The Self-inflicted Wounds of Nordic Aquafarms

 This piece was recently published by the Anderson Valley Advertiser in Humboldt County, California.

The Self-inflicted Wounds of Nordic Aquafarms

It's been a tough year for almost everyone, but 2020 has been particularly hard on Nordic Aquafarms, the Norwegian company that wants to build a $400 million industrial land-based fish farm on the Samoa Peninsula in Humboldt Bay.

In March, Nordic made a surprise announcement that it was converting its commercial production unit in Fredrikstad, Norway to a “research and training” facility. The company has been tightlipped about the reason behind the sudden change, but the move might have been less than entirely voluntary.

As a Maine-based journalist, I have been covering Nordic Aquafarms since the company's February 2018 announcement of plans to build a $500 million industrial land-based fish farm in my small town of Belfast, Maine, population 6,700. Before the sudden March 2020 announcement of the Fredrikstad conversion, I was unaware of any Nordic statements about creating a research or training facility in any of the three countries where Nordic operates: Norway, Denmark and the United States.

Indeed, six months after the surprise Fredrikstad announcement, Nordic's website still said its Fredrikstad plant “has complete grow-out infrastructure and on-site fish processing” and “will deliver its first high-quality salmon to selected European customers in Q2 2020.” There is no mention of research or training at any of its facilities.

Hinting at possible reasons behind the Fredrikstad move to research and training, salmonbusiness.com quoted Nordic CEO Bernt Olav Rottingsnes as saying: “We see that on the equipment side it is not worthwhile to buy the cheapest equipment when the facility will last for several years. The facility is characterized by some of the equipment being on the cheapest side.”

According to a plant neighbor I spoke with in Fredrikstad in September 2018, one of the two buildings designed to hold Nordic's massive fish tanks now lies idle.

Rottingsnes' statement raises again longstanding questions about Nordic's overall competence in building and running large-scale industrial fish farms. If Nordic's Fredrikstad plant is plagued by problems arising from cheap equipment, why did Nordic choose such equipment in the first place? Land-based fish farms are capital-intensive projects that require years of operation to recoup initial construction costs. Nordic says its proposed plant in Belfast, Maine will be operational 20-30 years. Was Nordic unaware that its Fredrikstad plant needed durable equipment?

But Nordic's Fredrikstad plant has been plagued with problems since before its construction was even completed. Nordic sued Graakjaer, the plant's Danish construction firm, alleging Graakjaer should have known the site's soil couldn't handle the plant's weight, a fact that became apparent when the plant's buildings started sinking into the ground. Graakjaer then countersued Nordic, alleging that Nordic should have known the site was unsuitable. A lower court found for Graakjaer, awarding Graakjaer 2.2 million euro, and the case is now on appeal.

Another possible reason for Nordic's Fredrikstad woes is financial difficulty. As of February 11, 2020, Nordic had only $8 million on hand - that's less than one percent of the $900 million it needs to build the two industrial land-based fish farms it has proposed for Maine and Humboldt County. The Maine and California projects combined would amount to about 10 times the planned production level of Fredrikstad, and it's possible Nordic is concentrating its limited financial resources on its U.S. projects.

Adding to Nordic's financial challenges is a recent, apparently coronavirus-related plunge in European prices for farm salmon. From mid-June to mid-July Europe's wholesale price for farmed salmon plummeted a whopping 43 percent. Trade journals have linked the price collapse to countries closing their borders to fresh fish, over COVID-19 concerns.

Even if prices recover, such volatility could send would-be Nordic investors fleeing for the exits.

And then there's Nordic's problems with its Fredrikstad neighbors. A residential neighborhood organization has formed specifically to fight Nordic over its Fredrikstad noise levels, which violate county laws. According to neighbors of the plant I interviewed in September 2018, Nordic told them pre-construction that the plant would be “silent,” but county officials have cited Nordic for violating noise limits and have ordered Nordic to fix the problem.

One plant neighbor I spoke with in 2018 says the Fredrikstad plant's noise violations stem from a giant fan placed at the end of one of two fish-tank buildings to ventilate the building. The fan is on a side of the building that faces the residential neighborhood now fighting the plant. The plant neighbor says plant workers he has spoken with have shrugged, shaken their heads and said the fan could just as easily go on the other side of the building, facing an industrial park instead of facing a residential neighborhood. This failure raises yet more questions about Nordic's competence.

On August 29, I emailed Erik Heim, head of Nordic's U.S. operations, about these challenges facing Nordic in 2020, but Heim hasn't responded. In 2018, Heim told me Nordic would no longer speak with me because I don't appreciate the wonderful opportunity Nordic represents for the people of Maine.

Heim's right. I don't.

Lawrence Reichard is a freelance writer and editor who splits his time between Maine and Latin America.