Cermaq holds back investment plans in Norway after a proposed resource rent tax increment
NORWAY – Cermaq, one of the world’s leading salmon farming companies, is the latest major seafood company to retract its plans of investment in Norway after the government announced its intention to increase tax on the sector.
The Norwegian government is proposing to introduce a new 40% resource rent tax on aquaculture, with effect from 1 January, an addition to the existing tax bill of 22%, which the company says would affect the production of salmon, trout, and rainbow trout.
The company has followed in the footsteps of peers including Mowi and Lerøy Seafood Group, which have also suspended proposed projects. Mowi has hinted it might invest elsewhere instead.
The tax, which would also be imposed on energy firms, could generate proceeds of at least NOK3.65bn (US$344m) a year.
In a statement, the country’s finance ministry said that Energy producers and the aquaculture industry make billions of crowns on the country’s common resources. The government is now proposing that more of the value created should go back to society.
Norway’s proposed seafood tax still has to be approved by the country’s parliament but seafood businesses are reluctant to carry on with previously-announced projects in the meantime.
Cermaq CEO Steven Rafferty said: “There is little doubt the current resource tax proposal will lead to less investment in Norway and more outside of the country. The new regulations if implemented would severely damage the position of Norway as a global leader.”
We will wait for more clear understanding of the announcement of last week and the final proposal for the resource rent tax and associated regulations.”
In a statement released by Cermaq, the company said it does not concur with comments by the Norway Finance Minister that the salmon producers “did not pay for the old licenses”.
Rafferty pointed out that the owner of Cermaq – Mitsubishi Corporation – acquired the company in 2014 from the principal shareholder, the Norwegian Government, at a market price.
He added that Cermaq has invested more than NOK5bn in the two farming regions in Nordland and Finnmark since 2016.
The company planned to invest a similar amount in the coming years, however, considering the new proposals, Rafferty noted that the company has no choice but to pause, this will naturally impact growth and job creation in many coastal municipalities in which we operate.
Cermaq Norway is one of Northern Norway’s largest fish farming companies with 4 freshwater facilities, 43 sea facilities, and 2 processing plants, as well as a viewing center in Hamarøy. It employs 680 people in Nordland and Finnmark counties.
The company’s salmon production sites are located in Steigen, Hamarøy, Bodø, Narvik, and Øksnes municipalities in Nordland, and Loppa, Alta, Hammerfest, and Måsøy municipalities in Finnmark.
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