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"Aquaculture, not the Internet, represents the most promising investment opportunity of the 21st Century."

- Peter Drucker, Management Expert & Economist


Atle Eide: Norge sakker bagud

Why aren't more Norwegian seafood companies investing in new species and smarter distribution?

For anyone who has spent more than a few years in the aquaculture industry, fluctuating prices, disease and dumping duties should come as no surprise.

They are simply part of the business, and will always be issues fish farmers will have to face. That is why it is surprising when a few disappointing quarterly earnings presentations and downcast media columns make the entire industry forget just how promising its outlook is for the future.

In the entire global food industry, aquaculture and seafood are among the branches enjoying the most growth. Fish farming and value-added seafood processing will be huge winners over the next decade.

Nevertheless, the industry is completely spooked by the issue of disease -- which has always been around, and will always be around.

Naturally, the conditions in Chile deserve salmon companies
' full attention, whether Norwegian or Chilean owned. Pancreatic disease (PD), too, is a very serious threat as it has a "knock-on" effect, hitting farm after farm along Norway' s coastline. But the true stakes are at the global level. In that arena, it appears Norwegian companies are simply avoiding the game altogether.

Strike while iron is hot

Major global seafood companies are changing ownership and the foundation of the future seafood industry is being laid down. Yet not even the most visionary Norwegian companies are taking advantage of the shifting sands to establish themselves at the top of the new global order.

It is difficult to comprehend: a country thats overflowing with capital, where seafood expertise is second to none, and where all driving forces should be in excellent order.

There will be two winners in the seafood industry's future - the primary producers and the end

distributors. It is clear prime fish farming real estate and clean water are global commodities that will soon be in short supply. So companies with control over production licenses will be guaranteed good profits over the long run.

The other obvious winner will be companies that have control over advanced value-added process production - convenience food producers, supermarket and restaurant distributors, and possibly even brands themselves.

Other players - feed suppliers, equipment makers and others - will have to make do in the periphery of the industry.

Over time, the super profits will be the sole reserve of primary producers and end distributors.

Norway sitting on its hands

With regard to primary production of salmon, Norwegian companies are out in front. Yet it has taken far longer than I ever would have imagined for Norwegian companies to involve themselves in new aquaculture species emerging around the world.

There will never be a better time to stake out claims to the best positions. This is not a risk-free business, by any means, but the potential upside is enormous.

When it comes to value-added processing and distribution, there are no Norwegian companies even on the radar. It beggars belief, with all its capital and expertise, Norway has not carved out global positions in these sectors.

How can Norway - nation of investors and great seafood minds - not see the massive opportunities still available? How can the media, analysts and investors not see past the headlines regarding infectious salmon anemia (ISA) and PD? Why is it acceptable to let wide-horozon opportunities be clouded over by short-term or hum-drum challenges?

There is no other industry outside oil and gas that offers Norway such opportunities, and where its combination of capital and expertise is more needed.

In the global seafood industry, the train is departing from the station. The time to make a bid for the future of the seafood industry is now.


Source 2005 IntraFish Media AS

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