Strong growth in the world's seafood market gives Pan Fish continued growth potential.

From 1995 to 2000 Pan Fish ASA has increased its sales 35-40 times over. This growth is closely related to the continuing strong growth in the global market for fresh seafood over the last 20 years. The global increase in the demand for fresh seafood in particular show no sign of slackening off. This development is well documented and is based on this century's rising per capita consumption and rapidly rising world population. The prices in this market will probably remain high as a result of the standstill (and possible reduction) in the growth of the supply of wild seafood from the world’s oceans, and the lack of input factors in the production of farmed fish.

To remain a long-term player in the production of fresh, farmed fish, Pan Fish ASA has found it necessary to provide the market with other species of fish than salmon. Pan Fish ASA plans to produce these species through the company Pan Marine ASA. This company will have a growth potential corresponding to the growth shown by Pan Fish ASA in recent years, i.e. more than doubling every year for many years to come. The company will be a fully integrated aquaculture company for other species than salmon, with full farming activities from the production of fry, to processing and sales in all parts of the world, on the Pan Fish ASA model.

Pan Fish ASA and Pan Marine ASA will have a great need for access to input factors in production, and we must plan and secure these now. From our many years of experience, we know which of these factors in production, logistics, processing and sales may be scarcer in terms of availability in the future. Pan Fish must act now to secure the freedom of action that it will not be able to secure at a later stage.

In this context, access to quality feed is in a class of its own. Salmon, and also other species of farmed fish and shrimp, are currently being fed almost exclusively on marine diets, i.e. based on fishmeal and fish oil. This diet is almost identical in nutritional terms to the one used by salmon in the wild state. Sometime during the nineties, when the price of fishmeal and fish oil was very high, the fish-farming industry was offered feeds with a high component of vegetable raw materials. Pan Fish had very bad experience with these feeds. Lack of growth, a lot of disease and poor product quality led to increased costs and poor profitability. Pan Fish considers that if the fish-farming industry is again to use a higher content of vegetable proteins, it will be a result of a great increase in the prices of fishmeal and fish oil.

At the moment, most of the global supply of fish oil comes from one country - Peru. Fishing has been good after the last El Niño in 1998. In other areas of production, the availability of oil-rich raw materials has stagnated or is receding. At the moment the stocks of fish oil are very low in relation to the consumption of fish oils.

Partly in order to hedge the price of feed for salmon and other farmed fish in the Pan Fish system, Pan Fish has entered the pelagic sector of the fisheries industry. The only way to establish a price hedge is to buy into production licences in the pelagic fishing industry. As in the fish-farming industry, the prices of fishing licences is increasing in step with the utilisation of the total number of licenses and the prices of the products produced by the fleet (raw materials for the meal industry and the consumption sector). It is many years since any new licences of significance have been granted for seine fishing and pelagic trawling anywhere in the world.

Pan Fish’s investment in meal and oil is based on the need for physical access to the raw materials for feed production, and the opportunity it affords for long-term planning vis-à-vis the market as well as product traceability.

Last but not least, Pan Fish views the pelagic sector of the fisheries industry as a very interesting area in which to invest, both with a view to increasing its product range in interesting markets such as Japan and eastern Europe, and as a large, promising raw material area for new products, partly in the biotechnology industry