RISING tide for Irish aquaculture industry? Project would double – and more – salmon production – (As first published January 12, 2012)
An innovative Deep Sea Fish Farming project off the west coast of Ireland (near the Aran Islands in Galway Bay) – with a 15,000 tonnes organic salmon production capacity – is being proposed by the state agency BIM (the Irish Sea Fisheries Board) – together with the Marine Institute’s scientific expertise. If successful, the first of at least three such projects would create 500 jobs (350 direct + 150 in service jobs) representing €14.5 million in annual wage bill and €102 million in turnover at today’s salmon value. And others could follow with the potential to create thousands of jobs. With the Celtic Tiger on its knees, such an offshore fish farming boost would help a) create employment and exports for Ireland, and b) help quench the EU’s 30,000t undersupply of organic salmon.
SeafoodIntelligence interviewed BIM’s Aquaculture Development Manager, Donal Maguire, in charge of the ambitious project whereby BIM will apply for the licence before franchising it to a suitable commercial investor. Mr Maguire explains how the gestation period has been long and why the time is now deemed ‘right’. He outlines the expected timeline, adresses sustainability aspects, the broad scoping & public consultation process which has already been – & will be – taking place. Potential franchisee(s) will need an estimated investment of €40-50 million (NOK 300-400m/ US$50-65 m), for the marine farming phase of the project alone. “We have had expression of interest from the companies one would expect to make expressions of interest… The global salmon farming PLCs have certainly indicated interest in the project. We’ve also had interest from players in other parts of the world,” said Mr Maguire; some from continental Europe, but also as far afield as China… Meanwhile, the EIA/EIS should be lodged together with the formal application by early/mid-February 2012.
PS, December 22, 2015: in a December 21 statement, BIM CEO Tara McCarthy announced that the agency will no longer be proceeding with current ‘Deep Sea’ application for an aquaculture licence for a proposed 15,000 tonne organic salmon farm in Galway Bay. “[…] We must now re-assess our delivery of this project in the context of the new operating environment and examine the operational and commercial impacts. This will take time and a significant amount of engagement and consultation.” BIM has informed the licensing authority (the Department of Agriculture, Food and Marine) that it is withdrawing the current application.
Quick Facts about BIM’s Deep Sea Fish Farming project:
- 2010 total Irish farmed salmon production = 13,200 tonnes; 10,400t of which was organic-certified farmed salmon (80%). Despite its relatively small salmon production level (compared to Norway’s 1,006,009t & the UK’s 154,000t [2010 figures]) Ireland is one of the largest provider of organic salmon in the EU market (and in the world, for that matter…).
- The EU currently has an undersupply of organic farmed salmon of 30,000 tonnes (BIM/ Bord Bia estimates), particularly in France and Germany.
Selected excerpts from the scoping letter sent to stakeholders, copy of which has been seen by SeafoodIntelligence:
- Deep Sea Fish Farming project’s proposed production capacity: 15,000 tonnes p.a.
- Location: In the lee of the most southerly of the three Aran Islands, Inis Oirr.
- The farm will be composed of two isolated production units, each operating a ‘staggered’ production strategy (i.e. allowing for fallowing & biological security), whereby the same unit will be occupied from smolt to harvest without any movement of fish between the units.
- Each production cycle will last 2 years.
- Each production unit will contain a maximum of 36 circular plastic enclosures, each of 144 metre circumference with a net depth of 20m or equivalent, arranged in 3 x 12 blocks, with associated feed barges also moored on the site.
- The combined licence area for both units proposed is in the order of 500 hectares, i.e. approximately 0.6% of Galway Bay, with the aread occupied by the enclosures including anchors being 180 ha (0.22% of the Bay). Visible structures will be low-lying, of muted colour and will occupy <36ha (<0.05% of the Bay).
