Smoked salmon produced by Tassal. (Photo: Tassal)

Tassal reveals investment plans for its expansion

AUSTRALIA
Friday, March 03, 2017, 01:20 (GMT + 9)

Salmon producer Tassal has revealed expansion plans for the next three to five years, which would help the company achieve its target of an extra 3,000 tonnes of salmon harvested per year.

The firm’s representatives unveiled these growth initiatives in a release to the Australian Stock Exchange, including the following investments:

• About AUD 53 million (USD 40 million) to establish operations at Okehampton Bay and oceanic sites at Storm Bay;
• AUD 95 million (USD 72 million) investment in improved net technologies and new feeding barges to improve salmon survival rates and feed conversion;
• AUD 38 million (USD 29 million) to accelerate growth in fish biomass;
• About AUD 16 million (USD 12 million) to automate production and increase processing capacity.

Therefore, the Tasmania-located firm has requested a trading halt while it announced its plans to the market and raised AUD 100 million (USD 76.6 million) capital.

As outlined by financial analyst Sam Baker, the company is now looking to sell more into higher margin wholesale markets, which, in his view, is a sign of confidence from the company that they are looking to increase production.

With the collected capital, Tassal intends to fund new aquaculture farms to try to offset the loss of young salmon in Macquarie Harbour, The Australian reported.

Meanwhile, the owner of the Tassal, Superior Gold, Tasmania Smokehouse and De Costi Seafood brands recently announced it would almost halve the number of fish put into Macquarie Harbour to around one million over the medium term.

The decision comes after Tasmania's environmental regulator in January ordered Tassal destock its Franklin lease in Macquarie Harbour, after finding 14 non-compliance issues.

In November, Tasmania's Environmental Protection Agency advised salmon leaseholders in Macquarie Harbour that it would reduce the number of salmon allowed in the harbour, after a report showed marine fauna in the vicinity of the salmon farms had declined.

The group expects the investment to boost revenue and operational earnings from 2017/18.

The firm has also secured new credit facilities with Rabobank, Westpac and Bankwest to "further strengthen" its balance sheet and lower its risk profile.

Related articles:

- Tassal joins legal battle on the Tasmanian govt. side
- Tassal ordered to destock a salmon farming centre
- Huon initiates legal actions against Tasmanian government
- Regulating entity recommends salmon biomass cut in Macquarie Harbour

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