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Skretting shutting down UK feed operations

Oversupply and Marine Harvest's plans to open a salmon feed plant in Scotland prompt decision to close facilities.

Nutreco-owned aqua feed giant Skretting announced plans to shut down its operations in the United Kingdom by April 2019 amid a salmon feed market oversupply.

“Unfortunately, we are experiencing unsustainable market conditions in the United Kingdom," Skretting said.

According to Therese Log-Bergjord, CEO of Skretting, a general overcapacity in the salmon feed sector in Northern Europe makes the market highly competitive for feed producers.

“We at Skretting want to remain competitive, and to do that we have to adjust our capacity," Log-Bergjord told IntraFish.

"We believe by doing this we will correct the situation of oversupply significantly.”

The company started a consultation process with employees that is expected to be finalized before the end of the year. The move would lead to the closure of two plants, a warehouse, an office and around 100 layoffs.

“There is still time; the plan is to continue production until the end of April, so there is time to do the right thing with workers,” Log-Bergjord. "I want to stress that this is a priority and we will do the right thing."

In a press release about its plans, Skretting said a new large feed plant becoming operational in Scotland in early 2019 will lead to an overcapacity in the region, exceeding the total market by more than 50 percent.

Marine Harvest plans to open this facility in early 2019 to be self-sufficient in feed production and supply other farmers. This was a factor behind the decision, but not the only one.

"The main factor is the general oversupply. The salmon feed market in Europe is highly competitive, and we are proposing to take the current overcapacity out of the market," Log-Bergjord told IntraFish.

Skretting produced 100,000 metric tons of feed in the United Kingdom in 2017, mostly Atlantic salmon and trout feed.

The move is expected to reduce supply, but the company does not expect it to have a major impact on overall sales for Skretting, since it plans to continue to supply clients in the United Kingdom where economically viable.

"We have many important customers in the UK, we could lose one large important client there and this would have an impact because we currently hold one-third of the salmon market in the United Kingdom, but in global terms this is not that significant for Skretting,” Log-Bergjord said.

With logistic improvements, transport of feed to Scotland is becoming easier and more cost-efficient, and Skretting would be able to supply the United Kingdom from other operations in Europe or Norway.

“We have additional capacity to do so," Log-Bergjord said.

"This is a tough decision for Skretting’s management team and our owner, Nutreco, considering the implications for our local employees and partners,” the company said.


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