- “BIM does not intend to be the farm operator, but will retain ownership of the licence and offer it through a franchise agerement to a suitable operator. As a franchise manager, BIM will retain the licence for the State but will, through a franchise agerement, be able to carefully select the operator.”
- “[…] such issues as local community support programmes, local employment and training policies, extra environmental monitoring and compliance with other standards over and above the normal performance requirements can built into the franchise agreement.”
Quotes from the Irish Minister at the Department of Agriculture, Food and Marine (DAFM), Simon Coveney:
- “This is big business, it will be one of the biggest things to happen to the fishing industry in the last two decades. […] It is a new horizon for seafood production, and offers the chance for Ireland to become a world leader.” […] “We have been allowing ourselves to fall behind because we didn’t habe a proper licensing system. We now have that, and we are going to leapfrog over the competition in deep water farming.” (The Sunday Business Post, Nov. 6th 2011).
- “I am taking new initiatives to drive on new large scale deep water aquaculture which I see as a game changer in terms of Jobs and economic activity for our aquaculture industry and coastal communities” [… & speaking generally of the Irish seafood industry:] “Contrary to some people’s perceptions, this is an industry for the future and in my view we have only begun to tap into the potential of the Seafood Sector in Ireland. Irish Seafood exports increased in value, in 2010 relative to 2009, by 14 % to €378m. In the first seven months of this year they are up by a further 10% relative to the first seven months of 2010″. – part of the statement by Mr Coveney, who was officially naming and formally opening the new National Seafood Centre at Clogheen, Clonakilty, County Cork on November 25th 2011.
- See also: Minister Coveney Launches New Aquaculture Licence Templates (Irish Government press release, 05.12.2011).
- See also: Coveney Outlines Main Features of 2012 Estimates for His Department(Irish Government press release, 06.12.2011).
Q&A interview of Donal Maguire, Head of BIM’s Aquaculture Development Division, by SeafoodIntelligence.com’s editor, Bertrand Charron.
Q) SeafoodIntelligence: What brought about the project and how long have you been preparing it?
Donal Maguire:It goes back to the Farming the Deep Blue conference [NB: in 2004, see coverage below], we’ve had an interest for quite some time… We’ve been working away quietly in the background, waiting for the time to be right. There has been quite a long gestation period…
What makes the timing ‘right’, now?
The real thing that makes a difference is the really urgent need for employment and exports, in Ireland. The economic climate is so dire… and people finally realise the need to come up with economic activities that will employ people, particularly in the coastal regions. Because with the building boom there were really jobs for everybody and nobody was that intrerested in grasping the nettles and doing the difficult stuff that was required to get the big aquaculture projects off the ground. But they’re prepared to do it now. The time is right for all sorts of reasons, including the fact that demand for Irish organic salmon is so strong. That’s a big impact. The market is continually complaining that they can’t get enough organic salmon from Ireland. And then also, there is such an urgent need to create employments and exports that there is a greater willingness to actually accept salmon farms as there were before.
A massive backlog in licence application was a strong bottleneck for the development of the Irish salmon farming industry in recent years; Is there a new regulatory process which will make this project happen where others had failed?
There are no real changes. I think you are right to say that from an international perspective, what was regarded as the big bottleneck for salmon farming in Ireland was the difficulty in obtaining licencing. This is the big difference now: in this case, BIM with support from the Marine Institute will be both the applicant and the holder of the aquaculture licence. And thereafter we are going to seek commercial investors to be concession holders of this licence. We’re getting all the resources of the State to bear in getting through the licencing process.
But the bar is going to be set very high, we’re not getting any favours or cutting any corners. We have to achieve the same standards of application… of biological works as any other applicants would. And in fact, we would have to achieve higher standards… But because it is a state agency that is doing it, we can probably understand how to do that better than a commercial applicant. It is a difficult and complicated system. It’s a system with high environmental bars set into it, but we can achieve those.
How many years would you grant the licence for?
