Land based salmon grow-out

Building it large

Ivar Warrer-Hansen

Inter Aqua Advance A/S

Stockholm 11th – 12 th November 2015

For land based salmon growout this will apply

RAS projects fail due to poor RAS concept – but also due to small scale even with a good RAS

concept

So, what is large?

Large production volume can be many things

One system with 2 tanks @ 8,000 m3Water depth 9 mWill be cheap

10 tanks or moreWill be more expensive

Making use of tank production volume

Difficult management and fish infrastructure

Weekly deliveries and easy management

6,000 tons per annum stand alone facility –weekly deliveries

Egg incubation, fry and smolt

Pre - growout3 x 2,000 tons growout

HATCHERY & NURSERY RAS MODULE

Hatchery RAS 4 x CompHatch hatching systems from Alvestad, complete with autonomous water treatment unit with fine filter and UV sterilization (60 mJ/cm2 @ UVT > 80)

Culture Tanks: Start Feeding: 2 x 12.6m3 round tanks (Ø4m x 1mWL)

Fry: 2 x 54m3 round tanks (Ø6m x 1,9mWL)

Parr: 4 x 54m3 round tanks (Ø6m x 1.9mWL)

Smolt: 4 x 157m3 round tanks (Ø10m x 2mWL)

Total Culture Volume 976 m3

Water Flowrate: 1530 m3/hr (tank turn-over 2 x/hr for fry, 1.5 x/hr for parr and smolt)

Main Mechanical Filtration: 2 x 40 micron drum filters AISI 316Biological Filtration: 2 x CLEARWATER Low-Space Bio-Reactors with a peak feed capacity of 1,200 kg feed per

day @ 52% protein, FCR =1 and an assumed average and 14 deg. C.1 x CLEARWATER Low-Space Denitrification reactor with a max. hydraulic capacity of 180 m3/hr (app. 11.7% of total flow)

Carbon Dioxide degassing: Cascade degassing in pump sump + supplementary decentralized degassers by tanks.

Fine Filter + UV-Sterilization: Bead Filter + 30 mJ/cm2 UV to Start Feeding and Fry Tanks = 12% of total system flow.

Oxygen Supply: Low-Pressure oxygen cones + in-tank emergency oxygen diffuser systems

PGO 10-500 RAS - PREGROWOUT

PGO-10-500 RAS MODULE DESCRIPTION:

Culture Tanks: 10 x 500 m3 tanks (Ø14m x 3.2mWL)

Total Culture Volume 5000 m3

Water Flowrate: 6700 m3/hr (tank turn-over 1.34 times/hr)

Main Mechanical Filtration: 8 x F4-8, 40 micron drum filters AISI 316 by CM Aqua for full flow capacity.

Biological Filtration 4 x CLEARWATER Low-Space Bio-Reactors with a peak feed capacity of 3,000 kg feed per day @ 44% protein and an assumed average FCR of 1.1 and 14 deg. C.1 x CLEARAWTER Low-Space Denitrification Reactor for NO3-N removal. Hydraulic Capacity up to 350 m3/hr (app. 5% full flow)

Carbon Dioxide degassing: Cascade degassing in pump sump + supplementary decentralized degassers by tanks.UV-Sterilization: Channel UV: 30 mJ/cm2 @ UVT >73 for approx. 10% of the total circulating flow

Oxygen Supply: Low-Head Oxygen (Deep Shaft type) and supplementary oxygen cone system for peak situations. Emergency oxygen diffuser systems installed in all tanks.

GO 10-1000 RAS - GROWOUT

GO-10-1000 RAS MODULE DESCRIPTION:

Culture Tanks: 10 x 1000 m3 tanks (Ø16m x 3,5mWL)

Total Culture Volume 10.000 m3

Water Flowrate: 13.400 m3/hr (tank turn-over 1.34 times/hr)

Main Mechanical Filtration: 8 x F5-8, 60 micron drum filters AISI 316 by CM Aqua for full flow capacity.

Biological Filtration 4 x CLEARWATER Low-Space Bio-Reactors with a peak feed capacity of 6.400 kg feed per day @ 40% protein and an assumed average FCR of 1.2 and 14 deg. C.

1 x CLEARAWTER Low-Space Denitrification Reactor for NO3-N removal. hydraulic capacity is 670 m3/hr (5% of full system flow per pass through the water treatment)

Carbon Dioxide degassing: Cascade degassing in pump sump + supplementary decentralized degassers by tanks.

UV-Sterilization: In combination with Ozone treatment Plant for purging section (app. 15% af full flow)

Oxygen Supply: Low-Head Oxygen (Deep Shaft type) and supplementary oxygen cone system for peak situations. Emergency oxygen diffuser systems installed in all tanks.

