More Production, More Options

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More Production, More Options pp 38-39

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More Production, More Options pp 38-39Five years after delivery, the Norðborg’s stellar performance continues undiminished with production increasing as the larger Christian í Grótinum starts to emulate the concept — while the Pelagos processing facility opens another door.

Back in 2009, Hvalnes took delivery of what was believed to be, and still might be, the world’s most advanced fishing vessel of its kind — Norðborg, a purse seiner/pelagic trawler equipped with a sophisticated factory, able to produce and plate-freeze a wide range of fish products at sea while turning the offals into fish meal and fish oil; the ship also has refrigerated seawater tanks for the option of leaving processing to land based facilities.

With a price tag 250 million DKK (33.5 m EUR), the Norðborg was a very substantial investment for the Klaksvík-based family business.

It didn’t take long, however, for the ship to prove its worth as it brought in load upon load of frozen produce ready for export — generating annual gross revenues of a similar size as the investment amount.

A key element in the equation is integration, backed by information and communication technology, with Hvalnes’ head office located in the same building that houses the cold storage facility mostly used for the Norðborg’s catch, at Klaksvík’s North Quay.

“The IT system on the ship helps them keep track of of their catch,” said Managing Director Eyðun Rasmussen. “Every haul is registered into the system and so is every box of produce in the hold.”

By knowing exactly what is in the hold of the ship at any given time, the people on land save time and effort, and keep customers informed.

“When the boat comes to shore we’ve already made arrangements with our clients,” said sales manager Pól Huus Sólstein. “The system enables us to coordinate the process very efficiently, not least between the hold and the cold store. It allows us to communicate effectively with our clients, as we can alert them of any noteworthy developments or potential issues early — well before the hold is unloaded.”

Alternatives: With the experience gained from the Norðborg, Hvalnes decided to sell the old Christian í Grótinum, a purse-seiner/pelagic trawler with RSW tanks and no factory, and replace it with a factory-equipped vessel. The replacement, which came into operation in May last year (2013), named the Christian í Grótinum, has many of the same capabilities as the Norðborg however with a lesser degree of versatility — but mind you, it’s an even larger vessel, 84 meter, and a magnificent one as well.

A year on, the investment looks sound.

“This is an excellent ship,” Mr. Rasmussen said. “We use many of the same procedures and programs that were originally developed for the Norðborg and things have been working well. We expect her to produce many thousands of tonnes.”

Although both vessels have factories and can produce the very best quality available — the fish is processed and frozen within only a few hours after being caught — there are situations where time and quantity become critical factors and the economically viable thing to do is pouring the catch into the RSW tanks and heading to shore to have it landed. But again, there are moments when market conditions make many skippers decide to do exactly that. Among the basic questions: how far to steam to the nearest land-based freezing plant, and how long waiting time before actually getting the catch landed.

Now, Fuglafjørður is a frequent port of call for the Norðborg and Christian í Grótinum, as for many other pelagic vessels. People in the pelagic industry have had the ambition for many years to build a processing plant there for pelagic food fish to complement the Havsbrún fishmeal factory. Earlier this year, a final plan was put together as a group of investors committed to see the Pelagos facility built and commence business by July — Havsbrún, Framherji and Hvalnes alongside a group of smaller shareholders.

“We have taken an interest in Pelagos because we see it as a natural extension of what we are currently doing,” Mr. Rasmussen said. “We believe we have an excellent business model so we will continue to focus on our concept freezing at sea. On the other hand, there should always be alternatives for special situations and that’s way it makes sense for us to have privileged access to an onshore freezing plant.” Market conditions, meanwhile, have not been too favorable in the last year or so with EU imposing trade sanctions on the Faroes over disagreement on the management of herring fishing rights.

“The recent agreement on mackerel was a positive thing,” Mr. added. “It’s regrettable, though, that the boycott on herring is still on. Nonetheless, I believe they will have it sorted soon.”