That would be a matter for negotiation with the potential franchisees. We don’t have a firm amount yet. But I would guess it would be in the region of at least 10 years to allow an investor to get a return out of their investment. It is going to be a big project and it is going to require a large amount of investments along the value chain to achieve this kind of production. So, on that basis, a ‘decent’ amount of production will be needed to allow an investor to recoup their initial outlay.
To your knowledge, has this been done somewhere else a) in terms of the scale of the project [15,000t production capacity] and b) the fact the State will be the licence holder?
I think there are precedents around the world for part of the model. I’m not sure that anybody else has put it together in one package before, so that may be new. I know that there are salmon farming sites in Norway that are at least as big, or bigger, than the one we are proposing. And certainly in Pacific Canada as well. In terms of the State being the licence holder, I think something similar to that has been done with wind energy by the Crown Estate Commissioner in the UK. I don’t know that’s it’s been done in fish farming but it has been done for other natural resources. So, it’s a kind of an imaginative packaging of good practices from around the world.
What are your expectations re. getting approval (and when) and creating those 350 + 150 = 500 jobs? What’s the timeline?
At the moment, we have to carry out an environmental impact assessment [EIA] on the project according to the EU Directive [NB Ed: 85/337/EEC]. And that requires a scoping exercise – a large public consultation exercise. In advance of that, we held over 60-70 meetings to inform of that process. So we’ve had a very wide engagement.
We hope to submit the application together with the EIA towards the end of January to mid-February 2012. We expect it would take somewhere between 4 and 6 months for the Department and its advisers to examine that, and for them to make a recommendation to the [NB: DAFM] Minister. The Minister can then decide to either grant the licence as we’ve applied for it, to grant it with modifications, or to refuse it. Once he publishes his decision, that’s open to appeal.
There is quite a number of public consultation points along the way… There is public consulation at scoping, public consultation at the point of application, and there is the possibility for appeal at the point of the Minister making his decision. So, assuming the Minister may make his decision by August-September , if there is no appeal: we have a licence there and then, and we can seek to bring in an investor. Or if alternatively there is an appeal, it may take the rest of 2012 to see that through. So we would hope somewhere in the beginning of 2013 to be in a position to bring-in a investor and to get the project kicked off.
[However] we’re not waiting around […] we’re working away with a number of investors at the moment and we’re also developing the legal framework that we could use to run the competition [tender]. Because BIM is a state body, this is going to have transparent and equitable, and we’re going to have to have a means of evaluating tenders from interested developers. That process has to be developed.
Secondly, once we have the licence and can award the franchise to a developer, we want to be able to do that very quickly. So, I guess sometimes in 2013 we will hopefully see the project kick-off and commence.
Given the need to have a lead by way of production of smolts and other logistics, and have all these things organised, nobody is going to come straight into immediate production at 15,000 tonnes. We anticipate that this is going to take 1 or 2, or even 3 cycles before somebody can get right up to that level of production. So it is going to take maybe three years before somebody is able to take all of those smolts to sea, and having the full production the year after. It is going to be an incremental build-up.
What is the nature of the interested investors you mentionned earlier?
What we can say it that we have had expression of interest from the companies one would expect to make expressions of interest… The global salmon farming PLCs have certainly indicated interest in the project. We’ve also had interest from players in other parts of the world. And we’ve had some interests from potential Irish consortia [NB Ed: plural of ‘consortium’, Mr Maguire chooses his words very carefully...].
It IS a big investment. We’re still working on the business projections but we do envisage at the moment that the marine project alone – just the sea farming side of it – is a €40-50 million investment. So, there won’t be all that many players who can take up on it…
We have had an indication from some potential Irish consortia and we’ve also had interests from as far afield as China and from continental Europe.
Would an Irish business consortium have the capacity and experience necessary to be interested in a project of such scale?
Oh yes! We have a number of large agri-food businesses – some of the world’s largest – and if they took a serious enough interest they would have more than enough financial muscle to take up a project like this.
It seems that you have more than one such ‘Deep Sea Fish Farming’ projects lined-up…
We’re definitely doing this one project at the time. It is important to stress that. Having said that, yes: if we achieve success with this project, as we go along, we will certainly be looking at other areas. And we have at least two more areas in mind for the future along the West coast of Ireland.
However, we have to be very careful about what we say. Due to the nature of our licensing laws, we don’t really want somebody else just ‘jumping in there’ rather randomly just in the hope of staking a claim and then looking for financial advantage afterwards.
We have to act in the public interest and do make sure we actually get real development and real jobs coming out of this. So it’s very important that we be careful in to how we proceed.
[… But ] yes, I do anticipate that we would be working on a further application – all things being equal – perhaps at some point in 2012 once we’re clear of the procedure in this particular one. But it’s one project at the time.
Is the technology and know-how ‘right’ in order to carry though such an ambitious project in exposed seas – and any fish escape would be dramatic on the scales envisaged – so, are you confident that the technnology and expertise is ready to realise this Deep Sea Fish Farming project?
Yes we are. We’re being very careful in the evaluation of the location that we’re selecting and we’re making sure that the wave characteristics, and that the site characteristics, are actually no more agressive than those sites that we’ve been operated in Ireland for already quite some time. Making our lead from sites like the Clare Island site and elsewhere… which have been in production for nearly 20 years. Ireland has built-up a lot of expertise in working on these sites. From the perspective of a Norwegian or Scot they are ‘next generation’ sites, but they’re everyday sites for Ireland.
We’re not getting involved with technologies for a – say – ‘third generation’-type site [NB Ed: much further offshore]. These are sites which can be operated with the best of the conventional & heaviest duties technologies available at the moment. But still, they’re not so extreme that they require radical solutions, or radical new operating methods.
Would not the sheer size of the proposed scale of production have ‘reverse economy of scale’/a negative impact when it comes to organic farmed salmon production, i.e that what works with a 1,000 tonne production may not work any more with 15,000t, even if fish densities are maintained and notr exceeded?
We’ve looked at all this very carefully. We’ve put a huge amount of effort first of all to make sure the two locations are far enough apart to have biological security from one to the next. And secondly, that the location of the individual ‘blocks’ within each of the two locations, such that they don’t impact on one another and that the residual flows don’t go from one to the other.
[…] We’re putting a massive amount of detailed scientific work into making sure that the location is very very carefully put together to avoid any of those issues. The work that we’ve done and the information we have on the water flows and water movements has indicated that we won’t have a problem in that regard.
What is the perception regarding this project within the industry – taking into consideration that fact that for years the Irish salmon production capacity has stagnated, and that with this project alone, it would ‘suddenly’ double?
Well, we’ve thought very long and hard about the project. We tried to factor-in in advance as many of those issues as we could. We’ve been among those who have been the most frustrated [NB re. the industry stagnation] because it’s BIM’s job to attempt to achieve development. So we have looked at it, we bided our time, and we’ve learnt our lessons; and now we’re attempting to foresee as many of those issues as possible.
For example, the way we’ve been doing this consultation, the way we’ve been meeting the people, the very wide range of scoping we’ve been doing, the fact that we’ve engaged early with all of the key government agencies and NGOs… we’ve tried to have a very very detailed plan of campaign: we tried to anticipate those areas which would give us difficulties. We’re very hopeful – and we can be no more than hopeful – that we can get a clean run at this.
Now we’re going to encounter sags and there’s going to be unexpected difficulties – of course there are – but we have a lot of ability and capacity to deal with that.
Have you also considered other species than Atlantic salmon, at a later stage?
We have! We are trying to keep in mind a number of things. One perhaps is the possibility of course of cod farming, down the line, we have quite a bit of interest in that. And the second thing is to keep the way open for a degree of multi-trophism. We are trying to think perhaps downstream of shellfish units and maybe even seaweed units which could operate in tandem as well.