2,000 tons grow-out module

Financial aspects of large production

6,000 tons per annum land based salmon grow-out:

•

• Assumptions: Designed as stand alone system for weekly harvest

•

• Capital needs: CAPEX (incl. incubation and smolt prod, DN, EOPT) € 37.000.000

• 1st year direct production costs € 13.000.000

• € 50.000.000

•

• Financing: Private equity € 12.000.000

• Loan equity € 38.000.000

•

• Depreciation: CAPEX € 37.000.000 15 years € 2.466.677

• Financial costs: € 38.000.000 10 years 5% € 4.921.173•

Direct Production Cost Overview 2000 tons/year 6000 tons/year

Item Notes Unit Quantity Unit Cost Total Cost Cost/kg fish Quantity Unit Cost Total Cost Cost/kg fish

Feed Avg. FCR 1,2 kg/kg produced kg/year 2.400.000 € 1.30 € 3.120.000 € 1.56 62% 7.200.000 € 1.30 € 9.360.000 € 1.56 71%

Energy kWh per year, excl. Oxygen kWh/year 5.786.291 € 0.10 € 578.629 € 0.29 11% 10.821.714 € 0.10 € 1.082.171 € 0.18 8%

Oxygen Assumes O2 generator 1kW/kg O2 kWh/year 1.200.000 € 0.10 € 120.000 € 0.06 2% 3.600.000 € 0.10 € 360.000 € 0.06 3%

Water Discharge Discharge to Sewage Comp. m3/year 192.000 € 0.20 € 38.400 € 0.02 1% 576.000 € 0.20 € 115.200 € 0.02 1%

Eyed Eggs Est. 20% mort #/year 533.333 € 0.10 € 53.333 € 0.03 1% 1.600.000 € 0.10 € 160.000 € 0.03 1%

Labor Average staff wages EUR/year 10 € 56.300.00 € 563.000 € 0.28 11% 14 € 56.300 € 788.200 € 0.13 6%

Maintenance Est. 2% of equipment cost EUR/year 2% € 10.609.760 € 212.195 € 0.11 4% 2% € 19.062.460 € 381.249 € 0.06 3%

Vaccinations EUR/year 453.333 € 0.06 € 27.200 € 0.01 1% 1.360.000 € 0.06 € 81.600 € 0.01 1%

Insurance Est 4% of stock value EUR/year 1.000.000 € 0.10 € 101.200 € 0.05 2% 3.000.000 € 0.09 € 266.400 € 0.04 2%

Chemicals (pH control) EUR/year 2.000.000 € 0.02 € 40.000 € 0.02 1% 6.000.000 € 0.02 € 120.000 € 0.02 1%

Miscellaneous Unexpected etc. EUR/year 1 € 200.000 € 200.000 € 0.10 4% 1 € 400.000 € 400.000 € 0.07 3%

Total Budget Cost € 5.053.958 € 2.53 100% € 13.114.821 € 2.19 100%

Production costs for 6000t and comparison with 2000t excl of depreciation and financing

Cost delivered to market HOG

• Direct OPEX costs € 13.200.000 € 2.19/kg (€2.53/kg)

• Depreciation 15 years € 2.466.667 € 0.41/kg

• Financial costs 10 years 5% € 4.920.000 € 0.82/kg

• Total OPEX whole weight fish € 3.42/kg

•

• Price HOG (88% yield) – 5.280.000kg € 3.89/kg

•

• Processing (€ 0.30/kg) + Freight (€ 0.20/kg) € 0.50/kg

•

• Total cost to market (Cologne from mainland Europe) € 4.39/kg (€ 4.77/kg)

•

(2000 tons)

ROI% with price delivered to market of € 4.39 HOG

Sales price ROI% on € 12 mio private equity (2000t)

€ 4.84/kg* 19.9% (2.9%)

€ 5.50/kg 48.0% (31.9%)

*Average price achieved Bologne for 2014.

What does the future hold?

0

5

10

15

20

25

350 420 504 605 726 871 1 045 1 254 1 505 1 806 2 167 2 601 3 121 3 745 4 494 5 392 6 471 7 765 9 318 11182

13418

16102

19322

23187

27824

33389

Production (mt/year)

Scale vs CAPEX development

Kuterra €17/kg

CA

PEX

€/k

g p

rod

uct

ion

6,000 tons

Source: Gary Robinson

€6.11/kg (€5.50/kg)

Existing and planned large scale projects € 7-10.50/kg

It looks promosing, but CAPEX costs are, despite potential for

profit, still relatively high

Cost delivered to market HOG

• Direct OPEX costs € 13.200.000 € 2.19/kg (€2.53/kg)

• Depreciation 15 years € 2.466.667 € 0.41/kg

• Financial costs 10 years 5% € 3.661.006 € 0.82/kg

• Total OPEX whole weight fish € 3.42/kg

•

• Price HOG (88% yield) – 5.280.000kg € 3.89/kg

•

• Processing (€ 0.30/kg) + Freight (€ 0.20/kg) € 0.50/kg

•

• Total cost to market (Cologne from mainland Europe) € 4.39/kg (€ 4.77/kg)

•

(2000 tons)

On the horizon?

The new Concentric Tank Concept (CTC)

Concentric Tank Concept CTC

0

5

10

15

20

25

350 420 504 605 726 871 1 045 1 254 1 505 1 806 2 167 2 601 3 121 3 745 4 494 5 392 6 471 7 765 9 318 11182

13418

16102

19322

23187

27824

33389

Production (mt/year)

Scale vs CAPEX development

Kuterra €17/kg

CTC 560 tons

CA

PEX

€/k

g p

rod

uct

ion

6,000 tons

Source: Gary Robinson

€ 6.11/kg€4.42/kg

Existing and planned large scale projects € 7-10.50/kg

Conclusion

Things are happening at the moment in RAS developments for land based salmon producton, and

they are happening fast. We are in principle there, both technically and financially. There are a couple of

biological challenges still to overcome, early maturation and geosmins (off-flavour). These are also

on the brink of being solved.

What is happening here will spill down the line for other fish species in RAS– all thanks to the salmon.

Thank you for your attention

INTER AQUA ADVANCE A/S