Wednesday 22 November 2017

Turning the tide of our ocean economy could net us €6.5bn

In a time of world recession, few products can boast the market growth that farmed salmon is experiencing

Some fish is fattier than pizza
Some fish is fattier than pizza

Jan Feenstra

Global demand for protein rich foods like fish is soaring, yet Ireland, despite being an island nation, is lagging behind its competitors in availing of the clear opportunities this presents.

The world's population has almost doubled in half a century to seven billion today and is expected to grow to nine billion by 2050. This population growth is being accompanied by increased wealth and standards of living which are in turn driving demand for high-quality foods such as fish.

The opportunity for increased exports is measured in billions of euro while there is also the potential for thousands of new jobs to be created in Ireland's disadvantaged coastal communities as a result. However, Ireland must act quickly lest we be left behind by our competitors.

Wild fish will not be sufficient to meet global demand. Stocks throughout the world are stretched to the limit, and sometimes beyond. As a consequence, fish farming, including salmon farming, has stepped up to meet these challenges. It is efficient, climate friendly, and produces a highly nutritious end product when regulated and managed correctly. It also provides valuable employment, investment and revenue. More than one billion people globally now rely on fish as their main source of protein and in 2013 nearly 160m tonnes of seafood was produced; approaching half of this was from aquaculture.

Here in Ireland we have an enviable and deserved reputation as a global leader in agricultural exports. Yet we have tended to look only to the land when it comes to food production without always giving adequate consideration to aquaculture and the vast resource which our waters represent.

Ireland boasts a coastline in excess of 7,500km long – longer than most of our European neighbours – and this opens up a 220m acre marine resource. Yet we produce just 12,000 tonnes of farmed salmon annually – around the same as the Orkney Islands. The Faroe Isles, which are only around five times the size of Achill Island, produces 70,000 tonnes. Scotland produces 160,000 tonnes. The Scottish salmon farming sector contributed €1bn to the Scottish exchequer in 2013.

Aside from its natural resources, Ireland has another significant advantage over other jurisdictions. Irish organic farmed salmon is a premium product in Europe, particularly in countries such as France, Germany and the UK where it commands up to a 50 per cent premium on farmed salmon produced elsewhere.

A great deal of the demand for Irish salmon is based on the quality of the product – Irish salmon farmers have learned to turn our exposed coastline to our advantage. Our fish are constantly swimming in our turbulent tidal waters, resulting in a distinctive firm-fleshed premium quality salmon.

In a time of world recession, few products can boast the market growth that farmed salmon is experiencing. In fact, the single biggest issue facing Irish salmon producers today is that they cannot meet the demand for their product. Ireland has a traditional smoking and processing industry that has had to resort to salmon imports because of insufficient Irish raw material.

In recognition of this, the Government has identified and set specific targets with regard to our seas. It wants to make this resource a key component of our economic recovery and sustainable growth.

In its July 2012 report, 'Harvesting our Ocean Wealth', it stated: "There is significant scope to expand Ireland's aquaculture industry, with increases expected from both conventional aquaculture and a new deep-sea salmon farming initiative, amounting to a 78 per cent increase in volume of production by 2020."

It also sets the target of increasing the turnover of our ocean economy to exceed €6.4bn by 2020, subsequently doubling it to represent 2.4 per cent of GDP by 2030.

Marine Harvest is the world's biggest producer of farmed salmon, with one-fifth of the global production; we employ over 10,600 people with operations in 22 countries worldwide. We are clear about the growth potential in the market for Irish salmon.

Already, we employ more than 260 staff across 13 sites along the western seaboard, predominantly in areas where other employment opportunities are quite limited. Our operations here contribute over €15m to the domestic economy annually with some 800 Irish suppliers at present doing business with us. At our Irish operation, we export over 80 per cent of our product to countries all around the world including USA, France, Germany and Switzerland.

Marine Harvest Ireland (MHI) operates the first salmon farm in the world to achieve organic certification. Our Clare Island salmon has PGI status. We now produce organic salmon and premium salmon under the names 'The Irish Organic Salmon Co' and 'Donegal Silver' respectively. As well as at our headquarters in the Fanad peninsula and in Inver Bay, Co Donegal, we produce Organic Atlantic salmon at Clare Island in Clew Bay, Co Mayo and in Bantry and Kenmare Bays, in counties Cork and Kerry.

Looking to the future, we believe that Irish salmon aquaculture as a whole could potentially contribute 25 per cent of the Government target for seafood; a value of €250m MHI alone could contribute over half of this. To this end, we have a €22m investment earmarked for Ireland over the next five years, subject to a renewal and granting of licences. This could create a further 250 direct jobs.

To realise these ambitions, what Marine Harvest Ireland and other aquaculture operators now need to see is the ambition shown by the Government in 'Harvesting Our Ocean Wealth' reflected in practical measures to enable industry development. The reality is that at present, in our nearest competing jurisdiction, Scotland, licensing approval takes approximately 22 months. Here in Ireland, the same approvals can take more than five years.

With some streamlining of these processes we can create an export industry to rival our agricultural successes, boosting further our credentials as a food nation. The time is right and the opportunity ripe to harness the potential of our great marine resource.

Jan Feenstra is managing director of Marine Harvest Ireland

Sunday Indo Business

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