Major Acquisition Boosts Salmon Industry in Atlantic Canada
Saint John — A significant development has taken place in the Canadian seafood industry, as one of the country's largest seafood companies, Cooke Inc., has entered into a $225-million deal to expand its salmon farming operations in the Atlantic region. This strategic move involves acquiring the salmon farming assets of Mowi Canada East, a subsidiary of Mowi ASA, which is recognized as the world's largest salmon farmer with a substantial 20% share of the global market.
The acquisition, expected to be finalized by the end of the year, encompasses operations in New Brunswick, Prince Edward Island, and Newfoundland and Labrador. These operations include freshwater hatcheries, sea farming sites, and two processing plants. The deal marks a pivotal moment for Cooke Inc., as it aims to strengthen its presence in the Atlantic region and further its commitment to sustainable salmon farming.
CEO Glenn Cooke expressed enthusiasm about the opportunity, stating, "This is an exciting growth opportunity for our Atlantic Canada operations." He also highlighted the company's intention to welcome the 250 employees from Mowi Canada East, emphasizing the importance of collaboration in growing the sector and providing high-quality salmon to customers across the region.
Mowi ASA, the parent company of Mowi Canada East, will take a $140-million writedown related to the sale of these assets. This decision comes amid challenges faced by the company, including several instances of salmon die-offs last year that significantly impacted their operations.
In July, an "abnormal mortality event" led to over 10% of the Atlantic salmon dying at a site near Rencontre East on Newfoundland’s south coast. In September, another incident resulted in 23% of the fish dying at three more sites due to cold temperatures and low-oxygen water. Additionally, in the fall, 475,000 more salmon deaths were reported due to sea lice, caused by high temperatures and insufficient rain and wind to drive ocean currents.
These events have had a financial impact on Mowi ASA, with a loss of 39.8 million euros before interest and taxes on its Canadian salmon last year, compared to a profit of 3.4 million euros in 2024. Production from its eastern operations is expected to decrease from 17,000 tonnes to 12,000 tonnes this year.
Mowi ASA stated that the sale of the assets is part of its strategy to improve its farming portfolio and focus on core geographies. The company has not provided further comments on the matter.
Sister company Mowi Canada West has also encountered difficulties, particularly with the federal government's decision to phase out traditional ocean-based salmon farming in favor of land-based operations by 2029 on the British Columbian coast. As a result, Mowi Canada West faces uncertain future prospects.
Cooke Inc. plans to continue investing in rural communities across the Atlantic region. Glenn Cooke emphasized the company's immediate goals of stabilizing and reinvesting in the operations through synergies with existing farming operations in the area.
While Ottawa has not considered a phase-out of ocean farming on the Atlantic coast, the aquaculture industry has faced various controversies. Environmentalists often view open net farming as riskier than land-based methods due to the potential for contamination from waste, disease, and fish escapes.
A 2018 report by Julie Gelfand, then federal environment commissioner within the auditor general's office, warned about the risks farmed fish pose to wild salmon. The report highlighted concerns regarding the lack of research on pesticides and the risk of salmon escapes leading to genetic defects in wild populations.
Founded in 1985 by Gifford Cooke and his sons, Michael and Glenn, Cooke Inc. has grown significantly through over 100 acquisitions. Its largest deal came in 2022 when it acquired Australian seafood producer Tassal Group Ltd. for $1.5 billion. That same year, Glenn Cooke became an investor in Ganong Bros., Ltd., Canada's oldest candy and chocolate company based in St. Stephen, N.B.
Cooke Inc. now positions itself as the largest private family-owned seafood firm globally, employing 15,000 staff across 16 countries.
No comments:
Post a Comment