The business community of Klaksvík, the second-largest town of the Faroe Islands, shows no signs of pulling the brakes on growth and optimism despite signs of some dark clouds gathering in the wider economic environment.
Famous for its energetic culture of entrepreneurship and self-sufficiency, and known as the ‘Fishing Capital’ of Faroe, Klaksvík is per tradition home to a sizable portion of the commercial fishing fleets of the island nation. Notably, the brand new 81-meter freezer trawler Gadus has recently been delivered to Klaksvík-based owner JFK, one of the country’s leading fishing companies. No wonder that delivery was proudly celebrated as the vessel—one of the world’s most advanced of its kind—arrived in Klaksvík on October 15th, 2023.
Amidst the upbeat festivities, however, an aura of uncertainty over fishing rights in the Barents Sea was lurking. The Gadus is one of three new, state-of-the art freezer trawlers delivered to the Faroese fishing industry of late, at a total cost of around 1.2 billion dkk (160 million eur), all of them dependent on the availability of catch quotas in the Russian sector of the Barents Sea; yet these long-held fishing rights could be in jeopardy amid political disputes.
Despite such conditions in the larger environment, the spirit of Klaksvík is one of courage, optimism, and energetic entrepreneurship.
Over the years the port town has seen a number of industrial firms and service providers evolve, primarily centered around wild fisheries and fish farming. Since the 2006 opening of the Northern Tunnel (Norðoyatunnilin)—the giant undersea road connection between Klaksvík and Leirvík across the bay on the island Eysturoy—the integration into the so-called Main Area has made the business scene more dynamic and diversified even as the sociocultural landscape may have been rejuvenated.
“One advantage for Klaksvík as a business location is the fact that people here in general are readily accessible for interaction despite the relatively large size of the town,” said Árni Skaale, founder and owner of LookNorth, a leading manufacturer of plastic products for the fishing and aquaculture industries.
“For matters of importance to any business in Klaksvík and its stakeholders—for example, decisions on some major investment—the municipal authorities tend to be open and interested in hearing your perspective. I think this culture helps facilitate natural adjustments to say, business development plans, which can be very important. This town is quite fast paced and large enough to offer at the local level much of what businesses and people need on a daily basis and it has a rather quick pulse, yet it retains much of the charm and easiness of a small village.”
The signs of busy small and microsized enterprises is an ever-present feature of life in Klaksvík and the Municipal Council has in recent years undertaken several large development projects to upgrade the downtown area, for instance.
Here the Biskupstorg has transformed the central area of Klaksvík and added a metropolitan aura with modern architecture, walkways, cafes and boutiques. In the nearby vicinity, an impressive new arts and cultural venue, Varpið, was inaugurated in September 2023.
In the same area the ambitious new Hotel Bisk—a 150M dkk (20M eur) investment led by CIG, Klaksvík’s other major fishing business—is currently under construction, scheduled for completion in 2025.
To accommodate more business growth and expansion, the Council has developed a large area known as Undir Hamri, near the entrance of the Northern Tunnel, for industry, trade and commerce. According to Mayor Karl Johansen, seven companies have purchased pieces of ground in the area for development, with LookNorth taking 9,000 square meters.
“We’re squeezed for space and need to expand before long,” Mr. Skaale said. “We consider Undir Hamri a great location not least in light of logistics considerations.”
“When we started this business two decades ago, our primary market was the local fishing and aquaculture industry,” he added.
“Today our market is everywhere in the Faroes, and so Klaksvík is not any longer our largest market segment geographically speaking—the undersea tunnel has broken a lot of barriers, both physical and psychological.”