August 23, 2023

 

Proximar Seafood completes salmon RAS facility construction, nears full production

 

Proximar Seafood, the company behind a state-of-the-art salmon recirculating aquaculture system (RAS) facility in Shizuoka Prefecture, Japan, has announced the completion of the Shizuoka facility's construction in its Q2 performance results, Seafood Source reported.

 

Having commenced operations at its premises in October 2022, Proximar Seafood is currently engaged in the cultivation of five distinct batches of Atlantic salmon within its RAS setup. The latest announcement from the company affirms the successful acquisition of the facility's land, culminating in the resolution of the seller credit and the official transfer of ownership to Proximar Ltd. This strategic development has not only curtailed financing costs but is also aligned with the company's original blueprint.

 

As Proximar chief executive officer Joachim Nielsen explained during the results briefing, the second quarter has been marked by intense activity. The land procurement was facilitated by the initial tranche of bank debt, amounting to JPY 8.8 billion (~US$60 million; JPY 100 = US$0.69), generously extended by Mizuho Bank, Shizuoka Bank, and Development Bank of Japan. To fortify its financial position, the company has also secured funding through a private placement yielding NOK 74 million (~US$6.9 million; NOK 10 = US$0.94) and a shareholder loan from Grieg, totaling NOK 104 million (~US$ 9.7 million).

 

Nielsen noted the steady progression of the facility's development and installation of equipment. He said he is pleased to that the company is approaching the completion of construction and equipment installation of its 5,300-tonne facility after many years of planning and more than two years of construction activities. Presently, the company's nursery hosts fish in eight of its tanks, each exhibiting commendable growth.

 

As the company's facility approaches its final stages, Nielsen emphasised the compelling prospects for Atlantic salmon production in Japan. The high transportation costs within Japan bolster the appeal of domestic production. With an annual consumption of 40,000 metric tons of fresh Atlantic salmon, transported predominantly via costly air freight,

 

While the Q2 financials for Proximar underscore its status as an emerging player in aquaculture, with no revenue generated during the quarter, it is evident that the company is steadily advancing. Operating expenses for the facility surged to NOK 13.4 million (~US$ 1.26 million), reflecting a notable increase from the NOK 6.7 million (~US$629,000) recorded in Q2 2022. This upswing is attributed to heightened operational activities.

 

Proximar posted a loss of NOK 13.7 million (~US$1.2 million) for the quarter, an outcome chief financial officer Ole Christian Willumsen regarded as in line with expectations, influenced by amplified activity and escalated personnel costs as the company expands its workforce. Willumsen said that personnel costs make up about 60% of the operating expenses.

 

The company's assets have experienced an impressive doubling in value over the past year, soaring from NOK 554 million (~US$52 million) in Q2 2022 to NOK 1.1 billion (~US$1.2 million) at the end of Q2 2023 on June 30. Willumsen said that more than 90% of this value corresponds to land, assets under construction, and associated equipment.

 

Looking ahead, Proximar Seafood is forging ahead with confidence. The company anticipates the completion of the grow-out building by Q3, with continuous biomass development at the heart of its strategic goals. Nielsen said the company is on track to meet their planned production growth.

 

-      Seafood Source