The 2025 Business Strategy - Scaling globally through growth and value chain innovation
Our 2025 strategy comprises three key strategic objectives for the continued growth and business development. Increasingly sustainable farming practices is the very foundation of all areas of the strategy.
We aim for an annual harvest of 130 000 tonnes by 2025 (excluding Shetland). We will focus on post-smolt investments, target new licenses and seize opportunities within new technology. In some regions, there is also potential for continued improvement of site utilization. We participate in new growth initiatives, M&As, joint ventures, and greenfield projects, and seek cooperation with farmers in existing areas.
Grieg Seafood targets cost improvements in each region. To improve operational performance, we will maintain a rigorous focus on fish health and welfare. We will also drive performance improvements through continuous research and development, and the utilization of new technologies. With the estimated low market prices going forward, cost focus is essential.
Value chain repositioning
We aim to increase the value of our products by becoming an innovation partner for our customers. This will be achieved through a stronger presence in the market, based on partnerships, category development and brand cultivation. To optimize upstream activities with local customer demand, and fully integrate sales and marketing with our farming operations, we are establishing our own global sales organization. The current Ocean Quality partnership with Bremnes Fryseri will cease at year end 2020. A fully integrated organization is also expected to contribute to cost saving.
The establishment of the Newfoundland region
With the acquisition of Grieg Newfoundland AS, we took an important step towards realization of the 2025 objectives. The investment has a long-term harvest potential of 30-45 000 tonnes Atlantic salmon and includes long-term exclusive farming rights in Placentia Bay, a farmable area larger than the Faroe Islands. With proximity to the US East Coast, the acquisition reinforces our US market exposure and underpins the 2025 strategy to strengthen our position as a global leader in sustainable salmon farming.
Short to mid-term measures amid covid-19
As the long-term ambitions remains, focus areas in the short to mid-term will be to improve profitability, streamline businesses and secure financial capacity. The pace of investment of some growth initiatives are slowed-down or postponed.
Measures under these priorities include continued focus on cost improving initiatives, improved fish health and welfare and smolt infrastructure developments. We are evaluating disposal of the Shetland operations, and alternative models for funding of smolt infrastructure expansion are being considered.
As allocation of capital to growth initiatives will be reduced short- to mid-term, growth will mainly be driven by improved utilization of current operations, in addition to the new greenfield project in Newfoundland.