Land-based salmon still not investor-ready

April 4, 2016
Aquaculture North America , by Brad Hicks April 4, 2016

The Salmon Aquaculture Innovation Fund at Tides Canada recently released its final report on the ‘Namgis First Nation’s land-based Atlantic salmon project on northern Vancouver Island in British Columbia.

A detailed analysis of the Tides’ report on the heavily subsidized “Kuterra” project confirms that at this time there is currently no sound business case to be made for rearing market-size Atlantic salmon on land.

 However, before launching into an analysis of the Kuterra project it is important to acknowledge the hard work and commitment demonstrated by the employees and managers of Kuterra and the ‘Namgis First Nation.  It is clear from the Tides’ reports that they have made an incredible effort getting to this stage and this article is not intended as a criticism of their efforts. 

Land-based proponents

Some environmental groups, government agencies and First Nations continue to insist that land-based operations, like Kuterra, are economically viable and a successful alternative to net pens for commercial Atlantic salmon production.  While Kuterra should be congratulated on their efforts with the project, their experiences to this point clearly demonstrate that they have been unable to achieve economic viability and therefore are unable to support a case that inspires investment on a scale needed to rear market-size Atlantic salmon in this type of system. Indeed, one of the strongest proponents for this venture, Dr Andrew Wright, commented at a workshop on rearing salmon on land in Virginia last fall that this system was not yet investor-ready.

Kuterra funding

 The project was funded primarily by Government of Canada grants and a large charitable donation by Tides Canada, using funds provided primarily from the US-based Gordon and Betty Moore Foundation. The remainder was a combination of contributed or borrowed capital by the ‘Namgis First Nation.  Of the total project funding, $9 million was construction capital and $3.5 million were operational start-up funds.


The accompanying chart shows how the $9 million in construction costs were allocated.

The facility was constructed on forested land owned by the ‘Namgis First Nation and although costs associated with tree removal, levelling the construction area, drilling wells etc, are reflected in the costs, purchase of the land is not.

System Goal

The system was designed to produce 400 metric tons of harvested product per year (measured as whole fish, guts-removed, head-on) which equates to $22,630/metric tonne of production based on capital costs. This is approximately seven times more expensive than a comparable net pen facility.  To date, this project  is achieving a level of production equivalent to ~250 metic tonnes/year.  If this level of production cannot be increased, capital costs would be roughly 12 times higher than the norm in the net pen industry.

Operational results

The report covers four production groups which have been harvested and another three groups growing in the system. Details are shown below:

Read the full article here: