Cod farmer wins major supply contract

The Norwegian cod farming company Statt Torsk said it has won a large new fish supply contract worth around NOK 70 million – almost £6m.

The name of the customer has not been disclosed but it is thought to be familiar with the ground breaking work Statt Torsk is doing in relation to cod farming. Deliveries will start in September and the content of the agreement means that approximately 1,600 tonnes (whole fish equivalent) of initiated production has been sold.

It is not just salmon which is hitting high prices. Sea-caught cod prices are currently at record levels and likely to go even further as northern hemisphere quota cuts loom. The price spiral is also creating a huge headache for Britain’s fish and chip shops – the majority of which use cod – which are also facing soaring energy bills. While cod farms will help, they cannot match the huge amounts of fish caught at sea.

Gustave Brun-Lie, CEO of Statt Torsk ASA, said in a statement to the Oslo Stock Exchange at the weekend: “This is a significant agreement with a customer who already knows the company and our fish.

“It is good for both the company and our new industry to get confirmation of the quality of farmed cod, especially with a customer who has high demands on both product and supplier.”

He continued: “Although we will never be satisfied with the price we achieve, the agreement represents a good increase compared to last year’s price achievement.

“The security that follows an agreement with such a customer is also important for the Company’s development in unstable times. Now we see the result of the changed production cycles from 18 to 30 month.”

The agreement will involve two weekly deliveries and approximately 30% of the company’s initiated and expected production.

Statt Torsk recently entered into an agreement for financing of NOK 35m (almost £3m) for the build-up of inventories to be able to carry out weekly deliveries of cod from this September.