine Harvest will be listed on the New York Stock Exchange Tuesday, joining U.S.-listed protein companies that may be more familiar to American investors, including Tyson Foods Inc. TSN -0.35% and Sanderson Farms Inc. SAFM -1.86% It will be the first listing abroad by one of the many companies in Norway’s booming aquaculture industry.

“There are many U.S.-listed protein companies. We want to be the first one based on protein from the ocean,” Marine Harvest Chief Executive Alf-Helge Aarskog said. He noted that some of the key land-based protein farmers are priced higher than Marine Harvest.

Marine Harvest isn’t seeking to raise new funds through the listing of American Depository Receipts on the Big Board. It’s looking instead to attract more interest—including broadening its appeal to institutional investors who have previously been limited in their ability to invest. “We want to grow even faster,” Mr. Aarskog said, adding that his company would like to couple organic growth with mergers and acquisitions and farm species in addition to salmon.

Food producers are among a number of agricultural-related companies benefiting from a predicted rise in demand for food. Farmed fish, representing only 9% of the global fish production for human consumption in 1980, are now responsible for 47% of the stock, according to the United Nations’ Food and Agriculture Organization.

The Oslo-based farming giant, which produces more salmon than any other company in the world, has a market capitalization of 31.1 billion Norwegian kroner ($5.1 billion). Marine Harvest has been expanding from fish farming into fodder production via acquisitions, and it has established facilities in Asia while also constructing a new fodder plant in Norway.

The company, forged from a merger in 2006 with Pan Fish ASA and Fjord Seafood ASA, is 27% owned by Geveran Trading Co., an entity controlled by shipping magnate John Fredriksen.

Norway’s fish-farming industry has seen rapid growth over the past 40 years, becoming the second-largest fish exporter after China as of the beginning of this decade. And times have been good for the industry’s key players. Mr. Aarskog said that “2013 was a good year for salmon prices.” While production volumes remain steady, “demand is growing,” with more people eating sushi and smoked salmon.

The rise of fish farming comes amid concerns about overfishing in the world’s oceans. Captured-fish volume has stabilized at around 90 million tons annually, while the output of farmed fish has expanded by 60 million tons, or 12 times its volume in the three decades ending in 2010, the U.N.’s FAO said.

Growth has come with concerns. Fish farmers, including Marine Harvest, face threats that include disease, fish escape, tighter regulations and the need to use lower-protein vegetable fodder as global overfishing limits access to higher-protein feedstock. Major investments are also needed to fight parasites, Mr. Aarskog said.

 

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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