NZ King Salmon says too soon to tell if new govt will hit farm relocations

Tuesday 7th November 2017

New Zealand King Salmon Investments, the world's largest aquaculture producer of king salmon, doesn't expect to spend any more on the consultation process involving the possible relocation of six farms but says it's too early to tell whether a new government will affect the process.

The Minister for Primary Industries began a consultation in January to relocate up to six of the company's salmon farms from their historic locations to higher water flow sites more suitable for fish and the environment. A public process was carried out in May. So far King Salmon has spent $1.2 million and managing director Grant Rosewarne told shareholders at today's annual meeting in Blenheim that "we do not anticipate further material spend to complete the project."

However, "at this early stage, it is not possible to say what effect, if any, the change of government has had on the MPI process," he said in speech notes published on the NZX. The new government signalled it will split the Ministry for Primary Industries, naming Damien O'Connor as Agriculture Minister, Stuart Nash as Fisheries Minister, and Shane Jones as Forestry Minister.

King Salmon's Rosewarne reiterated that if some or all of the farms are relocated, the first harvest from those farms would be unlikely to come before the 2020 financial year.

"The higher flow sites should permit an overall increase in the volume of salmon harvested in addition to improved environmental outcomes," and each site would require some $6 million – or a maximum total expenditure of $36 million if all proposed relocations are approved. "We are confident that increased volumes readily justify the associated investment," he said.

If none of the farms are relocated and the company can't renew one of the sea farm consents, Rosewarne said total production might be lowered by 700-750 tonnes, adding "we note that we have successfully renewed all consents in the past."

The shares rose 4.8 percent at $2.40 and are up 80 percent this year.

(BusinessDesk)

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