Iceland salmon farmer puts investment on hold

As Fish Farming Expert's Norwegian sister site, Kyst.no has previously reported, Mowi subsidiary Arctic Fish harvested 5,595 tonnes in the second quarter, compared to 2,020 tonnes in the same period last year.

Revenue increased from €12.6 million to €32.5m, and its operating loss reduced from €-4.4m to €-3.1m.

Chief executive Daniel Jakobsson also highlights the company's development over several years. Production has increased from around 5,000 tonnes in 2023 to 10,000 tonnes in 2024 and 14,000 tonnes in 2025.

In the first half of the year, the company harvested 11,624 tonnes. The expectation of a total harvesting volume of 18,000 tonnes in 2026 remains unchanged.

"We are very satisfied with the development in production in recent years. This shows that we are on the right track operationally. The negative operational result is disappointing, but is primarily due to the low market prices during the period," Jakobsson told Kyst.no.

Sending more salmon by plane

Arctic Fish has also worked to develop sales in several markets.

"Increasingly larger volumes are being shipped by air to markets with higher willingness to pay in Asia and the United States. We believe this strengthens our position compared to the market in general," said Jakobsson.

The company's current production capacity still has room for larger volumes, allowing production to be increased without extensive expansion in the short term.

“Higher production should continue to lower costs through economies of scale. In addition, we are continuously working on more efficient operations and other cost savings,” explained Jakobsson.

The operating result per kilogram was €-0.56 in Q2. In the same period last year it was €-2.19.

Wants clarifications

The opportunity to grow within the current system does not change Arctic Fish's decision to withhold new investment capital in Iceland.

"We have shown that we can and will invest and grow in Iceland. But further investments must be economically justifiable. With the current framework, we cannot justify spending more capital," said Jakobsson.

He points in particular to the fees associated with sea-based food fish production.

“The current level of industry-specific taxes and fees in Iceland is simply too high. Per kilo, we estimate that these costs are at least three to four times higher than comparable fees in Norway,” he said.

The Icelandic farming fee, for example, is set at 41.66 Icelandic kroner per kilogram of harvested salmon in 2026. At today's exchange rate, this corresponds to around 3.20 Norwegian kroner, or £0.25.

The Norwegian production tax on farmed fish, by comparison, is NOK 0.985 (£0.078) per kilo. That Icelandic tax alone is therefore around 3.2 times as high per kilo.

Need security for investors

The regulatory framework conditions are among the most important issues for the long-term profitability of both Arctic Fish and the Icelandic aquaculture industry, said Jakobsson.

This spring, the Icelandic government presented a proposal for a new aquaculture law that will combine the regulation of aquaculture in the sea, on land and at sea into one law.

The proposal was distributed on March 16 and considered for the first time in the Althing on March 23. It was then sent to the Industry and Trade Committee for a second reading, but the legislative work has not yet been finalised.

The proposal includes, among other things, a new model for production limits, biosecurity areas and more systematic monitoring of rivers and lakes. An overall framework for land-based and offshore aquaculture is also part of the legislative work.

"The current framework is not sustainable for an industry that must invest significant capital over a long period of time, and that is running at a loss," stated Jakobsson.

Criticism of the framework conditions does not change the assessment of production opportunities in Iceland. The aquaculture industry has gone from very small production to an expected total volume of more than 60,000 tonnes this year in just a few years.

"Iceland has shown that the country has very good conditions for salmon farming. The biological and operational potential is clear. What is needed now is competitive and predictable framework conditions that give investors the security to continue investing. Until this is clarified, Arctic Fish has stopped tying up new investment capital in Iceland," said Jakobsson.

The investment pause will also have direct consequences for the company's smolt facility in Nordurbotn.