Marine Harvest is to build a $121 million feed factory in Scotland, following the success of its first factory in Bjugn, Norway, which opened during 2014 and now supplies 80% of its Norwegian feed requirements.

Feed purchases remain a significant part of the cost of producing salmon in Marine Harvest operations in Scotland, Ireland and the Faroe Islands, which are 100% supplied by external feed companies. In line with its strategy of becoming a fully integrated protein company, Marine Harvest has now made the decision to expand its feed operations.

Scotland was chosen as the best location, due to its ability to fully serve the needs of operations in Scotland, Ireland and the Faroe Islands. The range of feed types will also be broadened to include starter feed for freshwater and organic feed for the Irish operations.

The Board of Directors approved the development, and anticipates the investment will yield good results, with a capital return target in the range of 15%.

The factory is expected to have a total capacity of around 170,000 tonnes of feed, with the potential for further expansion. The investment is subject to acquiring land, obtaining relevant permissions and consents. The construction phase is planned to commence in 2017 and expected completion of the feed plant during the first half of 2018. All existing external feed supply contracts in Scotland, Ireland and the Faroe Island expire during the first half of 2018.

Existing management within Marine Harvest Fish Feed will provide support to the build-up of the new operational management.