Mowi ASA has entered into a strategic feed partnership with Skretting/Nutreco, combining advanced feed formulations and in-house production to improve salmon farming performance, strengthen cost efficiency and enhance long-term competitiveness across its European operations.
Mowi ASA, one of the world’s leading seafood companies, has announced that it has entered into a strategic and industrial partnership agreement with Skretting, the aquaculture feed business line of Nutreco Group. Under the agreement, Mowi will produce feed based on Skretting’s feed formulations, making Mowi an even better salmon farming company.
The partnership builds on Mowi and Skretting’s long-standing commercial relationship, with Skretting making available its proprietary know-how, R&D capacity, data and procurement capabilities. According to the statement, Mowi Feed will continue to produce feed, and feed production will now be based on Skretting’s feed formulation. The strategic partnership is expected to deliver more than NOK 650 million (EUR 55 million) in annualised net cost savings through improvements in feed formulation and recipes, procurement and logistics.
“Mowi and Skretting are a great match for each other, and the partnership with Skretting is our preferred outcome from the strategic review process. I am confident that teaming up with them will make Mowi into an even better salmon farming company. With this agreement, Mowi Farming secures the best performing feed in the coming years at the lowest cost in the industry. The partnership will deliver improved feed formulation and recipes for our European salmon farming operations which will drive significant cost improvements whilst ensuring top quality feed performance in the years to come,” says Ivan Vindheim, Mowi CEO.
MAKING MOWI INTO AN EVEN BETTER SALMON FARMING COMPANY
Mowi notes that Skretting has been one of its feed suppliers for decades, known for delivering high quality salmon feed at a competitive cost. As feed formulation has become increasingly complex in recent years, nutritional know-how and an R&D focus within feed have become even more important. The company states that teaming up with a partner that is at the forefront of driving feed innovations and offers these specialised competencies has been of key strategic importance to Mowi in the review process, and Mowi will pay a small annual consideration for this.
“We know the Skretting team extremely well and have enjoyed an excellent working relationship with them for decades. Now we are taking this cooperation to another level and formalising how we can drive innovations and cost improvements. This partnership model presents a low-risk solution for Mowi while ensuring cost savings from day one on improved feed formulation and optimised procurement and logistics,” Vindheim expresses.
A key advantage of keeping Mowi Feed as-is with the company’s organisation and the two state-of-the-art feed factories in Norway and Scotland, is that Mowi will retain the embedded profit in the feed value chain. There is reason to believe that the feed market will continue to tighten in the coming years which will make this part of the value chain even more profitable.
“The partnership model whereby Mowi Feed is retained gives us the best of both worlds; teaming up with Skretting with all the benefits that it entails and at the same time retaining Mowi Feed with an improved market outlook make this the most compelling solution,” Vindheim adds.
