Gråkjær dispute settled, but Fredrikstad Seafoods plans to switch to yellowtail in Øra RAS
Fredrikstad, Norway-based Fredrikstad Seafoods has won a ruling from the Norwegian Court of Appeal in Borgarting, Gråkjær must compensate the company for a construction failure at its land-based fish farm in Øra, Norway.
Gråkjær was ordered to pay 60.9 million NOK (6.9 million USD) plus interest, for a total of more than 77 million NOK (8.7 million USD), confirmed Bernt-Olav Røttingsnes, CEO of the company parent of Fredrikstad Seafoods, Nordic Aquafarms, at SeafoodSource.
Fredrikstad Seafoods has built Nordic AquaFarms and Norway’s first large-scale land-based fish farm, which has been in operation since May 2019 and in production since mid-2020. Holstebro, Denmark, Gråkjær and Fredrikstad Seafoods were in a long-running dispute. on who was responsible for a major construction failure, discovered in February 2017. The foundations on which the concrete structures of the fish farm had been built were not strong enough to support the weight of the farm. As a result, the buildings were demolished, the foundations redesigned, the fish farm rebuilt by a new contractor, and Gråkjær’s contract was terminated.
Unable to resolve the dispute internally, both parties turned to the legal system and in 2020 a district court ruled that the termination of the turnkey contract with Gråkjær for design error was unfair. Fredrikstad Seafoods was ordered to pay 22.7 million DKK (3.4 million USD) in compensation to the Danish company, plus 15 million NOK (1.7 million USD) in legal costs.
This decision was appealed, leading the recent court hearing to conclude that Gråkjær had failed to account for differences in soil type between another land farm he had built for Sashimi Royal. , a sister company of Fredrikstad Seafoods in Hanstholm, Denmark, and the Øra site.
Despite the court victory, Røttingsnes said his company is currently reconsidering the future of the RAS farm and recently filed an application to switch production to yellowtail.
“Sashimi Royal is currently producing this fish with great success in Denmark, where we have a hatchery, broodstock and grow-out unit, and as the grow-out facility in Fredrikstad is similar, we have been looking to see how we can pull the best use of all our facilities in the Nordics,” Røttingsnes told SeafoodSource.
Røttingsnes said he sees great potential to sell more yellowtail in Europe, as demand currently far exceeds the company’s ability to supply. Crucially, he said, yellowtail flounder currently fetches nearly double the market price of salmon, so converting the Norwegian site to grow yellowtail flounder makes economic sense.
“The Fredrikstad setup would require very few modifications – the main one being to adjust the water temperature. Salmon need a temperature of around 12-13 degrees Celsius, while yellowtail flounder needs warmer water, around 20 degrees Celsius, to thrive,” he said.
Røttingsnes said Fredrikstad Seafoods had received positive feedback from Norwegian licensing authorities after completing the first stage of the change request, and he said he hoped the process would be completed later this year. This would allow stocking to begin in 2023 and the first harvest to begin in early 2024.
“Our intention is first to increase the production capacity of Sashimi Royal to around 1,000 MT from the current 600 MT, and to supply Fredrikstad with 300 gram fish for grow-out. The next step is to increase production in Fredrikstad and then maximize production in Denmark. Between the two sites, we should be able to produce at least 8,000 tonnes per year, but as we have our own broodstock, we can produce even more, if and when the market develops,” he said.
The shift in focus to yellowtail flounder farming in Norway is part of Nordic Aquafarms’ broader strategy to produce premium fresh seafood with a focus on local sourcing.
“It is becoming more and more unacceptable to fly fish around the world, so our intention is to focus on producing fresh amberjack in Europe for the European market and producing fresh salmon in the United States for the American market,” Røttingsnes said.
Nordic Aquafarms has a US bi-coastal strategy, which is executed through its subsidiary Nordic Aquafarms. Final permits were recently granted for its planned facility in Belfast, Maine, USA, and permits are expected to be granted for its site in Humboldt, California, USA later in 2022.
“We plan to have two fully licensed sites in the United States by the end of 2022, and we look forward to having the facilities built and commissioned,” Røttingsnes said.
Photo courtesy of Fredrikstad Seafoods