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Skretting CEO: ‘We'll continue to be the leading feed supplier to the salmon market’

The proposal to close the UK operation is far from being a step away from salmon, top exec told IntraFish.

Skretting’s plan to close the company's UK operations is expected to help the firm optimize production at other locations while responding to market needs, Therese Log-Bergjord, CEO of Skretting, told IntraFish.

The company announced plans to close two production plants in the United Kingdom, one in Invergordon and the other one in Longridge, as well as a warehouse and an office, by the end of April 2019.

The move comes as Marine Harvest plans to open a feed plant in Scotland that would result in a feed surplus in the region of an estimated 50 percent.

Skretting shutting down UK feed operations

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“We do not see any growth in the salmon market in terms of volume, or at least the growth will be minimal. So, of course, any additional supply of feed will impact the market,” Log-Bergjord said. “We want to remain competitive and our proposal is to adjust production to the market capacity.”

The move is far from being a step away from the salmon market, Log-Bergjord said. On the contrary, Skretting will continue to develop salmon feed production through investment in research and development (R&D) and efficiency optimization.

“At the moment we are engaging with clients in the United Kingdom to see how we can continue to work together going forward,” Log-Bergjord said.

“We have available capacity at other sites to supply UK farms from Europe or Norway, we have many important clients in the region.”

In terms of impact, Skretting expects the move to lead to a reduction in volumes of less than 4 percent.

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In addition, the company is confident that this is a very particular circumstance and that the move is an isolated measure to compensate for a problem in Northern Europe.

“In general, there is a significant amount of oversupply in the salmon feed market in Northern Europe. We are definitely not proposing a similar move in any of the other area,” Log-Bergjord said. "Around 90 percent of the feed supply is in the free market, not integrated as part of a salmon company.”

Skretting has diversified into new markets and species over the past decade. Ten years ago, 80 percent of the company’s production was salmon feed, and now it makes up for 50 percent of its production with 1.4 million metric tons.

“We will continue to have a significant presence in the salmon market, and we also see growth opportunities in other regions and for other species,” Log-Bergjord said.

“In terms of volumes, we see opportunity to grow in Asia and Latin America, but our growth strategy also focuses on R&D and efficiency.”

The company produced 100,000 metric tons of feed, mainly for Atlantic salmon and trout, at the UK operation in 2017, holding one-third of the market.

The company opened a consultation period that will be finalized by year end. The closure of the business will result in approximately 100 layoffs, the company said.

“There is time to do the right thing, our workers are a priority and we will do the right thing in this sense.”

The closure of the operation is subject to the outcome of the consultation period Log-Bergjord said, and it is still unknown what would happen with the facilities.

"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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