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Infrastructure development, innovation to drive Pelagia's future UK growth

Innovation and technological development is the company's way to invade new markets, exec tells IntraFish.

Despite challenges with raw material availability, the UK subsidiary of Norwegian harvesting and processing company Pelagia plans to maximize yields by focusing on infrastructure, innovation and developing new markets.

The feed ingredient provider saw a 2 percent drop in year-on-year earnings before interest, tax, depreciation and amortization (EBITDA) at nearly NOK 100 million (€10.1 million/$11.3 million) in the first quarter of 2019.

The minimal loss came alongside a significant 20 percent slide in volumes of fishmeal, totaling at 17,051 metric tons sold in the first quarter.

However, Pelagia also saw operating revenues climb 12 percent to NOK 82.2 million (€8.3 million/$9.2 million) in the same period.

The company is developing new techniques to improve efficiency and maintain sustainable yields, but there is no denying a general trend in a reduction of raw material, Financial Director Michael McEllone told IntraFish at the company's Grimsby-based factory, which has the capacity to process roughly 300 metric tons of raw material a day.

Pelagia holds a unique position in the area due to the fact that it processes by-products, Mike Hryckowian, general manager of the Grimsby operation, told IntraFish during a factory visit, but at the moment the factory is only running at half capacity.

dabe0c787076f230e740a395a34f1d1d The storehouse for feed at Pelagia, Grimsby factory, isn't being used to full capacity at the moment. Photo: Nina Unlay

Grimsby contributes around 2.5 percent to the group's overall production and sales.

Half of the raw material from the Grimsby operation is sourced locally, but the majority still comes from within the United Kingdom and is then sent out to the UK market.

The possibility of a no-deal Brexit present challenges on many fronts, such as the uncertainty of tariffs and increased competition, "but also opportunities," said McEllone.

"The UK will take responsibility for its own fisheries policies, setting total allowable catches, and with these assumed responsibilities it is still unclear how this will develop, in particular how access rights will be negotiated post exiting the EU," he said.

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