Higher demand, lower technology costs drive plans for indoor salmon farms
Two companies plan to break ground on large-scale commercial salmon farms in midcoast Maine.
FEB. 23, 2018
BY PETER MCGUIRESTAFF WRITER
Increased demand for sustainable seafood and reduced technology costs are stimulating growth in indoor aquaculture, including two Atlantic salmon farms planned for midcoast Maine.
Portland-based Whole Oceans announced plans Thursday for a $250 million indoor farm at the site of the former Verso paper mill in Bucksport. The news came less than a month after Nordic Aquafarms, a Norwegian company, released plans for a $150 million indoor salmon farm in nearby Belfast.
The timing of Whole Oceans’ announcement was coincidental, said corporate development director Ben Willauer. Whole Oceans’ project has been under development for six years and the company has been discussing a Bucksport location with town officials for 18 months.
Considering Americans’ rising appetite for sustainable fish, Willauer said he isn’t surprised that other companies are developing land-based fish farms in Maine. Roughly 95 percent of the 500,000 metric tons of Atlantic salmon consumed in the U.S. every year is imported from traditional offshore net and pen farms. That leaves a lucrative opening in the marketplace. As proof, Whole Oceans says it already has pre-sold its entire production output for the next decade.
“If you are a domestic producer of salmon, you have a real leg up in the overall space,” Willauer said. “There is a huge amount of opportunity for expansion in this space – I think that is why you are seeing new entrants into the market.”
Both farms plan to grow salmon in indoor tanks with recirculating aquaculture systems, known as RAS. The closed-loop technique filters and recycles about 99 percent of the water fish use through a continuous cycle. The technique has earned a “best choice” rating from the Monterey Aquarium Seafood Watch program.
The benefit of the systems is that they have almost no environmental impact, said Michael Timmons, a professor of biological and environmental engineering at Cornell University with 30 years of RAS experience.
“All of the water is recycled, very little of it is discharged and thrown into the environment,” Timmons said.
Indoor farms also eliminate concerns about pollution, disease or escape associated with offshore farms, although many of those concerns are overblown, he added.
“It is much more environmentally benign, typically considered sustainable because you can control the waste,” Timmons said.
The technology has been around since the 1960s, but costs have come down and equipment has become more efficient, making commercial-scale indoor fish farms economically viable, Timmons said. In the last 10 years, the electricity cost per kilogram of production has come down 70 percent, and future finfish aquaculture growth will be dominated by RAS systems, Timmons predicted. Last year, Norwegian producer Atlantic Sapphire announced construction of a $350 million indoor farm in Miami, Florida.
“All of those things have improved over the years; now it can be put together in a package that is economically competitive with net and pen,” he said. “We can produce fish with less capital investment and lower operating costs.”
The Bucksport project has been in the works for the last year and a half, as Whole Oceans discussed plans with town officials and state and federal regulators.
Whole Oceans wanted to make sure it had everything in place before announcing its decision, said Town Manager Susan Lessard. The company signed a purchase and sale agreement for 120 acres at the site of the former Verso paper mill on Thursday. The mill closed in 2014, putting 500 people out of work. It was demolished and sold for scrap a year later.
Whole Oceans’ plans fit into the town’s vision for an industrial property that is valuable but environmentally responsible, Lessard said.
“Their entire philosophy and commitment ties in very well in terms of what the community’s goals are,” she said. “Our attitude fits with Whole Oceans’ in terms of how they see their company and how they want a long-term relationship with the community.”
Whole Oceans plans to break ground on the development in August, with an initial $70 million investment. The final $250 million build out will consist of a building covering eight acres filled of 30-foot-tall by 60-foot-diameter fish tanks. Initial construction should be finished within a year and the first harvest ready in 2021, Willauer said. At full capacity, Whole Ocean wants to produce 50,000 tons of salmon a year and employ 200 workers.
Nearby Nordic Aquafarms has said it plans to create up to 140 jobs and harvest 33,000 tons of salmon a year at full capacity. The company has purchased 40 acres on the outskirts of Belfast and has purchase and sale agreements to increase its holdings to 80 acres.
Willauer said Whole Oceans expects to be able to hire locally and has reached out to Maine colleges and universities about workforce development opportunities.
“Globally, there is no university that has established a land-based aquaculture degree,” he said. “We are in a position right now to lead a multibillion-dollar industry coming into the U.S.”
Maine is the leading producer of farmed Atlantic salmon in the U.S., although its harvest is dwarfed by operations in Canada, Norway and Chile. Maine hosts about 29 Atlantic salmon leases, most located in Cobscook Bay, near Eastport in Washington County. Almost all of Maine’s salmon farms are owned by New Brunswick-based Cooke Aquaculture, which also operates in Canada, Washington state, Chile, Scotland and Spain.
Maine harvested about 24.5 million pounds – roughly 11,000 metric tons – of salmon worth $73.5 million in 2010, the last year in which state records were kept. Maine does not currently publish salmon aquaculture landings because fewer than three companies report them, and the numbers are therefore considered confidential, proprietary information.
Nationally, about 47.5 million pounds – or 21,545 metric tons – of salmon worth $87.7 million were harvested in the U.S. in 2015, according to the National Marine Fisheries Service.
Whole Oceans is betting on growing demand for domestic salmon, especially from consumers who are becoming more environmentally conscious. A 2016 survey from the Marine Stewardship Council found that 72 percent of seafood consumers across 21 countries valued sustainability over price or brand.
“The high-end consumer is almost going to demand this level of quality in their fish when they find out about it,” Willauer said.
Maine’s branding as a place for world-class seafood is likely part of what attracted new, cutting-edge companies to invest in the state, said Sebastian Belle, executive director of the Maine Aquaculture Association.
“I think the market for Atlantic salmon is very strong, irrespective of where it comes from,” Belle said. “The market for Maine salmon is particularly strong because of its brand.”
Only time will tell if the two midcoast projects will work out, or if indoor salmon farming becomes a new industry for Maine, Belle added.
“I think it is a little early to tell – they are both large, very capital-intensive projects. I think investors will wait to see how they do before putting more money in,” he said. “But who knows? There are already two projects now.”
Peter McGuire can be reached at 791-6325 or at: