Gigante Salmon has terminated its contract with CEO Helge E.W. Albertsen after an updated cost estimate revealed it would take an additional NOK 350 million (USD 32.5 million, EUR 30.1 million) to complete its land-based, flow-through Atlantic salmon farm on an island of Rødøy, Norway.
Albertsen was replaced on an interim basis with Kjell Lorentsen, the founder and CEO of Gigante Havbruk, Gigante Salmon’s parent company.
Gigante Salmon had initially budgeted NOK 445 million (USD 51.8 million, EUR 44.2 million) to construct the first phase of its farm with a 3,000-metric-ton annual capacity on Lille Indre Rosøy, but costs have ballooned to approximately NOK 995 million (USD 88.3 million, EUR 81.8 million), it said. The Bodø, Norway-based company made the dual 19 March announcements via the Euronext Exchange, where it is listed. In response, its stock price sunk to a 52-week low of NOK 5.64 (USD 0.52, EUR 0.48) on 19 March, but it recovered to NOK 6.42 (USD 0.60, EUR 0.55) as of 22 March.
“The [cost] figures are still subject to control, quality assurance, and dialogue with the suppliers,” it said. “The cost increase will require new capital to the company. This work has been initiated. The plan is that the cost increase will be covered through a combination of equity and debt financing.”
In February 2024, Gigante Salmon detailed the deaths of 300,000, or roughly half, of its initial smolt release in January. It said the loss was not due to any fault in the design of its farm, but rather due to poor smolt quality and delayed delivery after the company pushed back the start of production from its original release plans by two months from September 2023. Gigante Salmon said it has collaborated with Norwegian aquaculture management authorities to investigate the cause of the mortality and to implement mitigating measures.
“The facility itself is functioning well and as intended. Seawater is being pumped in as planned and the water chemistry is good. The fish are doing well in the longitudinal tanks, which are now operating with a water velocity of about 20 centimeters per second,” Albertsen said on 13 February. “We are gaining valuable experience for future production.”
Gigante Salmon eventually hopes to increase its annual production at the farm to 20,000 MT, and is planning to build a second, 10,724-metric-ton (MT) maximum permitted biomass (MTB) farm at Verholmen, in Norway’s Nordland region.
Gigante said it raised NOK 100 million (USD , EUR ) more than its previously identified need during a fundraising round in October 2023, and it will put that money toward the additional construction costs, which it blamed on a longer-than-expected construction time, including costs for rigging and operation, as well as higher costs for electric power, and changes it’s making to its farm design “to secure fish welfare and accommodate sustainable production.”
