Heavy losses, overproduction and bankruptcies are dominating the Norwegian fish and salmon farming market.
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Expert remedies discussed in local media include mergers to consolidate the battered market, freezing supplies to raise prices and accepting major losses to increase a grip on the market.
The top 20 fish breeding companies lost NKr4bn (US$554m) last year, and forecast more of the same for 2003, according to newspaper Bergens Tidende. Two investment companies declared bankruptcy last week after Pan Fish shares plummeted, leaving Den norske Bank (DnB) to absorb a NKr100m loss on salmon.
BT cited Nordea’s industry specialist, who believes firms must merge or form binding agreements to regulate production as banks move in to take control of ailing companies.
Analytical consultancy ECON told newspaper Aftenposten that the current market crisis is following the scenario of its 2001 report “Marine Norway in 2020”. ECON considers freezing a percentage of supplies as a temporary measure that will only provide momentary relief for cash-strapped firms. It recommends an aggressive sale of existing stock, risking accusations of dumping and possible punitive tariffs.
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By GlobalData
ECON analysts reckon that freezing stocks would put Norway in a position of taking responsibility for the market, and would lead to higher salmon prices and increased production from competitor nations, notably Chile.
One of the core problems for Norway’s salmon industry has been a lack of ability to brand production, with Scottish salmon labelled and viewed as a quality item, while Norway’s fish is anonymous and volume-oriented, ECON analysts said.