We’ll make provisions in the licence application to have it flagged; We’re trying to think as far down the line as we possibly can.
We’re also very lucky we have a Senior Minister who has a great Minister in marine matters: he’s taken a very big personal interest in this issue and that is helping us a lot in driving the project along.
Again, quoting Shakespeare [NB Ed: in the play Julius Caesar] – “There is a tide in the affairs of men. Which taken at the flood, leads on to fortune” – you just have to know when the tide is rising underneath you. At the moment I think we have this rising tide, so the circumstances altogether are making this possible in a way that wouldn’t have made this possible before.
A non-exhaustive selection of relevant articles previously published on SeafoodIntelligence.com:
- Emerging Markets: MARINE HARVEST Ireland applies for new organic salmon site in West Cork; €3.5m investment (12.01.2012).
- Most-Read Stories on SeafoodIntelligence.com: Open Ocean Aquaculture (‘OOA’) / Offshore Aquaculture 2011 (29.12.2011).
- Quotation of the Day: ‘GAME CHANGER’: Irish gov’t initiatives to drive on new large-scale deep water (salmon) aquaculture (28.11.2011).
- Trends & Forecasts: NEW EU strategy for growth in Atlantic Ocean; Offshore aquaculture & marine energy “blue growth” (25.11.2011).
- Farming the Deep Blue: NEW R&D will “allow [aquaculture] industry to move further offshore” – New EC Marine Strategy (25.11.2011).
- Marketing: GREEN IMAGE: Opportunities for Ireland’s organic sector highlighted; Organic farmed salmon… (24.11.2011).
Farming the Deep Blue: “EXPORT fish, not people”: Irish government embarks upon new licensing approach; “Advance fish farm (17.11.2011).
- Marketing: IRISH ORGANIC salmon firm bouncing back after total jellyfish wipe-out; “2010 was a terrific year” (05.11.2011).
- Quotation of the Day: “IRELAND has to overcome regulatory problems before it can capture aquaculture’s true potential” (09.05.2011).
- Politics: IRELAND’s Food Harvest 2020 strategy; Clear momentum now in implementing recommendations (21.01.2011).
- Politics: IRISH MINISTERS meet Marine Harvest CEO over growth plans; End of salmon sector’s “nightmare”? (20.01.2011).
- European Aquaculture: IRISH Minister welcomes EU Commission focus on aquaculture; new EU consultative structure coming? (02.12.2010).
- Politics: IRISH & NORWEGIAN officials meet to discuss mackerel quota issue & salmon farming ‘shared interests’ (25.11.2010).
- Politics: IRISH aquaculture industry criticises “bureaucratic nightmare”; Government points finger to sea lice (06.10.2010).
- Politics: Former US president Bill Clinton names aquaculture as key sector for N. Ireland’s economic recovery (05.10.2010).
- HOT News: “TREMENDOUS INTEREST”: New Irish plant to produce seaweed-derived organic salmon feed – World first (07.04.2010).
- Politics: IRISH (shell)fish farmers’ union presents 10-point-plan for 2,000 new aquaculture jobs; Backlog (27.02.2010).
- Marketing: PROCUREMENT: Irish government launches pilot scheme to promote organic (sea)food; Compass support (17.09.2010).
- Farming the Deep Blue: Defining offshore aquaculture and establishing an appropriate classification system (19.10.2004)
- Farming the Deep Blue: ‘10,000 tonnes could be the norm for offshore fish farms’ – Irish production could grow by 150,000t (19.10.2004).
- Farming the Deep Blue: ‘Norway has a salmon farming potential of 2 million tonnes without going offshore for 20 years’ (12.10.2004).
- Farming the Deep Blue: Call for formation of global body called International Council for Offshore Development (ICOAD) (07.10.2004)
More offshore aquaculture news
Read also: Organic fish farm proposed for Inis Oírr (Irish Times, December 2, 2011).