Upping Cold Storage Capacity

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pp 80-81With the Faroe Islands strategically located to provide services for international vessels — and the country’s total cold storage capacity soon to exceed that of Iceland — cold store Bergfrost looks to scale up its capacity to 25,000 tonnes.

In a tunnel complex situated right at Fuglafjørður’s fishing harbor, the Faroe Islands’ largest cold store is packed to the roof with frozen produce. There is a fair amount of turnover with goods going in and out of the facility on a daily basis; however for the time being, the space squeeze seems all but permanent.

The booming pelagic fisheries around the Faroe Islands have generated new business for many, including cold stores such as Bergfrost. Indeed since the neighboring freezing plant Pelagos opened last summer (2014), Bergfrost has had to turn down a growing number of clients for lack of available storage space.

The surge in demand has made the acquisition of additional storage capacity a top priority, according to Bergfrost managing director Símin Pauli Sivertsen.

Only a couple of years ago, the facility had a technical upgrade along with a significant capacity extension to enable it to store 16,000 tonnes of frozen goods compared to 7,000 tonnes previously; but that was before the arrival of the freezing plant next door.

Mr. Sivertsen said that the cold store can be further expanded inside the tunnel complex by taking over the three remaining tunnel branches which are still not part of the facility and which are currently being used for dry storage by another tenant — a plan that will almost double Bergfrost’s cold storage capacity.

“We have reached an agreement with the owner and the tenant regarding our purchase of the last three tunnels and are in the process of working out the final details of it,” he said. “I hope we’ll be able to proceed within the coming months, and we understand the main issues pending are being resolved as part of the harbor development that is taking place this year. The sooner that work is completed, the sooner we’ll hopefully be able to take over the tunnels and integrate them with the cold store. This will mean a whole lot for our ability to serve our existing clients and new ones as well — this will certainly make a difference as our storage capacity will be extended to at least 25,000 tonnes.”

‘One of the safest’

Mr. Sivertsen believes the Faroe Islands has a competitive advantage as a geographic location when it comes to providing services for an international clientele of fishing vessels — and with the country’s total cold storage capacity today on par with that of Iceland, at approximately 70,000 tonnes, the groundwork is being laid to attract more international business.

“As a country we already have a competitive edge because of our location along major shipping lanes in the North Atlantic. The problem right now is that our total cold storage capacity of about 70,000 tonnes doesn’t leave much room for further growth in this sector.

The booming pelagic fisheries have had a huge impact and worked as a catalyst. Now additional capacity will doubtlessly make things easier—after all, we must expect some volatility in the fisheries and in the long run we cannot rely only on the domestic market. Apart from that, managing logistics in the optimum way will still be one of the key challenges.”

With a handful of fairly large cold storage facilities scattered around the islands, there is a certain level of domestic competition.

A significant proportion of the market, however, is international — foreign vessels calling at Faroese ports.

“The real competition is the large facilities in Continental Europe, in places like Rotterdam,” Mr. Sivertsen said. “For us to be able to offer a viable alternative, we need high capacity — high volumes of storage means low power consumption per tonne of stored goods. I think we’ll be quite competitive and the way this cold store is insulated by mountain rock is an advantage in that respect. We’ll be in the top international league and our storage capacity will be high enough to meet the requirements of some of the clients that we’ve had to turn down; in fact we’ve stayed in contact with several of them over the last couple of years. Many Russian shipowners have expressed their interest and there are also, for example, Icelandic, Greenlandic, Irish and Scottish trawlers that call at the Port of Fuglafjørður ever so often.

“So instead of having all this frozen fish moved down to say, the Netherlands for storage before final processing, we can store some of it in the Faroes. Operationally, our facility is one of the the safest in the world.”