Proximar Seafood remains on track for a first harvest at its Japan facility in Q3 2024, with a successful NOK 165 million (USD 15.7 million, EUR 14.4 million) private placement helping the company weather operational costs.
Proximar operates a salmon recirculating aquaculture system (RAS) in the Shizuoka Prefecture of Japan, with a goal of producing salmon for the domestic market. The company is targeting a production rate of 5,300 metric tons (MT) of head-on gutted (HOG) salmon in its Stage 1 operations, and according to its Q1 2024 financial report, the facility is on track to reach that figure.
The company first stocked eggs into the hatchery in October 2022, and its facility currently has a biomass of 188 MT, with a standing biomass of 111.9 MT at the end of Q1 2024, the company said. The facility is located within driving distance of several major cities in Japan, and Proximar has a sales and distribution agreement in place with Marubeni Corporation when its salmon is ready for sale.
Since stocking the salmon, the company has had strong biology, Proximar Seafood CEO Joachim Nielsen said in a release.
“Proximar is the first producer of Atlantic salmon in Japan – years ahead of the competition. We continue to be on track for our first harvest in September this year, supported by favorable biological conditions, stable water quality, and good fish health,” he said.
Operational activities in the company’s post-smolt growout facility are going as planned, and a second module of the facility will begin operating in Q2, the company said.
The company also successfully raised NOK 165 million through a private placement it announced in December 2023. That placement was executed in early 2024, and in addition to the fundraising, the company also extended the repayment date for its loan from JA Mitsui Leasing (JAML) until December 2025.
The company’s earnings before taxes dropped as its operating expenses increased thanks to its growing operational activity. The company’s operating expenses reached NOK 20.4 million (USD 1.95 million, EUR 1.79 million) in Q1 2024, compared to NOK 8.9 million (USD 850,000, EUR 781,000) in Q1 2023. Overall, the company lost NOK 29.4 million (USD 2.8 million, EUR 2.5 million) in Q1 2024.
The company also said that a tank breach in February that killed 50,000 salmon at the facility has been resolved, and the tank in question was fixed and is now in use again.
With the company’s operations now approaching its first harvest, the next goal is to establish sales, Nielsen said.
“We are ramping up our sales and marketing activities together with Marubeni, as we progress toward the first harvest,” he said. “I’m confident that our strategic partnership with Marubeni provides unmatched access to the Japanese market, strongly supported by a separate division and a dedicated team working with us.”
The company’s core goal of accessing the Japanese market without additional costs from shipping also offers a strong outlook, the company said. High import costs for salmon allow Proximar to be profitable, “even at lower harvest levels,” the company said.
“With current pricing expectations, Proximar expects to be EBIT profitable, even with a production of 2,000 MT HOG,” the company said.
Proximar also said it has secured production staffing for all key positions. The company recently appointed Yasumitsu Himeno as the corporate development director, who subsequently resigned from the board of directors of the company.
“I am very excited to have Himeno join our administration in Proximar. His broad experience from finance in Japan will be an important contribution to our financing strategy and in positioning Proximar for the future,” Nielsen said.
The company said that planning for Stage 2 of its facility will begin once the company starts harvesting its first batch of salmon.
